Sole management authority
Sole management authority is a term from company law and means that each partner can act alone for the company.
According to German law, however, it should be noted that a distinction is made between management and representation or between management authority and power of representation . The management authority states that a managing director is entitled to carry out a business in the internal relationship with the company, i.e. vis-à-vis the other shareholders. The power of representation, on the other hand, is the right to effectively represent the company externally, so that third parties are established towards the company's liabilities. Management authority and power of representation usually coincide, but it is also conceivable that different regulations have been made for this.
For different types of companies, the law sets different regulations on management authority and power of representation. There is also the option of stipulating regulations that deviate from the law in the articles of association.
In the case of a company under civil law (also known as "BGB-Gesellschaft" for short or "GbR" for short), according to the law, the shareholders are jointly entitled to manage the company; The consent of all shareholders is required for every transaction (Section 709 (1) BGB ). Section 714 of the German Civil Code (BGB) regulates the power of representation as well as the management authority, i.e. all shareholders represent jointly. Different regulations in the articles of association are possible.
At the open trading company (OHG), § 115 HGB regulates the management. If the management is entitled to all or several shareholders, each of them is entitled to act alone (sole management authority). However, if another managing partner objects to the performance of an action, this must be omitted. Each shareholder is (solely) authorized to represent the company if he is not excluded from representation by the articles of association (Section 125 (1) HGB). Different regulations in the articles of association are possible.
For the limited partnership (KG), the regulations for the OHG apply accordingly, but limited partners are excluded from management and representation (Sections 164, 170 HGB).
In the case of a company with limited liability (GmbH), the management authority of the managing director can be restricted internally (Section 37 GmbHG ). The external power of representation of the managing directors cannot be restricted. If there are several managing directors, they represent jointly, unless otherwise specified in the articles of association (Section 35 (1) and (2) GmbHG).
In the case of trading companies (OHG, KG, GmbH), rules of power of representation that deviate from the law must be entered in the commercial register.
