The removal of GmbH managing directors sometimes encounters difficulties when some shareholders resist it. However, shareholders can compel the removal of managing directors who have become untenable by legal action if the managing director in question has provided good cause, particularly in cases of gross breach of duty or incapacity for proper management6. If the managing director to be removed is not also a shareholder, shareholders can sue the other shareholders for their consent to the removal.
In a recent case decided by the Supreme Court, the claim for removal against a shareholder-managing director with a 50% capital stake was upheld. The good cause consisted of the managing director in question suddenly disputing the conclusion of a contract extension for a very important contractual relationship for the GmbH – contrary to his own previous stance during the contract extension. He even had the invalidity of the contract extension asserted by a lawyer's letter to the GmbH's contractual partner, thereby endangering the important business relationship between the GmbH and its partner. The Supreme Court considered this a gross breach of duty and good cause for removal.
The dismissed managing director's retaliation was swift: The managing director who had been sued for removal, in turn, sued the other shareholder-managing director for removal. He sought to establish good cause for the latter's removal by arguing that the other shareholder-managing director had grossly breached his duties by paying attorney fees from the company's funds for a previous shareholder dispute – even though the shareholders had consensually agreed that the GmbH would bear these costs. However, this claim was unsuccessful: While the Supreme Court affirmed that the payment of the shareholders' legal fees by the GmbH violated the prohibition against the return of contributions, since the payment at the expense of the GmbH consensually had been agreed upon by the shareholders, this did not constitute a "gross" breach of duty and therefore did not justify the removal of the other managing director.
OGH 18.3.2026, 6 Ob 191/25v
1 Section 16 (2) GmbHG.
