Director under the articles of association

A director under the articles of association occupies a special position in employment law. There is no actual authority relationship, and the legal ties are twofold: ties based on employment law for the director as an employee and ties based on corporate law as a member of the Board of Directors of the organisation. Unlike a nominal director, a director under the articles of association is appointed to his position by the General Meeting of Shareholders or the Board of Supervisory Directors. This process must have been preceded by a process of appointment, preferably with a written decision confirming the appointment, and the director under the articles of association must be registered with the Chamber of Trade and Industry.

A director under the articles of association enjoys a limited degree of protection from dismissal. In accordance with the provisions in the articles of association, the director under the articles of association can only be suspended or dismissed by the body authorised to make his appointment (the General Meeting of Shareholders or the Board of Supervisory Directors). On the basis of case law, in principle, a director under the articles of association is legally dismissed (according to corporate law) upon termination of the contract of employment, except in the case of a statutory ban on termination or agreements to the contrary, reached between the parties.

The attorneys-at-law in the Employment Law practice group have all the knowledge and experience needed to offer you the necessary support in such a process of dismissal or appointment.

Fiscal issues that may also arise in this connection include international remuneration structures, the use of split payroll systems, secondment within international groups, net guarantee contracts and the allocation of management and head offices costs within groups (of companies), all of these issues may or may not be implemented within necessary (international) contracts.