Non-compete clause for shareholders of a GmbH

The individual shareholder has in particular a duty of noncompetition and a duty of loyalty towards the GmbH and all its shareholders. A non-competition clause may also be imposed on a shareholder of a limited liability company by analogy with Section 112 of the German Commercial Code (HGB), based on the duty of loyalty as a member’s duty to refrain from competition. This applies in particular if the non-competition clause is either contractually agreed or the shareholder in question exercises or can exercise a special influence on the company, for example as a managing partner, because the GmbH is structured in an emphatically personalised manner.

The non-competition clause is breached if the shareholder in question has a majority shareholding in another competing company or otherwise controls it, although a mere minority shareholding in a competing company is generally not detrimental.

It should be noted that non-competition clauses in the articles of association of a GmbH may violate the Act against Unfair Restraints of Competition. If this is the case, it should be assessed by a specialised lawyer. In particular, it must be examined whether a non-competition clause is also necessary and permissible vis-à-vis a minority shareholder in order to maintain the company’s ability to function and to protect it from being undermined or destroyed from within by the shareholder.

If there is a non-competition clause, its restriction or even its abolition requires an inclusion in the articles of association, in case of doubt a three-quarters majority of the votes by way of an amendment to the articles of association, provided that the measure is not contrary to the interests of the company.