Early warning guide
Early warning duty under StaRUG § 1.
StaRUG § 1 requires managing directors and board members to monitor going-concern risks continuously and act without delay when a risk is identified. This duty applies whether or not a formal procedure is started. A Chief Restructuring Officer can be brought in at this early stage to take over liquidity planning and coordinate the first measures. Whether a specific situation triggers the duty is a question a lawyer answers for the individual case.
Who StaRUG § 1 applies to
Managing directors and board members
The duty falls on the management of legal entities, for example GmbH managing directors and AG board members. The law sets no size threshold.
The timing: before actual insolvency
StaRUG applies when insolvency is threatened but has not yet occurred. That aligns with the forecast horizon of InsO § 18: roughly 24 months. Acting only when cash has run out means many options are already gone.
Even without a visible crisis
The law requires ongoing monitoring. Early warning signals can appear in numbers that look unremarkable at first glance.
A duty to act
Once a going-concern risk is identified, management must act immediately. The obligation does not require the full insolvency filing conditions of InsO § 15a to be met. A lawyer assesses what the specific facts require.
What to do in practice
- 01 · Ongoing
Check early warning signals regularly
Typical signals: sustained revenue decline over several quarters, falling gross margins, growing debtor days, rising overdraft use or the loss of a major customer. No single signal is proof, but several together call for a proper assessment.
- 02 · First signals
Set up a 13-week cash flow forecast
Once a signal appears, a short-term liquidity forecast is the first practical tool. It shows whether and when payment capacity is at risk, and gives banks and advisers a solid base to work from.
- 03 · Early
Bring in advisers early
A lawyer clarifies which duties the specific situation triggers. A restructuring adviser or Chief Restructuring Officer takes over the operational planning. The earlier both are involved, the more options remain open.
Sources and context
- StaRUG § 1 (Act on the Stabilisation and Restructuring Framework for Businesses, in force since 1 January 2021): duty of continuous monitoring and immediate action
- Corporate insolvencies in Germany 2025: 24,064, highest since 2014, +10.3% on 2024 (Destatis, press release March 2026)
- All statements on legal duties in this guide are general information. Legal advice under the German Legal Services Act (RDG) is provided only by licensed lawyers.
Frequently asked questions
What counts as a going-concern risk under StaRUG?
The law gives no exhaustive list. In practice: sustained revenue decline, loss of key customers or suppliers, rising debt without a visible way out, and threatened covenant breaches with lenders are all relevant. Whether a specific development meets the legal threshold is a question for a lawyer.
What are the consequences of breaching the early warning duty?
StaRUG sets no separate fine for § 1. Whether and how a breach matters under general director liability depends on the individual case. Legal assessment of the individual case belongs with a lawyer.
Does StaRUG § 1 apply only if a formal StaRUG procedure is opened?
No. The early warning duty applies independently of any formal procedure. It is a standing duty of management.
When does a Chief Restructuring Officer make sense at this stage?
When the signals are present but no open crisis has developed, a Chief Restructuring Officer alongside management is one option. The CRO takes over liquidity planning and coordinates advisers, freeing management to keep running the business.
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Last updated: 01/11/2026