What does a change of managing director mean for the LLC?
A change of managing director at the LLC means that a previous managing director steps down from the corporate body function and a new person is appointed, or that the authority to represent the company changes.
In the case of the LLC, it is important to distinguish between three levels. First, there is the corporate organ status as managing director. Second, there is the authority of representation, i.e., who may legally represent the LLC to the outside world. Thirdly, there may additionally be an employment or mandate relationship, which must be assessed separately.
The LLC is legally strongly oriented towards its shareholders. The supreme governing body is the shareholders' meeting, and it is responsible, among other things, for the appointment and dismissal of managing directors (Art. 804 Abs. 1 OR, Art. 804 Abs. 2 Ziff. 2 OR). The Federal Supreme Court states that the shareholders' meeting of the LLC has important non-transferable powers through which the shareholders can influence the management (BGE 145 V 200 E. 4.5.1). In addition, the Federal Supreme Court describes the LLC as a corporate entity structured on a personal basis with close personal proximity between shareholders and the company (BGE 145 V 200 E. 4.5.2).
Who manages the business of an LLC?
In principle, all shareholders manage the business of the LLC jointly. However, the articles of association may provide for a different arrangement (Art. 809 Abs. 1 OR).
This is central to any change of managing director at the LLC. Many LLCs use articles of association that provide for certain individuals to be elected as managing directors. In this case, the change is usually made by a resolution of the shareholders' meeting. If there is no alternative statutory provision, statutory self-management applies by default. All shareholders are managing directors. In such a model, an individual shareholder cannot simply be "voted out" like an external managing director. In that case, a statutory revision or another corporate law solution is generally required (Art. 809 Abs. 1 OR).
Only natural persons are eligible to act as managing directors. If a legal entity or a commercial partnership has a shareholding in the LLC, it must, if necessary, designate a natural person to exercise the function (Art. 809 Abs. 2 OR). If the LLC has several managing directors, the chairpersons' role must also be regulated (Art. 809 Abs. 3 OR).
How is a managing director dismissed or newly appointed?
The shareholders' meeting may dismiss managing directors whom it has elected at any time (Art. 815 Abs. 1 OR). In principle, a good cause is not required for this. This is practically important because the corporate organ status can be changed flexibly.
The situation is different if the power of management does not rest on an election by the shareholders' meeting, but follows directly from the law or the articles of association. In that case, a simple dismissal resolution may not be sufficient. The articles of association must first be verified. It is precisely here that many mistakes happen in practice: the company registers a staff change even though the articles of association do not support the desired setup at all.
A managing director can also lose their function if a court deprives or restricts their management and representation authority at the request of a shareholder. This requires a good cause, such as a gross breach of duty or the loss of the ability to manage the business properly (Art. 815 Abs. 2 OR).
Furthermore, it is important to note that dismissal as managing director does not automatically terminate any employment contract, mandate agreement, or fee arrangement. The law explicitly reserves claims for compensation (Art. 815 Abs. 5 OR).
Does the change of managing director have to be registered in the commercial register?
Yes. If a fact is registered in the commercial register, any change to this fact must also be registered (Art. 933 Abs. 1 OR). In the case of the LLC, the managing directors and the persons authorized to represent the company are part of the content of the commercial register entry (Art. 73 Abs. 1 lit. p HRegV, Art. 73 Abs. 1 lit. q HRegV).
The application must clearly identify the legal entity and state the facts to be registered or refer to the supporting documents (Art. 16 Abs. 1 HRegV). It can be submitted on paper or electronically (Art. 16 Abs. 2 HRegV).
In principle, the application is made by one or more persons authorized to sign in accordance with their signing authority or by an authorized third party (Art. 17 Abs. 1 HRegV). A departing person also has the right to register the deletion of their own entry (Art. 933 Abs. 2 OR, Art. 17 Abs. 2 lit. a HRegV). This is particularly relevant if the company delays the deletion.
However, the commercial register entry is not in every respect the moment when everything first becomes effective internally. According to case law, the dismissal can be effective in internal relations even before the register entry (BGE 111 II 480 E. 1b). Nevertheless, the change should be registered quickly because the register entry creates clarity for the outside world and incorrect entries can lead to misunderstandings.
What documents are required for a change of managing director?
The exact requirements may be handled slightly differently depending on the canton and the specific constellation. Typically, however, a commercial register application, the resolution of the shareholders' meeting or a corresponding extract from the minutes, a declaration of acceptance by the newly elected person, if applicable a declaration of resignation by the departing person, and a notarized signature sample if the new person receives signing authority, are required.
The supporting documents must be submitted in the original or as a certified copy, on paper or electronically (Art. 20 Abs. 1 HRegV). They must be signed in accordance with the law (Art. 20 Abs. 2 HRegV).
If an authorized signatory is registered for entry, they must deposit their handwritten signature with the commercial registry office. This can be done by signing at the commercial registry office, by a certified signature, or, under the statutory conditions, electronically (Art. 21 Abs. 1 HRegV, Art. 21 Abs. 3 HRegV).
In practice, it is worth taking a look at the articles of association before registering. They often state whether managing directors are elected by the shareholders' meeting, how signing authority is structured, and whether a chair of the management is provided for.
What applies to signing authority and representation?
By law, every managing director is authorized to represent the LLC, unless the articles of association provide otherwise (Art. 814 Abs. 1 OR, Art. 814 Abs. 2 OR). The articles of association can, for example, provide for individual signing authority or joint signing authority of two. However, at least one managing director must be authorized to represent the company (Art. 814 Abs. 2 OR).
Restrictions on representation authority often have greater impact internally than externally. Vis-à-vis third parties acting in good faith, the LLC cannot easily rely on internal restrictions of authority. The situation is different in the case of registerable restrictions such as joint signature or a restriction to a branch office (Art. 814 Abs. 4 OR).
When changing managing directors at the LLC, you should therefore always check whether only the corporate organ status or also the signing authority should be changed. It makes a big difference whether someone remains a managing director but no longer has signing authority, or whether the person leaves the management entirely.
Does the LLC need a person residing in Switzerland?
Yes. The LLC must be capable of being represented by a person residing in Switzerland. This person must be a managing director or director and have access to the share register and the register of beneficial owners (Art. 814 Abs. 3 OR).
This means: If the only authorized representative residing in Switzerland steps down, a replacement must be organized in good time. Otherwise, the LLC can no longer fulfill its legal representation requirement. Especially for international founding teams or holding companies with foreign shareholders, this point is particularly important during a change of managing director.
What mistakes often happen in practice?
A common mistake is that the company does not check the articles of association. Depending on the statutory order, a managing director cannot simply be replaced with a standard resolution.
Another mistake is mixing corporate organ status with the employment contract. Anyone who is dismissed as a managing director is no longer a corporate organ under company law. However, an employment contract, claim to a fee, or mandate may continue to exist separately or may need to be terminated separately (Art. 815 Abs. 5 OR). Conversely, a continuing commercial register entry alone does not automatically justify a claim to a fee if the person was actually no longer able to influence the business operations (BGE 111 II 480 E. 2a).
An incomplete commercial register application is also delicate. If minutes, declaration of acceptance, resignation letter, or certified signature are missing, registration is delayed. If you need support with the topic of changes, Jurata will be happy to assist you at any time: Handelsregistermutation.
Conclusion: Plan a change of managing director at the LLC carefully
A change of managing director at the LLC is more than just a form for the commercial register. The key factors are the articles of association, the correct resolution, the proper registration, and a neat arrangement of signing authority.
Particularly important is the distinction between corporate organ status, representation rights, and contractual relationships. Corporate organ status can be ended under company law, while an employment or mandate relationship must be handled separately. At the same time, the commercial register entry must be updated quickly so that it is clear to the outside world who may manage and represent the LLC.
Frequently asked questions about changing managing directors at the LLC
Can a managing director of an LLC be dismissed at any time?
A managing director elected by the shareholders' meeting can, in principle, be dismissed at any time (Art. 815 Abs. 1 OR). However, whether a simple resolution is sufficient depends on the articles of association and the specific management regulations.
Does the departing managing director have to sign themselves?
Not always. In principle, registration is completed by persons with signing authority or an authorized third party (Art. 17 Abs. 1 HRegV). However, a departing person can also register the deletion of their own entry themselves (Art. 933 Abs. 2 OR, Art. 17 Abs. 2 lit. a HRegV).
Is an LLC allowed to have only managing directors abroad?
The LLC must be capable of being represented by at least one person residing in Switzerland. This person must be a managing director or a director (Art. 814 Abs. 3 OR). Purely foreign representation structures are therefore problematic if there is no authorized representative residing in Switzerland.
Does dismissal also terminate the employment contract?
No, not automatically. Dismissal affects the corporate organ status. An employment contract, mandate, or fee arrangement must be reviewed separately and, if necessary, terminated separately (Art. 815 Abs. 5 OR, BGE 111 II 480 E. 1a).
