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 representation rights change.
With the LLC, it is important to distinguish between three levels. First, there is the corporate position as managing director. Second, there is the power of representation, i.e., who may legally represent the LLC to the outside world. Third, there may additionally be an employment or mandate relationship, which must be assessed separately.
The LLC is legally strongly aligned with its shareholders. The supreme governing body is the shareholders' meeting, and it is responsible, among other things, for appointing and removing 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 personally structured capital company with personal proximity between shareholders and 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 every change of managing director at the LLC. Many LLCs use articles of association that provide for certain persons to be elected as managing directors. In this case, the change is usually made by resolution of the shareholders' meeting. In the absence of a deviating statutory provision, the legal self-governance applies. All shareholders are managing directors. In such a model, an individual shareholder cannot simply be "voted out" like an external managing director. In this case, a new statutory provision or another corporate law solution is usually required (Art. 809 Abs. 1 OR).
Only natural persons are eligible to act as managing directors. If a legal entity or a commercial company is a shareholder 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 chairmanship must also be regulated (Art. 809 Abs. 3 OR).
How is a managing director removed or newly appointed?
The shareholders' meeting can remove managing directors it has elected at any time (Art. 815 Abs. 1 OR). In principle, an important reason is not required for this. This is practically important because the corporate position can be changed flexibly.
The situation is different if the management power is not based on an election by the shareholders' meeting, but follows directly from the law or the articles of association. In this case, a simple resolution of removal may not be sufficient. The articles of association must be checked first. This is precisely where many mistakes happen in practice: the company registers a personnel mutation even though the articles of association do not support the desired structure.
A managing director can also lose his function if a court, at the request of a shareholder, withdraws or restricts his management and representation power. This requires an important reason, such as a gross breach of duty or the loss of the ability to manage the business properly (Art. 815 Abs. 2 OR).
It is also important to note that removal as managing director does not automatically terminate any employment, mandate, or fee relationship. 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 amendment 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 person who has stepped down also has the right to register the deletion of their entry themselves (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 becomes effective internally. According to case law, the removal can already be effective in the internal relationship 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 needed for a change of managing director?
The exact requirements may be handled slightly differently depending on the canton and the specific situation. Typically, however, you need a commercial register application, the resolution of the shareholders' meeting or a corresponding excerpt of the minutes, a declaration of acceptance of the newly elected person, if applicable a declaration of resignation of the outgoing person, and a certified signature specimen if the new person receives signing authority.
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 legally signed (Art. 20 Abs. 2 HRegV).
If a person with signing authority is registered for entry, they must deposit their handwritten signature with the commercial register office. This can be done by signing at the commercial register office, by a certified signature, or under the legal conditions electronically (Art. 21 Abs. 1 HRegV, Art. 21 Abs. 3 HRegV).
In practice, it is worth looking at the articles of association before registering. They often state whether the managing directors are elected by the shareholders' meeting, how the signing authority is structured, and whether a chairmanship 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 single signature or joint signature by two. However, at least one managing director must be authorized to represent the company (Art. 814 Abs. 2 OR).
Restrictions on representation power often have a stronger effect internally than externally. Vis-à-vis third parties acting in good faith, the LLC cannot simply rely on internal restrictions of authority. The situation is different in particular with registrable 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 position 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 steps down completely from the management.
Does the LLC need a person residing in Switzerland?
Yes. The LLC must be able to be 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 statutory representation requirement. Especially for international founder teams or holdings with foreign shareholders, this point is particularly important when changing managing directors.
What mistakes happen frequently 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 up the corporate position and the employment contract. Anyone who is removed as managing director is no longer a corporate body under company law. However, an employment contract, fee entitlement, or mandate can 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 fee entitlement if the person could no longer actually influence the business activity (BGE 111 II 480 E. 2a).
An incomplete commercial register application is also delicate. If minutes, declaration of acceptance, declaration of resignation, or certified signature are missing, the registration is delayed. If you need support with mutations, Jurata is happy to help you at any time: Handelsregistermutation.
Conclusion: Plan the 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. Decisive factors are the articles of association, the correct resolution, the correct registration, and a clean regulation of signing authority.
Particularly important is the distinction between corporate position, representation right, and contractual relationship. The corporate position can be terminated under company law, while an employment or mandate relationship must be treated separately. At the same time, the commercial register entry must be updated quickly so that it is clear to the outside world who is authorized to manage and represent the LLC.
Frequently asked questions about the change of managing director at the LLC
Can a managing director of an LLC be removed at any time?
In principle, a managing director elected by the shareholders' meeting can be removed at any time (Art. 815 Abs. 1 OR). Whether a simple resolution is sufficient, however, depends on the articles of association and the specific management regulations.
Does the outgoing managing director have to sign themselves?
Not always. In principle, the application is made by persons authorized to sign or an authorized third party (Art. 17 Abs. 1 HRegV). However, an outgoing person can also register the deletion of their entry themselves (Art. 933 Abs. 2 OR, Art. 17 Abs. 2 lit. a HRegV).
Is an LLC allowed to have managing directors only abroad?
The LLC must be able to be represented by at least one person residing in Switzerland. This person must be a managing director or director (Art. 814 Abs. 3 OR). Purely foreign representation structures are therefore problematic if there is no authorized representative residing in Switzerland.
Does the removal also terminate the employment contract?
No, not automatically. The removal affects the corporate position. An employment contract, mandate, or fee relationship must be checked separately and, if necessary, terminated separately (Art. 815 Abs. 5 OR, BGE 111 II 480 E. 1a).
