The managing officer of a GmbH: role, powers and liability

In the GmbH (Sagl), the figure who leads day-to-day business is the managing officer. It is the functional equivalent of the director in the AG, but with some particularities that stem from the more personal nature of the limited liability company. If you are founding a GmbH or taking on its management, these are the points you need to know.

Who manages the GmbH

The basic principle is clear-cut: unless the articles of association provide otherwise, all the members manage the company jointly. This is the model of management by the members, consistent with the personal character of the GmbH.

In practice, however, most GmbHs entrust management to one or more designated managing officers, who may be members or third parties. The articles of association govern who manages and how.

One requirement is mandatory: the company must be capable of being represented by at least one person domiciled in Switzerland — a managing officer with individual signatory power, or two persons with joint signature by two, both resident. Without this anchoring, the company cannot be entered in the commercial register.

The powers: management and representation

The managing officer’s role operates on two levels.

Management (internal level)

The managing officer conducts the company’s business, takes the operational decisions and implements the strategy. Some tasks, however, remain non-transferable, by analogy with the board of directors of the AG:

• the ultimate direction of the company and the issuing of the necessary directives;
• the determination of the organisation;
• the organisation of the accounting and of financial control;
• the ultimate supervision of the persons entrusted with management;
• the preparation of the management report and of the members’ meeting;
• the notifications in the event of capital loss and over-indebtedness.

Representation (external level)

The managing officer with signatory power binds the company towards third parties. The powers of representation and the type of signature (individual or joint) are entered in the commercial register, where anyone can verify them. Towards third parties in good faith, the power of representation covers all acts that fall within the company’s purpose.

Duties of care and loyalty

As for the directors of the AG, the managing officer is bound by two central duties:

• Care: to manage with the diligence of a conscientious managing officer, informing themselves before deciding.
• Loyalty: to act in the interest of the company and not for their own gain.

From this flows an element typical of the GmbH: the non-compete duty. Unless the other members consent otherwise or the articles provide for it, the managing officer may not carry on an activity that competes with that of the company. It is a rule that does not exist in the AG in an equally stringent form, and which in the GmbH reflects the closer bond between people and business.

Personal liability

The point no managing officer should underestimate: liability is personal. If the managing officer breaches their duties and damage results to the company, the members or the creditors, they answer with their own assets.

The most frequent areas of risk are concrete and recurring:

• failure to pay, or late payment of, social security contributions and VAT;
• delay in notifying the court in the event of over-indebtedness;
• deficient or absent bookkeeping;
• decisions taken in a conflict of interest.

The fact that the GmbH has limited liability protects the members on the capital invested, but does not protect the managing officer from the consequences of negligent management. These are two different levels that are often confused.

Appointment, removal and registration

Managing officers are appointed by the members’ meeting and may be removed by it. Every appointment, cessation or change to signatory powers must be entered in the commercial register. Keeping the registration aligned with reality is not a detail: a managing officer who has left the role but is still registered remains exposed towards third parties.

Our support at SIH ONE

We support managing officers in bookkeeping, liquidity monitoring and compliance with AHV (state pension) and VAT obligations, reducing precisely the areas in which personal liability arises. With an AI-native model, we keep deadlines and obligations under control without weighing down the management.

Are you taking on, or already hold, the role of managing officer of a GmbH and want to handle it without exposing yourself to needless risks? Discover our legal and tax advisory services and set the management on solid foundations.