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Duties and responsibilities of a swiss limited liability company’s CEO (GmbH)

Duty of care: The CEO has to perform his tasks accurately and has to protect the company’s interests. Therefore, he must not deteriorate the course of business nor make it impossible, neither intentionally nor negligently. However, not every CEO’s wrong decision constitutes an infringement of the duty of care and therefore leads to his liability. Economic activity cannot be error-free. Whether there really is a breach of the duty of care has to be accurately investigated in each particulare case. (Compare also the example below under “Accountability”)

Duty of faith: The CEO has the same duty of faith as the shareholder (GmbH). (Compare the Article on the Shareholder duties)

Duty of non-competition: The CEO must not perform any activity which competes against the company. The  may loosen this duty. Also, the CEO may perform such an activity if every shareholder gives his written consent.

Accountability: If the CEO intentionally or negligently breaches  one of the duties listed above, he is liable to pay damages to the company, and partially even to the company’s shareholders and creditors. Whether the CEO is liable or not is often difficult to say. An example to this: A CEO of a GmbH in Zürich, which among other things trades in chocolate Easter bunnies, purchases a sharply increased amount of such bunnies as Easter approaches, in the expectation of a higher sales volume. Unfortunately, his expectations are not fulfilled, and the majority of the bunnies cannot be sold. This leads to negative financial consequences for the company. However, the CEO has probably neither intentionally nor negligently breached his duty of care. He is rather a victim of a difficult market environment or of a glut. The case should maybe be evaluated differently, if he had knowingly purchased the bunnies for the Swiss national holiday (First of August), since it is public knowledge that there is no increased demand for chocolate bunnies in that period.

Preferably you establish the foundation of your company with STARTUPS.CH. STARTUPS.CH will provide you with professional guidance before and after the foundation. Here you will be able to apply for a counselling interview and to request free documentation.

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