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The duties of a company member in a GmbH

In the following article we will touch upon the responsibilities and duties of business partners in a limited liability company (GmbH).

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Duties of the partner in a GmbH

Aside from a number of similarities their are a few key differences between limited liability companies and public limited companies. When looking at the legal obligations of individual members one will notice that the shareholders of a public limited company principally have no obligation vis-a-vis the company with the exception of paying-in their share capital. The legal provisions covering public limited companies therefore seems insufficient to govern entrepreneurs who work together with a guarantee of non-competition among their partners. The GmbH allows one to easily create a legal entity like a corporation to a company.

Individual duties

The duties of a partner in a GmbH are as follows: Just like the shareholder, the partner has a duty to provide the paid-in capital, as determined by the ownership of capital stock. The partner, unlike the shareholder, has a duty of loyalty to the company. Statues may even go as far as to codify non-competition clauses to ensure loyalty . Legal provisions regarding this can be found in Art. 776a of the Swiss Code of Obligations (OR). Additionally, it is possible to agree upon certain expanded duties.
Art. 795 OR codifies the duty of subsequent capital contributions. In other words, it can be required that if business is not running well that the partners have a duty to pay in more capital. Art 795a OR foresees that the company’s executive should decide if such renewed capital injection is necessary. This obligation for renewed capital is not a obligation vis-a-vis third parties. The duty for capital increase is, however, not unlimited. Art. 795 Para. 2 outlines that a renewed capital increase cannot exceed twice the nominal value of the initial capital contribution.

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