We are two equal managing partners (50% each) of a limited liability company (“Sàrl”). The other partner, who acts as chairman of the managers, is sidelining me, and I suspect him of misconduct. What can I do?
June 25, 2025
The following solutions are available to you. Our lawyers are at your disposal to determine with you, depending on the specifics of your individual case, which of these measures best suits your specific needs and the desired objective.
1. Review the Shareholders’ Agreement
The first step is to refer to the shareholders’ agreement, if one exists, or the articles of association and review the mechanisms provided therein. If there is no shareholders’ agreement, the statutory regime applies.
2. Dissolution of the Company
Under Swiss law, a limited liability company can be dissolved, in particular, in the following cases:
- * When the conditions stipulated by the members in the articles of association occur (Art. 821 para. 1 no. 1 CO) or by a resolution of the members’ meeting with a qualified majority (Art. 821 para. 1 no. 2 CO; Art. 808b para. 1 no. 11 CO). Very often, the company’s articles of association stipulate that only the members’ meeting, representing at least two-thirds of the votes cast and the absolute majority of the entire nominal capital for which voting rights can be exercised, can decide on the dissolution of the company.
- * Another case is the opening of bankruptcy proceedings (Art. 821 para. 1 no. 3 CO).
- * A court order dissolving the company for good cause constitutes an additional case (Art. 821 para. 3 CO):
- Any company member may request the court to dissolve the company for good cause. The court may choose another solution that is appropriate to the circumstances and acceptable to the parties involved, in particular, compensating the petitioning company member for their shares at their true value.
Especially when requested for good cause, but also in other situations (such as deficiencies), dissolution should only be a last resort – an ultima ratio. If another solution adequately takes into account the various interests involved, it should generally be preferred. Thus, it can be said that the action for dissolution has a subsidiary character.
In a LLC, good cause can be invoked both within the company and in relation to the other company members or between the applicant and the company. A valid reason exists, in particular, when the essential personal and material conditions under which the company members’ agreement was concluded no longer exist, making the achievement of the company’s purpose impossible, significantly more difficult, or jeopardised, and the continuation of the company can no longer be reasonably expected from the company member
The proportionality requirement is measured by the valid reasons invoked in each individual case. Dissolution can only be ordered if a company member cannot permanently end an unbearable situation for them through other legally provided means to protect their rights. Especially in companies where the exclusion of a company member is possible, this possibility must also be evaluated as an alternative solution to dissolution.
3. Exclusion of the Other Managing Partner
The LLC law allows for requesting the exclusion of a member from the company for good cause from the judge (Art. 823 para. 1 CO).
4. Revocation of Management and Representation Powers
Pursuant to Art. 815 para. 2 CO, any company member may request the court to withdraw or restrict the management and representation powers of a managing director for good cause, particularly if the managing director has seriously breached their duties or is no longer capable of properly managing the company.
5. Voluntary Exit from the Company
According to Art. 822 para. 1 CO, a company member may request the court for approval to resign from the company for good cause. The concept of good cause is to be understood as follows: The continuation of the relationship with the company must be unbearable for the affected company member. The reasons can lie in their personal situation (residence, illness, etc.), in their relationship with the company, in the company’s situation, or that of the other company members. The right to resign is to be applied particularly within the framework of Art. 821 para. 3 CO (dissolution for good cause) if the valid reason lies in the personal situation of the petitioning company member and the company can continue to function without them.
6. Organizational Deficiencies Within the Company
In case of defects in the organisation of a limited liability company and a permanent deadlock situation, the relevant provisions on companies limited by shares apply by analogy (Art. 819 CO). Art. 731b CO allows, in such a case, any member of the company to request the judge to take the necessary measures, in particular, to appoint a commissioner (Art. 731b para. 1 CO) and/or to convene a general meeting.
Unsure whether to resign from the company, exclude the other company member, or rather revoke their management and representation powers, or even request the dissolution of the company or the appointment of a commissioner? Don’t puzzle over this yourself and contact us.
