Frequently Asked Question

What does setgid do on a file versus on a directory?

On an executable file, the setgid bit (octal 2000, displayed as s in the group's execute position) is the group analogue of setuid: the resulting process runs with the file's group as its effective GID instead of the invoker's. This is how games used to write to a shared scoreboard owned by a games group, or how a mail program might be granted write access to /var/spool/mail through a mail group without needing full root privileges.

On a directory, setgid has a completely different and much more useful meaning: files created inside the directory inherit the directory's group rather than the creator's primary group, and new subdirectories themselves keep the setgid bit set. That is exactly what you want for a shared project tree, chmod 2775 /srv/project; chgrp developers /srv/project makes everything underneath belong to the developers group automatically, so any team member can edit anyone else's files (combined with a group-writable umask). It is the standard recipe for genuinely shared directories on Linux.