Managing a Swiss company automatically implies having a board of directors, as it is one of the legal requirements in order to incorporate in Switzerland. Company shareholders appoint the company directors. However, company directors must meet certain requirements, depending on the type of company. The main regulatory framework that applies when appointing company directors is the Swiss Code of Obligations.
Requirements for Swiss company directors
In case of corporations (AG), the majority of the directors must be Swiss residents. In the case of limited liability companies (GmbH), at least one of the directors must be a Swiss resident.
The Swiss shareholder’s meeting appoints the company directors by resolution. However, the company’s Articles of Association may contain in some cases provisions regarding the appointment of Swiss directors.
The management board must have a chairman, a person who is also nominated by the board of shareholders. The board of directors may establish a nomination committee, but this is not a usual practice for Swiss companies.
The company director must be at least 18 years old. There are no restrictions regarding gender or nationality, but it is recommended that the Board of Directors should include male and female members.
Small companies, with up to 50 employees generally have three company directors, while middle – sized and larger companies have usually five company directors.
After the company director is appointed, the Swiss Companies Register must be notified about the procedure. Swiss company directors are usually elected for a period of three years, if the Articles of Associations don’t include other specific provisions in this regard.
Duties and responsibilities of Swiss Directors
In most cases, the Articles of Association will contain information about the duties and responsibilities of the company director. However, it’s important to know that in Switzerland the main duty of the company director is to show loyalty towards the company. The same loyalty duty applies to the company’s shareholders as well, as company directors must act in the best interest of the shareholders.
The Swiss Commercial Law establishes specific duties for directors that are not transferable:
- Company management;
- Financial planning and supervision of accounting;
- Appointment of other company managers;
- Preparation of annual reports and financial statements.
In addition to the Swiss Commercial Law, the Code of Obligations and the Federal Act on Mergers, Demergers, Transformations and Transfers of Assets govern the company director’s duties.
The management board of a Swiss company is in charge with preparing the general meeting of the shareholders. The company directors will be required to file a notification with a Swiss court, in the case of company liquidation.
Liabilities of Swiss directors
Asides from responsibilities, Swiss company directors also have liabilities towards the company. The Swiss Criminal Code establishes certain situations in which company directors are held accountable. These situations include the following:
- Submitting false statements with the Swiss Trade Register or other tax authorities;
- Disclosing trade secrets or sensitive information;
- Corporate espionage;
- Forgery of documents;
- Money laundering;
- Violations of certain regulations.
Considering all these aspects, it is important for foreign investors interested in incorporating in Switzerland to appoint company directors that meet the requested criteria. Nevertheless, it is possible to acquire the services of a firm specialized in incorporating Swiss companies, as they will be able to provide company directors, if necessary.