Articles
Swiss Directors
Updated on Saturday 12th February 2022 Rate this article
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One of the main requirements when starting a business in Switzerland is to appoint directors and managers. Companies must have one or more directors depending on the legal structures they are registered under.
Below, our company formation specialists in Switzerland explain the main requirements businesses must meet from this point of view.
Legal requirements to appoint company directors in Switzerland
The appointment of company directors in Switzerland is linked to the type of entity registered. The main types of companies that can be created are the private and public limited liability (joint stock) company for which the following must be met:
- - a private company must have at least one director;
- - a public company must have an Administration Board that appoints the directors and managers.
An important aspect is that the directors can be of any nationality but must hold Swiss residence permits in order to exercise their duties in this country. This requirement applies to the single director of a private company, while in the case of a joint stock corporation, the majority must have Swiss residency.
The appointment of directors is established through the Articles of Association, while their nomination will take place during the shareholders’ meeting. The shareholders will pass a resolution in this sense.
Our Swiss company formation agents are at your service with more information on the laws regarding the appointment of directors and managers.
Private company directors in Switzerland
Starting a private company in Switzerland is simpler in terms of company officers’ requirements. It only requires one director, even it can have more, who must be a Swiss resident, but not necessarily a Swiss national. The main requirement is for the person appointed to be at least 18 years old.
In small companies, the general accepted rule is to have 3 directors, while in larger ones, there can be up to 5 directors. It is also possible to use nominee services when the case requires it. This is often the case of foreign business owners who are not well acquainted with the legislation.
As a general rule, directors are appointed by the vote of shareholders.
Our local agents are at your service if you want to open a company in Switzerland and need advice on the appointment of managers.
Management requirements for public companies in Switzerland
Joint stock corporations are usually large enterprises that can also trade shares on the Stock Market, which is why their management is more extensive. These must have a management board made of a chairman and the other directors. The chairman is appointed by the shareholders, while the rest of the members may be nominated by a committee.
Company directors are usually appointed for a period of 3 years, unless the Articles of Association provide otherwise.
Once the directors are appointed, a notification must be filed with the Trade Register. It must contain the resolution through which they were appointed and their personal details.
It is worth noted that the Swiss Company Law does not allow for the appointment of corporate directors.
Our local consultants can also advise on the nomination of company secretaries in Switzerland.
The duties and responsibilities of Swiss directors
A company in Switzerland is managed by its Swiss directors who comprise the Board of Directors. The Board as a whole and the directors as individuals must observe the company’s best interests and conduct any business activities with due care. Directors in Switzerland have a duty of care and a duty of loyalty towards the company they are part of. Also, in exercising their duties, Swiss directors must treat the company's shareholders equally.
The law states that a company director in Switzerland must be at least 18 years of age. There are no restrictions for nationality or gender although it is recommended that the Board of Directors includes both female and male members.
The director’s duties are governed by the following laws and regulations:
- - the Code of Obligations;
- - the Criminal Code;
- - the Federal Act on Mergers, Demergers, Transformations and Transfers of Assets;
- - the company’s own Articles of Association and other internal regulations.
Investors who open a company in Switzerland must observe these specific laws and many other regarding company formation and corporate governance.
A company director's liabilities in Switzerland
Company directors in Switzerland are personally liable to the company, its shareholders and creditors. They are held liable for any intentional or negligent breaches of:
- - the management of the company;
- - their duties as founders or liquidators of the company.
Directors can also be held liable for criminal offences, including:
- - false statements to the Registry of Commerce;
- - disclosing manufacturing/commercial secrets;
- - corporate espionage;
- - breaches of various accounting regulations;
- - forgery of documents, money laundering and many others.
Our company registration experts in Switzerland can offer you a complete list of the liabilities that can be incurred by company directors under various laws applicable in the country.
Appointing directors in Switzerland
The Board of Directors is elected during a special shareholder’s meeting and each director is elected individually. The minimum number of directors is one. Small companies with up to 50 employees will generally have three company directors while middle-sized companies will usually have five directors.
Removal from office of Swiss directors
The Swiss law also provides for the removal of directors in the following situations:
- if their mandates have reached the end (the 3 years period);
- by resignation;
- through a resolution passed by the shareholders;
- because of failing to comply with their duties and obligations.
The removal cannot happen without a shareholders’ meeting who must vote the dismissal from office of one or more directors. In the case of large companies, the committee can also be dissolved.
No matter the case, a notification with the Trade Register must be filed.
Why invest in Switzerland?
According to Heritage’s Economic Freedom Index for 2021, Switzerland ranked 4th in 2021 at a worldwide level, with a total score of 81.9 points. However, at European level, it was the highest-ranking country occupying the first position. This is one of the main reasons to consider starting a company here, especially since business freedom had a total score of 73.6 points. The same goes for trade freedom, which was 86 points.
Switzerland has one of the strongest fiscal system, as it obtained close to the maximum score, 96.9 points, which is a good indicator of the country’s performance from an economic point of view so far.
For more information regarding corporate laws and corporate governance you can contact our company registration agents in Switzerland.
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Being a member of BridgeWest legal network, I had the pleasure to work with colleagues at CompanyFormationSwitzerland.com. They handled successfully numerous company formation cases for my clients interested in starting businesses in Switzerland.
Mihai Cuc, Partner of MHC Law Firm