Administrative board mandates

If you are planning to form or acquire a Swiss corporation, the law requires that you have a board of directors responsible for managing the business. A Swiss corporation must be represented by at least one person residing in Switzerland. This person must be registered in the Commercial Register. Foreign sole shareholders who are not domiciled in Switzerland therefore require a representative who is domiciled in Switzerland and who also ensures their anonymity if necessary. Other motives and considerations may prevent the exercise of management by an individual, which in turn requires the appointment of a representative to safeguard their interests. Under no circumstances may members of the Board of Directors be shareholders. Such a board acts in its own name but in the interest and under the direction of a third party, i.e. in a fiduciary capacity.

The details of the term of office, remuneration and termination are regulated by a mandate agreement. The fiduciary accepts instructions from the client, but must carry out its duties in accordance with the law and the Articles of Association. In doing so, it must look after the interests of the company – which may differ from those of the shareholders – and not do anything that could be detrimental to the company.

Therefore, in the event of a dispute, the interests of the company take precedence over those of the shareholders. When acting in a fiduciary capacity, the board is also subject to full legal liability. Liability in Switzerland is very strict. Among other things, directors are personally liable for unpaid social security contributions and taxes. They can be held criminally and civilly liable.