Swiss DirectorsUpdated on Monday 21st September 2015
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Appointing directors in Switzerland
The management of all Swiss companies implies having a board of directors. Company directors are appointed by the shareholders of the company. However, there are certain requirements depending on the type of company when appointing the directors. The main regulatory framework applicable when appointing directors is the Swiss Code of Obligations and the provisions with respect to company directors are:
- - in case stock corporations the majority of the directors must be Swiss residents,
- - in case of limited liability companies at least one director must by a Swiss resident.
Directors are usually appointed by resolution of the Swiss shareholder’s meeting. The company’s Articles of Association may also contain provisions about the appointment of Swiss directors. The management board must also have a chairman who will be nominated by the board or by the shareholders. The board of directors may also establish a nomination committee, but this isn’t a very common practice in Swiss companies.
The Swiss Companies Register must be notified about the appointment of the company’s director. Directors are usually elected for a period of three years, unless the Articles of Association do not contain other provisions.
Swiss directors’ duties and responsibilities
The Swiss company’s Articles of Association will usually contain information about the directors’ duties and responsibilities. However, the main duty of Swiss directors is that of loyalty towards the company. The directors have the same duty towards the Swiss company’s shareholders, as directors must act in the shareholders’ best interest. The Swiss Commercial Law also establishes specific non-transferable duties of directors. These are:
- - the management of the company,
- - financial planning and supervision of the accounting system,
- - the appointment of other managers,
- - preparation of annual reports and financial statements.
The management board of a Swiss company is also in charge with preparing the shareholders’ general meeting. In case of company liquidation, the directors will be required to file a notification with a Swiss court.
Swiss directors’ liabilities
Together with responsibilities, Swiss directors also have liabilities towards the company. The Swiss Criminal Code establishes certain offences, directors will be held accountable for. Among these are:
- - submitting false statements with the Swiss Trade Register or tax authorities,
- - disclosing sensitive information or trade secret,
- - violation of certain regulations.
For complete information about the best practices in company management you may contact our law firm in Switzerland.