In a small Swiss company limited by shares, the founder may be a shareholder, a board member and the chief executive. These roles can belong to the same person, but they involve different powers. Voting at a shareholders’ meeting, overseeing the company and running its daily operations are separate tasks.
The board of directors of a Swiss SA or AG is responsible for the company’s overall direction and supervision. It retains important duties even when management is delegated. Here is how to organise an effective board, understand personal liability and identify financial problems early.
Key points
- A Swiss SA/AG needs at least one director: an individual elected by the general meeting. Directors do not have to own shares.
- The board sets the organisation, supervises management and retains duties it cannot hand over to executives or an accountant.
- For an unlisted company, the default term is three years, unless the articles provide otherwise, up to six years. Listed companies follow an annual election rule.
- The company must be capable of representation by a board member or executive officer resident in Switzerland, with appropriate signing authority.
- The board must monitor solvency and act promptly if there is capital loss or reason to suspect overindebtedness.
Board, management and shareholders: who decides what?
The general meeting exercises the powers reserved to shareholders by law and the articles of association, including electing directors and approving the annual accounts. The board directs and organises the company at the highest level. Executive management can take on day-to-day operations under the organisational regulations.
| Body or role | Examples of responsibilities |
|---|---|
| General meeting of shareholders | Elect directors, approve accounts and amend the articles of association. |
| Board of directors | Set the organisation, appoint management and supervise finances and operations. |
| Executive management | Carry out delegated management tasks and report to the board. |
| Auditor, where appointed | Perform the audit or review required by law. |
A director must act in the company’s interests, with due care and loyalty, rather than simply following the wishes of the shareholder who nominated them. Conflicts of interest must be disclosed promptly and fully; the board must take the measures needed to protect the company under Article 717a CO.
For example, a director offers to rent their own premises to the company. Compare the rent with market terms, disclose the personal interest and arrange an independent decision appropriate to the conflict. Record the assessment and decision in the minutes. An informal understanding between friends does not replace this work.
For the legal structure itself, see our guide to the Swiss company limited by shares.
What about an LLC? A Swiss LLC (Sàrl/GmbH) has managing directors rather than a board of directors in the SA sense. See our guide to LLC members, managing directors and signing authority.
How a Swiss limited company (SA/AG) works
Romain Prieur explains the structure of a Swiss company limited by shares. The original video is in French.
Explore the Entreprendre en Suisse avec Sarah et Romain channel →
Duties the board must retain
Article 716a of the Code of Obligations lists the board’s non-transferable and inalienable duties. In practical terms, an SME’s board must:
- Set the overall direction and issue the necessary instructions.
- Define the organisation and allocation of responsibilities.
- Establish accounting, financial-control and financial-planning arrangements where needed.
- Appoint and remove those responsible for management and representation.
- Supervise their activities and compliance with the relevant rules.
- Prepare the annual report and general meeting, then implement its resolutions.
- Take the legally required steps when the financial position demands action.
The board can divide preparatory work between members or create committees. It must still ensure that all directors receive the information needed to fulfil their role.
A simple example: management may buy equipment within an approved budget. The board remains responsible for setting that framework, receiving financial information and responding when spending or cash flow departs from the plan.
Delegating work does not remove the duty to supervise
An accounting firm can keep the books and executives can run operations. The board must still understand the numbers, ask questions and decide what action is needed. Assuming that “the accountant is dealing with it” is not an adequate monitoring process.
The organisational regulations describe delegated tasks, roles and reporting obligations. They should match the articles of association and the way the company actually operates.
Who can be a director of a Swiss company?
The board consists of one or more individuals. A legal entity cannot itself sit on the board: an individual must be elected. There is no general requirement to be a shareholder.
For a small business, choose the skills you actually need, such as industry knowledge, finance, organisation or business development. Adding directors without defining their contribution can make decisions harder.
Does a Swiss company need a Swiss director?
Swiss nationality is not generally required. The company must be capable of representation by a person resident in Switzerland, who must be a board member or an executive officer. At least one board member must also have authority to represent the company.
Check the combination of residence and signing authority, especially where two signatures are required jointly. A Swiss address attached to a person’s name is not enough if that person cannot provide the required representation.
The resident representative must also have access to the share register under Article 718 paragraph 4 CO.
How long does a director’s term last?
For an unlisted company, the statutory default is three years. The articles may set a different term, up to a maximum of six years. Re-election is possible.
For a listed company, the term ends no later than the conclusion of the next ordinary general meeting, and directors are elected individually. Keep a renewal calendar so that appointments do not lapse unnoticed.
Board meetings, decisions and minutes
Set the meeting frequency according to the business and its risks. A fast-growing company or one in financial difficulty needs closer monitoring than a stable operation. Circulate an agenda and the figures before the meeting.
In an unlisted company, the board elects its own chair unless the articles reserve that choice to the general meeting. In a listed company, the general meeting elects the chair under Article 712 CO.
Decisions are taken by a majority of votes cast. The chair has a casting vote unless the articles provide otherwise. Article 713 also permits certain electronic or written decisions, subject to the relevant conditions and a director’s right to request discussion.
The discussions and decisions must be recorded in minutes signed by the chair and the person who prepared them. State the decision, the person responsible for carrying it out and the deadline. Important decisions should not disappear into informal email exchanges.
What should a useful board pack contain?
Provide an overview of cash, results, customer receivables, significant debts and upcoming commitments. Add operational risks and decisions beyond management’s delegated authority. Directors must be able to ask questions and obtain documented answers.
What must the board do when finances deteriorate?
Swiss law distinguishes several situations. They are not one single threshold that automatically triggers bankruptcy.
Risk of insolvency: monitor the ability to pay
Article 725 CO requires the board to monitor solvency and act promptly if the company risks being unable to pay debts as they fall due. A profitable company can still run out of cash when customers pay late.
Capital loss: restore the equity position
Article 725a concerns a situation in which assets, after deducting liabilities, no longer cover half the combined share capital and relevant non-repayable statutory reserves. The board must take action and submit measures within the general meeting’s powers to shareholders.
If the company has no auditor, the board must appoint a licensed auditor to carry out a limited audit of the latest annual accounts before they are approved. This obligation ceases if the board applies for a debt-restructuring moratorium. Having previously opted out of an audit does not, by itself, avoid this requirement.
Suspected overindebtedness: prepare interim accounts immediately
Where there is justified concern that liabilities are no longer covered by assets, Article 725b requires immediate interim accounts at the relevant values and an audit of those accounts. Whether the business can continue affects the values to use.
If overindebtedness is established under the statutory conditions, the board must notify the court. One possible exception involves sufficient subordination of creditors’ claims: creditors agree to rank behind all other creditors to the extent of the shortfall, with deferral and coverage of interest during overindebtedness. A vague promise not to demand payment immediately is insufficient.
Another exception requires justified grounds to expect that overindebtedness can be eliminated in time, no later than 90 days after the interim accounts are prepared, without putting creditors’ claims at further risk. This is not permission to wait 90 days before acting. Assess the situation immediately and document the measures, financing and follow-up.
The board notifies the court; it does not itself declare bankruptcy. A voluntary liquidation cannot be used to sidestep the duties relating to overindebtedness.
Two balance sheets that explain the warning signs
Consider an SA with fully paid share capital of CHF 100,000 and no statutory reserves included in this calculation. These simplified figures illustrate the distinction; they are not a complete legal assessment.
| Situation | Assets | Liabilities | Equity |
|---|---|---|---|
| First balance sheet | CHF 130,000 | CHF 90,000 | CHF 40,000 |
| Second balance sheet | CHF 80,000 | CHF 90,000 | CHF −10,000 |
In the first case, CHF 40,000 of equity no longer covers half the CHF 100,000 share capital: this illustrates capital loss. In the second, liabilities exceed assets at the values used. The board must examine overindebtedness, going-concern and liquidation values, and the measures required. The table alone does not establish that immediate bankruptcy is inevitable.
Conversely, positive equity does not guarantee that Friday’s bills can be paid. Large customer receivables may remain unpaid while wages and social contributions fall due. Monitor both the balance sheet and cash flow.
Unpaid AHV contributions: when personal assets are exposed
If the company cannot cover social-security contributions and causes a loss to the insurance scheme, directors may be personally liable where they intentionally or through gross negligence breach their duties, under Article 52 of the Old-Age and Survivors’ Insurance Act. Their liability is subsidiary to the company’s. Several people responsible for the same loss are jointly and severally liable.
For example, AHV statements and payment demands accumulate, but the board keeps paying wages without checking how the related contributions will be funded or requiring corrective action. This failure to supervise can create personal liability. Outsourcing payroll does not remove the need to check that declarations and payments are made.
Regularly obtain the compensation office’s account statement, reconcile it with the books and document your response to arrears. A missed payment does not automatically make every director liable: the legal conditions include a loss, the required degree of fault and a causal connection.
A business loss does not automatically mean director misconduct
A company can lose money despite reasonable decisions. Personal liability does not arise from a poor result alone. Under the applicable rules, it requires elements such as a breach of duty, loss, fault and causation.
The board should be able to show what information it considered, what questions it asked and what it decided. Minutes stating only “the accounts were approved” explain little about its response to a warning. Record the problem, options, decision, responsible person and review date.
The guide to overindebtedness and notifying the court details the measures directors must examine.
Before accepting a Swiss directorship: a practical checklist
Accepting a directorship means participating in the company’s direction and supervision. Being appointed because you live in Switzerland does not reduce those duties. Check that the resident representative’s signing powers genuinely satisfy the representation requirement.
| Check before accepting | Documents or answers to obtain |
|---|---|
| Financial position | Latest annual accounts, a recent balance sheet, debts and cash forecasts. Understand losses and funding needs. |
| AHV and taxes | Returns, account statements and payment evidence, including arrears and payment agreements. |
| Information and oversight | Effective access to financial information, bank statements and key contacts, with an agreed reporting timetable. |
| Organisation and representation | Articles, organisational regulations, signing powers, share register and transparency obligations. |
| Risks and insurance | Significant contracts and guarantees, disputes and D&O insurance: insured persons, limits and exclusions. |
| Terms of the appointment | Expected work, availability, remuneration, expenses, term, resignation and handover arrangements. |
If essential accounts or supporting documents are unavailable, obtain them before accepting. An appointment agreement organises the relationship; it does not eliminate statutory duties towards the company and creditors.
How is directors’ remuneration treated?
Fees, profit-related payments and attendance fees for a board appointment generally count as salary for AHV purposes under Article 7(h) of the AHV Ordinance. Calling a payment a “fee” on an invoice does not automatically make it self-employed income.
Arrange payroll and contribution treatment from the outset. International situations or payments to the director’s employer require assessment of the applicable social-security system and payment recipient.
How do you resign from a Swiss board?
Notify the company in writing and keep proof of receipt. Hand over outstanding matters, access rights and deadlines. Then check that your removal is recorded in the commercial register. You can request that deletion yourself with the necessary supporting documents under Article 933 paragraph 2 CO and Article 17 of the Commercial Register Ordinance.
Resignation ends the role; it does not erase potential liability arising from your time in office. The company must maintain a legally compliant organisation and representation after your departure.
Organise ongoing supervision
Choose available directors with complementary skills, give them access to information, keep minutes and follow up decisions. Update the commercial register when appointments or signing powers change.
Repeat the checks throughout the appointment: insurance renewal, new loans, changes of signatories and emerging risks. A checklist completed on joining the board does not replace ongoing oversight.
Include the share register and Swiss transparency register in the compliance calendar. Since 1 October 2026, the applicable federal transparency legislation requires covered entities to identify and report their beneficial owners. Under Article 12, the highest-ranking member of the management body may delegate reporting but remains responsible for its proper completion.
Example agenda for a small Swiss company
For each item, prepare information to read, a decision to take and an action to follow. The table is a practical example, not a statutory meeting schedule.
| Agenda item | Useful document | Decision or follow-up to record |
|---|---|---|
| Cash | 12-week forecast and tax and social-contribution due dates | Approve funding measures and the next update date. |
| Overdue customers | Aged receivables and disputed invoices | Name the person following up major balances and set a deadline. |
| Results and equity | Actual results against budget and a recent balance sheet | Explain variances and consider required measures if finances deteriorate. |
| Major contract or investment | Proposed contract, total cost and cash-flow impact | Approve, reject or request clarification; record conflicts of interest. |
| Business continuity | Dependence on a key customer, employee or piece of equipment | Assign preventive actions and monitor progress. |
Finish with dated actions. “Monitor unpaid invoices” is vague. “Call the three customers responsible for 80% of overdue balances before Friday and report back to the board” can be checked.
A useful board asks the right questions in time
A board’s value is not measured by its number of meetings. It lies in understanding risks, making informed decisions and checking implementation. A simple organisation with consistent follow-up serves the company better than impressive job titles without real supervision.
Frequently asked questions about Swiss boards
Can a Swiss SA have only one director?
Yes. The company must nevertheless meet all organisational and representation requirements, including the requirement for representation by a suitably authorised person resident in Switzerland.
Does a director have to be a shareholder?
No. The general meeting can elect an external person with relevant skills.
Does an accounting firm take over the board’s responsibilities?
No. It can carry out agreed work and advise the company, but directors retain their statutory duties of direction and supervision.
How often should the board review cash flow?
Regularly, at a frequency suited to the business, and more often when payments become difficult. Waiting for the annual accounts can be too late.
Can directors be liable for unpaid AHV contributions?
They may be personally liable for a loss the company cannot cover if the legal conditions are met, including an intentional or grossly negligent breach of duties. Several people responsible for the same loss are jointly and severally liable. Arrears alone do not automatically make every director liable.
How can I resign from a Swiss board?
Give written notice to the company, keep proof of receipt, arrange a handover and check your removal from the commercial register. You may request the register deletion yourself with the required documents. Potential liability for your time in office does not automatically disappear.
Must a director live in Switzerland?
The company must be capable of representation by a board member or executive officer resident in Switzerland with the necessary powers and access to the share register. That person does not necessarily have to be a board member or a Swiss national.
Sources
References checked on 5 November 2026. The Code of Obligations is available in English; other official texts below are labelled where the linked version is French.
- Swiss Code of Obligations, particularly Articles 698, 707, 710, 712–713, 716a–718, 725–725b, 754 and 933.
- Federal legislation on legal-entity transparency, including Articles 9–12 and 51 (French).
- Old-Age and Survivors’ Insurance Act, Article 52: liability for losses (French).
- AHV Ordinance, Article 7(h): remuneration of governing bodies (French).
- Commercial Register Ordinance, Article 17: persons entitled to request registration (French).
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Romain Prieur is a Swiss Certified Public Accountant and founder of Entreprendre.ch. With more than ten years of experience in audit and business advisory in Switzerland, he advises entrepreneurs on company formation, accounting and tax.
