Managing Director/Administrative Board of GmbH and AG in Switzerland

Since 2015, a Swiss GmbH or AG requires at least one managing director, or board of directors, who resides in Switzerland. Therefore, foreigners not residing in Switzerland cannot easily establish a Swiss company. Findea AG offers the solution with its managing director and board of directors mandate.

Who needs this?

‍Foreigners who want to establish a corporation (AG and GmbH) in Switzerland and do not themselves reside here, need a representative residing in Switzerland since 2015. In the case of GmbH, Article 814 Abs. 4 mandates that the company must be represented by at least one managing director or director who has residence in Switzerland. For AG, according to Article 718 Abs. 4 CO, at least one board of directors or director residing in Switzerland is required. In smaller companies, it is usually a trustee who takes on this role and manages the company's administration.

‍What are the duties of a managing director or board of directors?

‍A managing director or board of directors ensures the organization and management of the company and is responsible for all matters that are not the responsibility of the shareholder meeting. These duties specifically include, according to Art. 810 Abs. 2 CO:

1. the superior management of the company and issuing necessary instructions;
2. defining the organization within the framework of the law and statutes;
3. designing the accounting and financial control as well as financial planning, if necessary for managing the company;
4. overseeing the individuals who have parts of management responsibilities, especially concerning compliance with laws, statutes, regulations, and instructions;
5. creating the business report (annual accounts, annual report and, if applicable, group accounts);
6. preparing the shareholders' meeting and executing its resolutions;
7. notifying the court in case of over-indebtedness.

If there is only one managing director, they must also carry out the following tasks according to Abs. 3:

1. convening and chairing the shareholders' meeting;
2. announcements to the shareholders;
3. ensuring necessary registrations with the commercial register.

The board of directors must, according to Art. 716a Abs. 1 No. 4 CO, also appoint and dismiss persons entrusted with management and representation.

‍What is a managing director or board of directors liable for?

‍While a corporation's assets are only liable for debts, according to Art. 754 CO, managing directors and board members can also be held personally liable. If damage occurs and it can be proven that the managing director intentionally or negligently breached a duty and that a connection exists between this breach of duty and the damage, they are personally liable. Thus, the managing director is liable for unpaid VAT and social contributions as well as for unpaid withholding taxes on profit distributions.

For these reasons, the managing director mandate is therefore a risky business for anyone offering it. Often, a deposit is required to indemnify oneself with the proceeds from the deposit.

‍Who offers this service?

‍Findea AG has specialists who offer this service and have been specifically trained for it.

‍What does this service cost?

‍We offer you a managing director or board of directors mandate starting at CHF 5,000 p.a. In risk transactions, a deposit is usually also required to be able to pay unpaid VAT or social costs.

‍Findea helps you keep your taxes simple and straightforward.