Fiduciary: How Does it Work?
What Is a Fiduciary?
A fiduciary in Switzerland is a person or entity who manages the assets or interests of a company, the mandatary, under a principal's contract. The fiduciary is responsible for the administration of the company, including the overall management and diligence of the business. Depending on the role, he or she may also be responsible for tax matters, such as tax returns and VAT.
Directors and Corporate Governance
The Responsibilities of Trust Administrators
Legal Basis
Under Article 754 of the Swiss Code of Obligations (CO), members of the Board of Directors and all other persons responsible for the management of a company are liable to the company and to each shareholder or creditor for damage caused intentionally or through negligence. This applies equally to SA (Société Anonyme) than Sàrl (limited liability company).
Liability Conditions
- The person has failed to meet his or her obligations, particularly with regard to due care and diligence.
- The fault was committed through negligence OR intentionally
- Damage results from this fault
- A causal relationship exists
Scope of Liability
The Risks of Being a Principal
It's important to always think carefully before accepting a position as a member of a company's board of directors (director, officer). In this case, monitoring the company's financial statements (ideally with the help of an accountant), controlling the company's affairs and taking out directors' and officers' liability insurance are ways of limiting the risks.
How Can I Protect Myself Against Risks?
It is possible to conclude a contract between the principal and the agent stating that the latter undertakes to assume all costs or damages resulting from the management of the business. However, this agreement would be valid only between the two parties, and would not be enforceable against third parties who had not signed the contract (principle of relativity of contracts).
This means that creditors could still hold the principal liable and demand payment from him in the event of the company's bankruptcy/debt due to mismanagement. They could then ask the agent to reimburse them under the terms of their contract. But if the mandatary does not have the money to do so, the principal will have to pay these amounts without having been reimbursed by the mandatary.
When Should a Trust Administrator Be Called In?
Foreigners and Cross-Border Commuters
A foreigner or cross-border commuter may open a company (SA or Sàrl) in Switzerland, provided he appoints a member of the Board of Directors domiciled in Switzerland, with individual signature.
Management Assistance
Swiss residents wishing to set up their own business can also call on the services of a fiduciary administrator. The trustee will be able to help you manage your finances, taxes and business in general in the best possible way.
Advantages of Hiring a Trust Administrator?
Fidulex's directorship
Would you like to set up a business in Switzerland? Benefit from attractive packages and conditions, as well as personalized support.
Frequently Asked Questions
Who can be a director of a SA or Sàrl?
The director of an AG or GmbH may be a legal entity or an individual. In general, the administrator is a fiduciary company or a person in the fiduciary fieldsuch as a chartered accountant, trustee, tax advisor or finance and accounting specialist.
How do you choose the right trustee?
Choosing the right fiduciary involves thorough research. Fidulex recommends choosing a fiduciary that includes experts and specialists in business management, recognized in Switzerland. It's also a good idea to talk to your friends and family, and to check the reviews of trustees on the Internet.
What is the role of the trustee in corporate governance?
He acts as an agent for the principal and is often a member of the board of directors, to ensure transparency and balance in the management of the company.
When can a trustee be held personally liable?
When should an administrator be called in?
In the foreigners or cross-border commuters wishing to open a business in Switzerland, but also for people who want to benefit from professional management and strategic business advice.
