Board member of a Swiss SA: what are your liabilities?

Updated October 2026 · by Dr Pier Paolo Gori

A board member of a Swiss SA (AG) has duties that cannot be delegated and is personally liable for breaching them. Liability runs towards the company, the shareholders and the creditors. The key risk areas are financial oversight, notifying the court of over-indebtedness and paying social security (AHV/AVS) contributions. With sound organisation and documentation, these risks are manageable, even for non-resident directors.

Which duties can the board not delegate?

The board of directors is the company's highest management and supervisory body. It may hand day-to-day management to executives, but certain duties are non-transferable and inalienable (Art. 716a CO). They include:

• Overall management: issuing the necessary directives and setting the organisation.

• Finance: organising accounting and financial control, and drawing up the financial plan.

• People: appointing and dismissing those who manage and represent the company.

• Oversight: supervising management's compliance with the law, articles, regulations and directives.

• General meeting: preparing the annual report and the general meeting, and implementing its resolutions.

• Crisis: notifying the court in case of over-indebtedness.

What standard of conduct applies to a director?

Directors must perform their duties with all due care and safeguard the company's interests in good faith (Art. 717(1) CO, as cited by the Federal Supreme Court). The standard is objective, not based on personal ability. Courts, however, show restraint when reviewing business decisions after the fact. This assumes a proper process, adequate information and no conflicts of interest.

In practice, keep minutes of meetings and declare every conflict of interest.

When is a director liable with personal assets?

Shareholders risk at most their paid-in capital. Directors, by contrast, are personally liable for damage caused by breaching their duties, intentionally or negligently (Art. 754 CO). The damage may affect the company, individual shareholders or creditors. Liability is joint and several: each member can be pursued for the full amount.

A typical case cited by the federal authorities is failing to notify the court of over-indebtedness.

What must the board do on a capital loss or over-indebtedness?

The revised Swiss company law has been in force since 1 January 2023. On a capital loss, the board must act, either by taking measures or by calling a general meeting (Art. 725a CO).

Where there is a well-founded concern that debts are no longer covered by assets, Art. 725b CO applies:

• Interim accounts: the board prepares interim accounts at going-concern values and at liquidation values.

• Audit: the accounts must be reviewed by the statutory auditor or a licensed auditor.

• Notice to the court: if over-indebtedness is confirmed, the board must as a rule notify the court.

• Exceptions: creditors subordinate their claims. Or there is a well-founded prospect of a turnaround within at most 90 days of the audited accounts, without further endangering creditors.

What other obligations apply, including to directors abroad?

• Person domiciled in Switzerland: every SA must be representable by a Swiss-domiciled person, either a board member or an executive (Art. 718(4) CO). That person must have access to the share register and the register of beneficial owners.

• AHV/AVS contributions: if the company fails to pay contributions, board members and those managing or liquidating the company are secondarily liable (Art. 52 AHVG/LAVS). This requires an intentional or grossly negligent breach; liability is joint and several.

• Taxes: accounting and financial planning, both board duties, are the basis for meeting the company's tax obligations. Tax matters should always be reviewed with licensed tax advisers.

• D&O insurance: in practice, many companies take out liability insurance for their directors and officers. Check the cover and exclusions carefully.

For incorporation steps and choosing your board, see the guide “Setting up a company in Lugano”.

How does a mandate end: discharge, resignation and the commercial register?

With a discharge resolution, the general meeting waives the company's damage claims against its officers (Art. 758 CO). It is not a blanket release: its limits matter, especially towards creditors and third parties.

A resignation takes effect for the future: any liability for the period in office remains. Removal from the commercial register must be notified. If the company does not do so, the person concerned may file the deletion personally (Art. 938b CO). If the only Swiss-domiciled representative leaves, the company must replace them.

Frequently asked questions

Can a director living in Italy sit on the board of a Swiss SA? Yes. However, the law requires that the company can be represented by at least one person domiciled in Switzerland.

Does delegating management to an executive remove liability? No. Delegation is possible, but oversight, organisation and finance remain non-transferable board duties.

Does the general meeting's discharge close every risk? No. It concerns the company's claims and has limits; creditors and social security funds may act on other grounds.

How we work

Collina d'Oro Consulting SA supports directors and shareholders with board organisation, regulations, minutes and commercial register filings. Our team flags in good time the steps linked to capital loss and over-indebtedness. Tax matters are handled in coordination with licensed tax advisers.

Sources: SME Portal – Obligations of the board of directors · SME Portal – Board of directors' duties (IT) · SME Portal – Legal form: SA (IT) · SME Portal – The SA, a common model (IT) · SME Portal – New company law provisions (IT) · FSIO – AHV implementation (IT) · Canton Ticino – Employer liability, Art. 52 LAVS (IT) · Canton Ticino – Commercial register FAQ (IT) · Federal Supreme Court – BGE 139 III 24 · Federal Supreme Court – BGE 150 III 315 · Federal Supreme Court – BGE 131 III 640