Liability for entry in the commercial register: consider directors' and officers' liability
(Updated on September 17, 2025)
You were asked to be entered in the commercial register as a Swiss representative for a public limited company (AG) – without a specific function. A mere formality to comply with the law? A simple extra income?
Caution: This supposedly harmless entry can quickly turn into a personal and financial liability trap. Because even without an official title as managing director or board member, in many cases you are liable for the company’s debts and mistakes.
The law requires it: Why does it need this entry?
The Swiss Code of Obligations (Art. 718 para. 4 OR ) is clear: every company limited by shares must be able to be represented by at least one person domiciled in Switzerland. This so-called residence requirement is the reason why people often choose to have a person entered in the commercial register without a specific function title. But this is exactly where the problem begins.
The key question: No function = No liability?
It is a dangerous fallacy to believe that the absence of a title protects against liability. The law distinguishes between the formal status of a corporate body (e.g. the registered board of directors) and the substantive status of a corporate body. The latter results from the actual duties and power that a person has in the company.
Courts look at the facts, not the title
Even if you are only registered “pro forma”: The entry with power of representation alone gives you a powerful position. You can legally represent the company to the outside world.
Doctrine and case law are therefore unanimous: anyone who can represent a company externally also bears the responsibility of a corporate body – title or not. They are legally treated as a so-called “de facto” or “material organ” and are therefore subject to full liability as an organ.
Specific risks: What you can be personally liable for
As a material body, you can be held personally liable for the company’s debts and losses. The greatest risks are
Unpaid social security contributions (AHV/IV/EO)
Taxes not paid (in particular withholding tax and value added tax)
Damage caused by careless management or conduct in breach of duty
Especially if the actual managing directors are based abroad, you are the only tangible person in Switzerland who is the first target for the authorities and creditors.
Checklist: How to protect yourself from the liability trap
Before you accept such an entry, you should take note of the following points:
✅ Assume full liability: Never see the entry as a mere formality. You bear a considerable personal risk.
✅ Check the company and the people behind it: Do you understand the business model? Are the business partners trustworthy?
✅ Contractually regulate the conditions: appropriate financial compensation that covers your personal risk is essential. Also clarify your powers and information rights.
Conclusion: act before it’s too late
A commercial register entry without a function is never just a name on paper – it is a burden with potentially serious financial consequences.
Are you about to make such a decision or are you already registered and unsure about your position? Act before a claim occurs. Our lawyers will examine your situation and show you how you can minimize your personal liability risk.
FAQ - Frequently asked questions about entry in the commercial register without a functional title
Yes, it is possible to enter a person without explicitly specifying their function. In practice, this is often used to fulfill the legal residency requirement of an AG.
Not necessarily formally, but in practice usually yes. Courts do not look at the title, but at the actual function. As you can represent the company with the entry, you are treated as a so-called “de facto organ” and are therefore subject to personal liability.
The greatest risk is that you are legally qualified as a “director” or “de facto board member”. This means that you are subject to full directors’ and officers’ liability(Art. 754 CO). In concrete terms, this means that you are personally liable with your private assets for the company’s debts (e.g. unpaid social security contributions, taxes) and for damages caused by management errors.
No. A simple procuration or power of attorney is not sufficient to fulfill the legal residency requirement. The Swiss Federal Commercial Register Office (EHRA) has clarified in a practice note that the law requires a person with comprehensive power of representation as a corporate body.
Yes, as a de facto governing body you are personally liable for company debts with your private assets. This applies in particular to outstanding claims from the AHV or the tax authorities. If you are the only tangible person in Switzerland, the authorities will contact you directly.
Before you accept such a mandate, you should definitely:
Acknowledge the risk: When in doubt, assume full personal liability. Check the company: Do you understand the business model and are the people acting trustworthy? Draft the contract: Insist on an indemnity that covers your risk and clear contractual provisions on your powers and information rights.
Matthias Fricker
Attorney at law and partner at Fricker and Füllemann Attorneys at Law
Studied at the University of St. Gallen, graduating with a Master in Law (M.A. HSG in Law) in 2012, registered in the Bar Register of the Canton of Zurich, member of the Zurich Bar Association.
Fabian Füllemann
Attorney at law and partner at Fricker and Füllemann Attorneys at Law
Studied at the Universities of St. Gallen and Zurich, graduating with a Master of Law UZH in 2013, registered with the Zurich Bar Registry, member of the Zurich Bar Association.
