Directors Service Agreement Template for Switzerland

A Directors Service Agreement is a legally binding contract that formalises the appointment of a director to a Swiss company, whether an AG/SA or GmbH/Sàrl entity. This comprehensive document establishes the terms of service, duties, compensation, and responsibilities that govern the director-company relationship under Swiss law. The agreement serves as both a protective measure for the company and a clear framework for the director's role and expectations.

When do you need this document?

You need a Directors Service Agreement whenever appointing a new director to your Swiss company, whether for a startup, established business, or during corporate restructuring. The document becomes essential when expanding your board, replacing departing directors, or formalising existing informal arrangements. It's particularly crucial for international companies establishing Swiss operations, family businesses transitioning to professional management, or companies preparing for investment rounds where clear governance structures are required. The agreement is also necessary when directors receive significant compensation packages or when the role involves substantial time commitments beyond typical board duties.

Key legal considerations

The agreement must clearly define the director's fiduciary duties under the Swiss Code of Obligations, including loyalty, care, and business judgment obligations. Compensation structures must comply with Swiss social security regulations, particularly AHVG requirements, and distinguish between board fees and employment-related payments. The document should address potential conflicts of interest, confidentiality obligations, and any non-compete restrictions within legal limits. Termination provisions must balance company protection with fair treatment of the director, considering both contractual and statutory notice periods. Insurance and indemnification clauses are crucial for protecting directors from personal liability while serving the company's interests. The agreement should also address data protection obligations under Swiss privacy laws and any cross-border considerations for international directors.

Legal requirements in Switzerland

Swiss corporate law under the Code of Obligations requires directors to act with appropriate care and maintain undivided loyalty to the company. The agreement must specify whether the director is considered an employee or independent contractor for social security purposes, affecting AHVG, UVG, and occupational pension contributions. For AG/SA companies, director appointments require shareholder approval, while GmbH/Sàrl companies may have different approval mechanisms as specified in articles of association. The document must comply with Swiss employment law provisions where applicable, including working time regulations and termination protections. All compensation above certain thresholds triggers specific tax reporting requirements, and the agreement should address these obligations. The Federal Act on Merger, Demerger, Transformation and Transfer of Assets may impose additional duties during corporate restructuring events, requiring specific provisions in the service agreement.