Determination of the executive bodies in a public limited company (PLC)

The mandatory bodies of a public limited company are set out in the Swiss Code of Obligations. These three bodies must always be present.

The Swiss Code of Obligations (OR) prescribes three mandatory bodies for the organization of the AG:

1. General Meeting of Shareholders (GM)
   
2. Board of Directors
   
3. Auditors, whereby <small companies with no more than ten full-time employees on an annual average and with the consent of all shareholders can dispense with this body (see Art. 727a para. 2 CO).
   

The articles of association of the PLC may provide for further bodies , whereby these may not be assigned any tasks that are assigned to one of the above-mentioned mandatory bodies under the CO.

The General Meeting of Shareholders (Art. 698 ff. CO):

The highest decision-making body at the AG is the general meeting of shareholders. The most important powers are assigned to it on a non-transferable basis. These include, for example, the election of the other bodies, the adoption and amendment of the articles of association or the decision on the appropriation of net profit. However, the Annual General Meeting cannot intervene in the functions of the other bodies at will, as each body is in principle solely responsible for its own area of responsibility (so-called parity principle).  Every shareholder is entitled to attend the meeting and to comment on the items on the agenda.

The Board of Directors (Art. 707 ff. OR):

According to dispositive statutory law, the Board of Directors is the management and representative body. In addition, there is a presumption of competence in favor of the Board of Directors, i.e. the Board of Directors can pass resolutions on all matters that are not assigned to another body by law or the Articles of Association. In fact, the Board of Directors is therefore often more important than the General Meeting, which only has to meet once a year and whose agenda items largely depend on the Board of Directors. The members of the Board of Directors are elected by the General Meeting and do not need to be shareholders.

The auditors (Art. 727 ff. CO):

The duties of the auditors include auditing the bookkeeping and the annual financial statements and whether the proposal for the appropriation of retained earnings complies with the law and the articles of association. Furthermore, it has certain reporting and information obligations.

Important: An PLC consisting of only one person is permitted. However, the company and its sole shareholder must consistently comply with the requirements of company law, such as the formal adoption of a resolution if capital is to be withdrawn from the PLC. Otherwise, the creditors do not have to accept the limited liability of the PLC. The legal entity of the PLC then has recourse to the sole shareholder behind it (so-called recourse).

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