Functions in a Corporation/LLC: Which Role Is Right for You?

Fri, 03.07.2026, 13:30

Are you in the process of starting a company and wondering which role is right for you and your co founders? Learn about the responsibilities of the board of directors, managing directors and directors, and when a casting vote may be beneficial.

The board of directors of a corporation

A corporation must have at least one member of the board of directors who represents the company. If there is only one board member, this person has individual signing authority. If several board members are planned, they can choose whether to sign with individual signature or with joint signature by two. In the latter case, the signatures of two people are required for a valid contract conclusion.

Please note: By law, the corporation must be represented by at least one person domiciled in Switzerland. This can be one person with individual signing authority or two people with joint signature by two, who are either members of the board of directors or directors.

If there are several board members, one person must also take over the presidency. The chairperson of the board of directors usually leads the board meetings and represents the board externally. These tasks can also be delegated.

The signing authority entered in the commercial register is binding for third parties. Anyone with individual signing authority can therefore validly bind the corporation towards third parties. Whether a corresponding internal resolution has been passed is not relevant for third parties, except in exceptional cases (Art. 718a CO; Art. 933 CO).

The management of the LLC

For an LLC, at least one person must also represent the company, namely a managing director. Alternatively, two or more managing directors can be appointed. They may sign either with individual signature or with joint signature by two. If several people are registered as managing directors, one person must take over the chair of the management.

Here too, the company must be represented by at least one person domiciled in Switzerland. If this is one person, this person must have individual signing authority. If two people are appointed, they must sign with joint signature by two.

The director as an alternative

If a person should receive signing authority but should not be a member of the board of directors of a corporation or the management of an LLC, this person can be appointed as director.

However, a corporation or LLC that only has a director is not possible. The board of directors or the management must always also be able to represent the company (Art. 718 para. 3 CO; Art. 814 para. 2 CO).

The director is not part of the board of directors or the management and is hierarchically subordinate to them. A director may not vote on resolutions of the board of directors or the management. However, the director can legally represent the company externally.

The internal relationship: disagreement on resolutions. Do I need a casting vote?

Signing authority is not the same as decision making authority. Internally, the rules established by the company apply. These can be set out, for example, in organisational regulations, a competence regulation or a function chart.

For example, it can be defined that two members of management are responsible for entering into customer contracts up to a total volume of CHF 100'000 per year, the entire management for contracts between CHF 100'000 and CHF 300'000, and the board of directors for contracts between CHF 300'000 and CHF 500'000. The thresholds are adapted according to the size of the company.

As soon as several people are members of the board of directors or the management, matters within their competence must be voted on. In principle, each member of the board of directors or management has one vote.

Resolutions are passed by the majority of votes cast. The head voting principle applies. In the event of a tie, the articles of association may provide that the chairperson of the board of directors or the chair of the management has the casting vote. If this person votes in favour in such a case, the resolution is deemed adopted. In practice, the chairperson of the board of directors or the chair of the management receives an additional vote.

If, however, all members of the board of directors or managing directors should have equal rights, a casting vote should be avoided. It should be noted that in this case, a motion is deemed rejected in the event of a tie. Especially with an even number of board members, this can lead to deadlock situations that may impair the operational business and cement the status quo.