Signatory powers and procuration: sole and joint

Who can bind the company with their signature? It is a question that seems technical but touches the heart of a company’s daily life: contracts, bank accounts, orders, dealings with the authorities. In Switzerland, signatory powers are organised with precision and are entered in the commercial register, so that anyone can verify them. Let’s see how they work.

Sole signature and joint signature

The power of representation can take two main forms:

• Sole signature: the person can bind the company on their own. Their signature alone is enough to conclude a valid contract.
• Joint signature: the person can bind the company only together with another. The most common form is the joint signature by two, in which two joint signatures are needed to bind the company.

The choice between the two forms is a governance decision. The sole signature is quicker and more convenient, but concentrates considerable power in a single person. The joint signature by two introduces mutual control: no one binds the company alone. Many companies adopt a mixed model — sole signature for certain senior figures, joint for the others.

What “binding the company” means

Whoever holds signatory power acts as an organ or representative of the company towards the outside. Their signature, within the limits of the registered powers, binds the company vis-à-vis third parties in good faith. This is an essential point: the third party who contracts with someone registered with signatory power is protected, even if internally different instructions existed.

For this reason, registration in the commercial register is not a formality: it defines, towards the outside world, who can bind the company, and how.

Procuration: a delegated power of representation

Alongside the signatory powers of the organs (directors, managing officers), the company can grant procurations. Procuration is the conferral on a person of the power to represent the company in specific acts. Procuration too can be entered in the commercial register and, as with the signature, can be sole or joint.

Swiss commercial practice distinguishes in particular:

• the registered attorney (with commercial procuration), authorised to carry out the acts that running the business ordinarily entails;
• the commercial agent, with more limited powers, tied to specific duties.

The difference between these figures lies in the breadth of the powers. Defining it correctly avoids both giving too much power to those who should not have it and paralysing operations by leaving key people without autonomy.

Registration in the commercial register

For signatory powers and procurations to be enforceable against third parties, they must be entered in the commercial register. The entry indicates the person’s name, the type of power (sole or joint) and the function. Every change — new signature, revocation, change of arrangement — requires an update.

Keeping the register aligned with reality is important: a person who has left the company but is still registered with signatory power can, in principle, continue to bind it towards third parties in good faith until the entry is cancelled. Timely revocation is therefore a concrete protective measure.

The link with the Swiss domicile requirement

Signatory powers intertwine with a fundamental organisational requirement: the company must be capable of being represented by at least one person domiciled in Switzerland with signatory power. This means that, in designing the signature scheme, one must ensure that the Swiss “anchor” is always covered — whether by sole signature or in a joint combination.

A common mistake is to set up a system of only joint signatures by two among persons all resident abroad, leaving the requirement uncovered. The design of the powers must therefore be conceived together with the representation structure.

How to set up a good signature scheme

Some useful principles:

• Proportion to risk: the more significant an act, the more sense it makes to require a joint signature.
• Operational continuity: avoid the absence of one person blocking day-to-day activity.
• Traceability: keep the register always up to date after every change of role.
• Consistency with governance: signatures must reflect the actual allocation of responsibility, not be assigned at random.

A good signature scheme protects the company from abuse and keeps it agile. A poorly designed scheme is a source of risks or blockages.

How we work at SIH ONE

We help companies design and register the scheme of signatory powers and procurations in a way consistent with governance, risk and legal requirements, and to keep the commercial register always aligned with changes.

Do you want to organise your company’s signatory powers in a secure and efficient way? Discover the services of our corporate division and set up solid representation.