The advance care directive: who runs your company if you no longer can?

What happens to your company if tomorrow you are lying in hospital after an accident and cannot be reached for weeks? Who signs contracts, who approves payments, who talks to the bank? If you cannot answer this question immediately, you are missing an advance care directive (Vorsorgeauftrag).

What the advance care directive covers

With an advance care directive (Art. 360 et seq. CC, Swiss Civil Code) you determine who acts on your behalf should you become incapable of judgement. It can cover three areas: personal care, asset management and representation in legal matters. For entrepreneurs, the last area is decisive. You can appoint a person you trust to exercise your rights as a shareholder or partner, attend general meetings and elect the board of directors.

Without an advance care directive, the child and adult protection authority (KESB) examines whether a deputyship is necessary. That takes time, and the authority decides according to its criteria, not yours. Spouses have a statutory right of representation, but it is limited to ordinary needs. It is not sufficient to run a company.

The form

The advance care directive must either be entirely handwritten, dated and signed, or notarised as a public deed. For entrepreneurs, notarisation is recommended: it allows a detailed text with clear instructions, and the document is less open to challenge. The place where it is kept can be registered with the civil registry office so that it can be found in an emergency.

The interplay with the company

The advance care directive alone is not enough. The company needs the matching arrangements: who has signatory authority if the owner is unavailable? Is there a second board member? Does the shareholders' agreement cover the case of a partner becoming incapable of judgement? These points are best cleaned up together with the advance care directive. Then the company remains able to act in every situation.

What you can do now

Consider whom you would entrust with your representation, and talk to that person. Check the signatory authorities in the commercial register. And have the advance care directive aligned with your marital and inheritance contract so that all documents pursue the same goal.