In the corporate world, managing official documents and authorizations can often be confusing, especially when it comes to distinguishing between collective and individual signatures, as well as joint and individual procuration. This post will clarify these concepts, so you can ensure your business is operating efficiently and legally.
What is a collective signature?
A collective signature, also known as a joint signature, is typically granted to senior executives, such as board members or managing directors, and allows them to represent the company, but only alongside another authorized signatory. This dual requirement adds a layer of control and responsibility, ensuring that no individual can make unilateral decisions on behalf of the company. In Switzerland, collective signatures must be registered in the Swiss commercial register, where only authorized individuals are listed, following strict legal guidelines to ensure transparency and accountability.
What is an individual signature?
An individual signature grants a single authorized person the power to represent the company independently. This allows for faster decision-making but also requires high levels of trust in the individual’s judgment. Typically, this authority is reserved for owners, shareholders, or high-level executives, giving them broad powers to handle both ordinary and extraordinary business matters. Individual signatures are commonly used when quick decisions are necessary.
Understanding joint procuration
Procuration, a specific form of power of attorney in the business world, can also be collective. Joint procuration allows two or more authorized representatives to act on behalf of the company together. This is common in larger businesses to ensure proper oversight of significant business transactions. However, joint procuration has a somewhat narrower scope than the collective signature. While it covers most business activities, procurators require express authorization to sell or encumber real estate. According to Article 458 of the Swiss Code of Obligations, a registered attorney must have their authority formally entered into the commercial register, although their actions are binding even before the official registration. This distinction reflects the slightly reduced authority of a procurator compared to higher-ranking officers with collective signature rights.
What is individual procuration?
With individual procuration, a person can act independently on behalf of the company, but within the boundaries of the company’s business purposes. Like joint procuration, the sale or encumbrance of real estate requires special authorization. According to Article 462 of the Swiss Code of Obligations, representatives without full procuration can handle everyday business transactions but need explicit authorization to engage in liabilities like loans or legal proceedings. Individual procuration is typically granted to employees or third parties who are not part of the company’s upper management. Procurators signing with individual procuration often use the notation “ppa.” or “per procura” to indicate their representative role.
Here’s a summary of the key differences:
| Aspect | Collective Signature | Individual Signature | Joint Procuration | Individual Procuration |
| Scope of Authority | Full authority to represent the company but only jointly with another signatory. | Full representation of the company independently, including extraordinary transactions. | Requires two procurators to act together, with more limited authority than a collective signature. | Allows an individual to act independently, but with some restrictions (e.g., real estate transactions need special authorization). |
| Granting of Authority | Top-level management (e.g., board members, directors). | Top-level management. | Employees outside top management, such as operational staff. | Non-executive employees or third parties. |
| Legal Registration | Must be registered in the Swiss commercial register. | Must be registered in the Swiss commercial register. | Must be registered in the Swiss commercial register. | Must be registered in the Swiss commercial register. |
Conclusion
Understanding these distinctions is essential for companies seeking to maintain operational efficiency while staying compliant with legal requirements. Whether your company opts for collective or individual signature rights, or joint or individual procuration, the key is ensuring that the chosen structure aligns with your business’s needs and legal obligations. At Hoop, we specialize in simplifying such processes, from digital incorporations to updating company data, in partnership with notaries and fiduciaries.
References:
1. Weka Handelsregister: Rechtliche Praxis und Zeichnungsberechtigungen
2. Swiss Code of Obligations – Article 462
3. Swiss Code of Obligations – Article 458
4. Swiss Code of Obligations – Article 459
This blog article does not constitute legal advice, it is made available “as is” and makes no claim to completeness or accuracy. Hoop makes no warranty or liability as to its content. This is excluded to the extent permitted by law. Use is at your own risk. Legal advice is recommended if necessary.
Leave a Reply