SWITZERLAND Law and Practice Contributed by: Yves Klein and Antonia Mottironi, Monfrini Bitton Klein and Ardenter Law
3. Corporate Entities, Ultimate Beneficial Owners and Shareholders 3.1 Imposing Liability for Fraud on to a Corporate Entity Corporate Civil Liability A legal entity may be liable in torts for the acts of individuals. Under Article 55(2) of the Swiss Civil Code (SCC), the governing officers bind the legal entity by concluding transactions and by their other actions. Under Article 55 paragraph 1 SCO, the employer is liable for the damage caused by its employees in the performance of their work unless it proves that it took all due care to avoid damage of this type or that the loss or damage would have occurred even if all due care had been taken. Corporate Criminal Liability On the criminal side, Swiss law provides for two types of criminal corporate liability for Swiss or foreign legal entities: • subsidiary criminal liability if it is not possible to attribute to a specific person a felony or misdemeanour committed within a company due to its inadequate organisation (Article 102 paragraph 1 SPC); and • primary liability with regard to money launder - ing, organised crime and bribery indepen - dently of the criminal liability of individuals if a company did not take all the reasonable and necessary organisational measures to prevent such offences (Article 102 paragraph 2 SPC). 3.2 Claims Against Ultimate Beneficial Owners Swiss private law applies the principle of sepa - rateness of legal entities and good faith is pre - sumed. Only the manifest abuse of a right is sanctioned by law (Article 2 paragraph 2 SCC).
Criminal findings of fraud may enable courts to motivate findings of bad faith but do not suffice to obtain the piercing of the corporate veil. The presence of anti-money laundering forms in banking documentation identifying a legal or natural person as the ultimate beneficial owner of a bank account is not sufficient to demon - strate a manifest abuse of rights. However, according to the principle of transpar - ency, the formal existence of two legally distinct persons cannot be accepted without reservation when all or almost all of the assets of a company belong either directly or through intermediaries to the same person, whether natural or legal. The claimant must demonstrate that despite the legal duality of persons, there are not two independent entities, the company being a mere instrument in the hand of its author, who together form a single economical unit. In accordance with economic reality, there is an identity of persons whenever the fact of invoking the diversity of subjects con - stitutes an abuse of rights or has the effect of manifestly prejudicing legitimate interests. In criminal proceedings, forfeiture of assets (that may then be allocated to the plaintiff) is not per - mitted if a third party has acquired the assets in ignorance of the grounds for forfeiture, provided they have paid adequate consideration therefor or forfeiture would cause them to endure dis - proportionate hardship (Article 70 paragraph 2 SPC). 3.3 Shareholders’ Claims Against Fraudulent Directors Article 754 paragraph 1 SCO provides that the members of the board of directors and all per - sons engaged in the business management or liquidation of the company are liable both to the company and to the individual shareholders
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