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A trustee family business trust arrangement starts with one plain question: when the shareholders meet, who actually votes the shares? Once a founder places a company in trust, the trustee holds legal title and must decide how that title is used. The answer shapes how the business is run, who sits on its board and when family members receive money.
This page explains what a trustee in Switzerland must understand about an operating company, and what the service covers. It is general information, not advice: the right set-up depends on your residence, the beneficiaries and the nature of the business.
Why a company in trust is different from a portfolio
A trustee holding listed securities mainly manages and reports. A trustee holding shares in a family company also inherits a business with employees, lenders, partners and a culture. The Hague Convention on trusts describes the trustee as someone who holds assets under their control, in their own name, for beneficiaries or a stated purpose, and who must administer them and account for them. For a company, that means answering for business decisions as well as for investments.
That is why trustees who hold a business ask questions a portfolio trustee never would. How does the company make money? Who runs it day to day? What happens if the managing director leaves? Our guide on what a trustee owes the beneficiaries sets out the underlying duties.
Who votes the shares?
The trustee, in principle. Title sits in the trustee's name, so the trustee exercises the votes. The Convention is clear, however, that powers reserved by the settlor do not stop a trust from existing. In practice a trust deed often keeps certain decisions with the settlor, a protector or a family committee.
Many structures place a holding company between the trust and the business. The trust owns the holding company, and the holding company owns the operating company. This can simplify voting, separate risks and give the trustee a board of its own to work through.
Each layer needs a clear owner of decisions. If nobody can say who votes at the next shareholder meeting, that is a warning sign worth addressing before the meeting.
Reserved matters, board seats and dividends
Three subjects come up in almost every business holding trust.
Reserved matters
Reserved matters are decisions the trustee will not take alone: selling the company, issuing new shares, changing the articles, borrowing heavily or replacing the chief executive. They may sit with the settlor, the protector or a family council. The trust deed should say which, and the trustee needs a written process for each. Working with a protector covers how those consent powers work in daily practice.
Board seats
A trustee can appoint directors, sit on the board or leave management entirely to professionals and monitor them. Each choice has consequences. A trustee on the board is closer to the facts but more exposed to business liability. A trustee off the board relies on reporting and needs the right to receive it.
Dividends
Dividends flow up to the holding company or trust and then become a distribution decision. The trustee weighs the company's need to reinvest against beneficiaries' expectations. In a discretionary trust the trustee decides; in other trusts the deed may set the answer. See the trustee of a discretionary trust for how that discretion is exercised.
| Question | Trustee votes alone | Trustee votes with consent |
|---|---|---|
| Routine shareholder resolutions | Usual | Rare |
| Sale of the company | Seldom | Common |
| Appointing the chief executive | Depends on the deed | Common |
| Dividend policy | Often | Sometimes |
Example: a founder stepping back
Example: a founder in Lausanne has run a manufacturing company for decades and wants to step back without losing the business to a quarrel among her three children. One child works in the company; the other two do not.
She places her shares in a trust under a holding company. The trustee keeps voting rights, while a family council has consent over a sale. A shareholder agreement sets how the operating company's board is formed. The working child is paid a market salary as a manager, not through the trust, and the other two receive distributions at the trustee's discretion. Ownership and management are separate, and the founder keeps a voice through reserved powers rather than by running things herself.
This is an illustration only. A real set-up would also test the rules on forced heirship: since the 2023 revision of Swiss succession law, the reserved portion is one half of the statutory share under Article 471 of the Civil Code, and Article 15 of the Hague Convention preserves mandatory succession rules. That analysis is individual.
What the service covers
For a business holding trust, the service typically includes:
- holding shares in one or more operating companies, directly or through a holding company;
- separating ownership from management, with clear lines between trustee, board and executives;
- succession planning for the founder, including who leads next and who decides;
- reviewing shareholder agreements and voting arrangements so they match the trust deed;
- supervising the holding company beneath the trust, including its directors and records.
It also touches day-to-day trust administration and, where family members disagree, trustee support for family meetings. Where a sale is coming, read about the founder selling the business.
What it does not cover
The trustee does not run your company, replace its management or give business strategy. The service does not compare countries or give tax advice for your country of residence; those answers depend on where you and the beneficiaries live. Property held by the company is covered separately in trustee duties when the trust owns property.
What the confidential assessment establishes
An assessment sets out, for your situation: who currently controls the votes, what the deed says about reserved matters, whether a holding company is needed, and where the trustee would need information from management. It also tests whether the trustee's duties fit your business. Fees depend on the structure and are indicated after the confidential assessment.
Frequently asked questions
Can I keep control of my company after placing it in a trust?
You can keep certain powers, such as consent over a sale, without defeating the trust. The Convention accepts reserved powers. Too much retained control can create other problems, so the balance needs individual analysis. See settlor reserved powers.
Does the trustee sit on the company board?
It depends on the deed and the business. Some trustees take a seat; others appoint directors and rely on reports. Each approach carries different exposure.
Who decides on dividends?
In a discretionary trust the trustee does, weighing the company's needs against beneficiaries' interests. In other trusts the deed may fix the outcome.
What if the managing director leaves?
The trustee should have a continuity plan agreed in advance, including who may appoint a successor. Reserved matters often cover this decision.
Is a holding company necessary?
Not always. It often helps with voting, risk separation and record-keeping, but it adds a layer to administer. The answer depends on the business.
Does Swiss succession law affect a business trust?
It can. Mandatory succession rules, including the reserved portion, may apply to what a founder transfers. This is an individual question.
Sources
Considering a trust, or reviewing one?
Describe your situation in a few lines. A Geneva-based trustee reviews it in confidence and replies in writing.