Art. 962 par. 1 of the Swiss Code of Obligations states that „whoever is obligated by law to keep books [Art. 957] shall preserve such books, business correspondence and accounting records for a period of ten years".

The consequences of this paragraph are often unclear in practice. The following explanations might serve as a general guideline:

The purpose of the duty to preserve books is to have all information disposable that is relevant to understand and assess the financial standing of the company, the claims and obligations relating to the company’s business-activities and the profits and losses of every single business-year.

The duty to keep documents serves mainly the company’s own interests – on the one hand these documents are an important memory-aid and management tool and, on the other hand they are the main evidence in case of any disputes.

The Swiss Code of Obligations refers to three different types of documents subject to the duty to preserve, namely:

1. Books, e.g. journals, main books, accounting-sheets, annual statements of accounts, balance-sheets, inventories, securities, debtor/creditors;

2. Business correspondence, generally speaking every document that possibly has an effect on the balance-sheet such as e.g. letters, contracts, accounts, delivery notes, receipts, articles of incorporation, articles of organization, public deeds, minutes, records of any law suits, adjudications, documents concerning the employment of staff, correspondence with authorities, relevant telephone notes;

3. Accounting records, i.e. documents which contain basic and detailed information relevant for the accounting such as invoices, bank account statements, etc.

Whenever the question arises whether or not a certain document is subject to the duty to preserve one has to bear in mind the above mentioned purpose. In case of doubt it is recommended to keep a document rather than to dispose of it. It also makes sense to keep certain documents (e.g. tax returns) longer than the requested period of ten years if they possibly have effects or may be needed as evidence thereafter.

The content of this article is intended to provide general information on the subject matter and is not a legal advice. An individual matter requires legal advice according to the specific circumstances.

For further information please contact Dr. Ulrich Benz or Dr. Gaudenz Zindel