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🏛️ The central role of the administrator in corporate governance

In any Andorran company, the administrator is the person responsible for directing, representing, and ensuring the proper legal and economic functioning of the business. The capital companies law defines in detail what an administrator may do, what limits apply, which obligations must be fulfilled, and what liability arises if they act negligently.

In both public limited companies (SA) and limited liability companies (SL), the administrator is the core of corporate governance. Their performance makes the difference between safe management and unnecessary legal risk.

⚙️ Administration structures permitted in Andorra

The law allows several administration models, which must always be defined in the articles of association. Choosing the right structure influences management efficiency, distribution of power, and decision-making security.

The permitted options include:

• Sole administrator
• Joint administrators (mancomunados)
• Joint and several administrators (solidarios)
• Board of directors (more common in SAs, but also possible in SLs if the articles allow it)

Once the model has been chosen, the articles must specify how representation is exercised and what powers each administrator has, although in most cases these limits are internal-management rules rather than restrictions enforceable against third parties.

🧭 Appointment of the administrator: essential rules

The appointment of the administrator is not a minor formality. Its validity and registration determine the effectiveness of all corporate acts.

📌 Who appoints the administrator

The general meeting —the shareholders— is responsible for the appointment.
In the incorporation process, administrators are appointed directly in the deed of formation, although they may be replaced at any time.

➤ If you want to know the full incorporation process, you can consult Incorporating a Company in Andorra: Steps, Requirements and Key Advantages

📌 Duration of the mandate

The law allows for a fixed-term or indefinite mandate.
If the articles do not establish a term, the mandate is deemed indefinite and remains valid until a decision states otherwise.

📌 Requirements to act as administrator

Any of the following may serve as administrator of an Andorran company:

• A natural person
• A legal person (which must designate a natural person as its representative)

In all cases, the administrator must not be legally disqualified from holding such office.

📌 Acceptance of the position

Acceptance must be formalised in a public deed or in a separate written document notified to the company.

From that moment on, the appointment must be registered at the Companies Registry to be enforceable against third parties.

In other words, an administrator ceases to hold office from the moment the cessation becomes effective — not before.

📄 Functions of the administrator: what the law requires

The administrator must act within the framework set by the articles of association and the capital companies law. Their functions combine representation, management, and regulatory compliance.

The most relevant include:

• Representing the company before any third party
• Managing the company’s economic activity and directing the execution of its corporate purpose
• Calling the general meeting when necessary or legally required
• Preparing the annual accounts and submitting them for approval
• Safeguarding accounting and corporate documentation

➤ You can learn more in Accounting in Andorra: origin and structure of the General Accounting Plan (PGC).

• Keeping company registers (shareholders, partners, minutes) up to date
• Implementing decisions adopted by the general meeting
• Ensuring compliance with tax, commercial, labour, and AML obligations

This is a position that demands judgement, prudence, and a high level of diligence.

🛡️ Duties of the administrator: diligence and loyalty

The law establishes two key principles that must guide every action of the administrator.

🟦 Duty of diligence

Act as an orderly, prudent, and responsible manager.
Monitor business performance, anticipate risks, and act in the company’s best interest.

🟪 Duty of loyalty

The administrator must act without conflicts of interest and must not exploit corporate opportunities for personal gain.
They must preserve confidentiality, avoid competing with the company, and refrain from intervening whenever their interests may interfere with those of the business.

⚠️ Administrator liability: a real area of risk

Administrator liability is one of the most sensitive areas of Andorran corporate law. When administrators act negligently, unlawfully, or against the articles, they may be held personally liable.

Types of liability

• Corporate liability: for damage caused to the company, shareholders, or third parties
• Joint liability: when several administrators take collective decisions
• Liability for company debts: in serious cases of mismanagement or breach of essential obligations
• Criminal liability: in cases such as disloyal management, fraud, or money laundering

Common risk scenarios

• Failing to prepare or file annual accounts
• Failing to keep corporate registers up to date
• Failing to file for insolvency when required
• Carrying out operations to the detriment of shareholders or creditors
• Breaching tax or regulatory obligations
• Using the administrator role to act illegally or fraudulently

Liability toward third parties

To third parties, the administrator (or the administration body) is the company’s highest representative.
They are the person empowered to sign contracts, represent the company, open bank accounts, and more.

There are also intermediate figures: attorneys-in-fact (apoderados).
When considered appropriate, the administration body may delegate part of its functions or responsibilities to third parties.

Examples include:

• A power of attorney for banking operations
• A power of attorney to sign contracts
• A power of attorney to transfer assets

💰 Administrator remuneration

The administrator’s position may be unpaid or remunerated. Andorran law allows both options, and the articles determine the economic conditions.

If remuneration is paid without being properly authorised in the articles, it will not be tax-deductible for the company.

➤ If you want to learn more about corporate taxation, see Corporate income tax in Andorra: types, special regimes and tax deductions.

Beyond their corporate duties, an administrator may also perform separate or complementary professional services. It is not an exclusive role.

➤ If you want to know more about how to remunerate shareholders and administrators legally and efficiently, you can consult our specialised article.

🏢 Social security contributions in Andorra

Administrators are not necessarily required to contribute to Andorra’s social security system (CASS), although in practice it is the most common scenario.

As a rule, administrators must contribute whenever they receive remuneration and exercise real managerial duties.

➤ You can find more information in Social security contributions for self-employed workers in Andorra: reduced regimes and general obligations.

🔄 Removal, dismissal and resignation of the administrator

🟦 Removal or dismissal

The administrator may be removed at any time by the general meeting.
No justification is needed unless the articles provide otherwise.

🟪 Resignation of the administrator

The administrator may resign by written notice addressed to the company.
The resignation only takes effect when:

• The general meeting appoints a replacement, or
• It is formalised before a notary and notified to the company

This rule prevents any power vacuum that would render the company ungovernable.

🟥 Mandatory registration

Both the removal and the new appointment must be registered at the Companies Registry. Without registration, changes are not enforceable against third parties.

🧠 Good practices for administrators in Andorra

Experience shows that good governance reduces risks and strengthens the business project. Essential recommendations include:

• Keeping all corporate documentation up to date
• Preparing and filing annual accounts on time
• Documenting important decisions through minutes
• Avoiding conflicts of interest
• Seeking professional advice in situations of legal risk
• Ensuring compliance with tax, commercial, and AML obligations
• Maintaining clear communication with the other shareholders

➤ To understand which type of company may fit your project better, you can consult SA or SL company in Andorra: real differences and how to choose the right structure.

Conclusion

The administrator is the cornerstone of corporate governance in Andorra.
The law grants broad powers but also imposes significant responsibility. An informed, prudent, and socially aligned administration is a guarantee of legal certainty and stability for any company.

Therefore, being an administrator should never be taken lightly.

📞 Need help?

If you need assistance appointing administrators, reviewing your company’s structure, determining the most suitable governance body, or understanding the consequences of each decision, you can contact us through our form.

You may also book your personalised meeting in the below part of this article. For us, it will be a pleasure to assist you.

Last updated: November 2025