Stock corporation

Legal form intended for large-sized companies with high capital requirements, but also popular among smaller companies. Managed by a board of directors, which is elected by the general meeting of shareholders. The articles of incorporation may limit the transferability of a company’s shares.

This is an overview of certain aspects of Swiss corporate law as of the date hereof which does not purport to be comprehensive, and may not be relied upon as legal or other advice or in any other way.

Stock corporation (Aktiengesellschaft, AG / Société Anonyme, SA)

• Unlimited number of shareholders allowed but at least 1 founder (individual or legal entity)

• The stock corporation has sole liability for its debts and liabilities

  Taxed on its earnings at a corporate level and shareholders are taxed on any distributed dividends

• Board of directors is the managing body and has the authority to represent the stock corporation with respect to third parties. The day-to-day management may be delegated to third parties by respective board resolution and enacting of organizational by-laws and

• Annual audit report required (waiver possible for small companies).

Limited liability company (Gesellschaft mit beschränkter Haftung, GmbH / Société à Responsabilité Limitée, SARL)

• Unlimited number of quotaholders allowed but at least one founder (individual or legal entity).

• The limited liability company has sole liability for its debts and liabilities, although articles of incorporation may impose obligation to pay in additional capital.

• Taxed on its earnings at a corporate level and quotaholders are taxed on any distributed dividends.

• In absence of any rules to the contrary, the management is delegated to all partners.

• Generally, annual audit report required (waiver possible for small companies).

• Legal form intended for small and medium-sized companies.

Stock corporation

Minimum stated capital of CHF100,000 (or an equivalent amount denominated in a foreign currency that is of importance for the business activity). When issuing registered shares, 20 percent of the share capital, but minimum of CHF50,000 (or, if the share capital is denominated in a foreign currency, an amount equivalent to CHF50,000 in the foreign currency) must be paid-in at the time of incorporation.

Stock corporation

Shareholders of a stock corporation are generally not liable for any debt or liability of a corporation, except for the payment of share price.

Stock corporation

A stock corporation is taxed at 2 levels (so-called economic double taxation). First, the stock corporation pays a corporate tax on its corporate income; when the stock corporation distributes profits to shareholders, they pay income tax on those dividends. Capital tax is only levied on a cantonal and communal level.

Stock corporation

Incorporation meeting with the notary public; filing of the incorporation documents with the commercial register; registration of the stock corporation in the commercial register.

Stock corporation

Well regarded and widely used; more than 48 percent of the companies in Switzerland are organized as stock corporations.

Stock corporation

Required to hold annual general meeting of shareholders to vote on certain items, such as election of directors. The general meeting may be replaced by written resolutions if all shareholders are represented and no shareholder requests an oral deliberation.

Stock corporation

Annual meeting of the board of directors is required.

Stock corporation

Must annually file tax returns with federal and cantonal tax authorities.

Stock corporation

Registration in commercial registry is required.

Stock corporation

No need to change as business expands.

Stock corporation

Where the corporation is dissolved for reasons other than insolvency or a court judgment, the general meeting of shareholders passes a resolution; the board of directors subsequently notifies the dissolution for entry in the commercial register.

Stock corporation

Annual board of directors and general meeting of shareholders; annual report generally consisting of annual accounts and management report.

Stock corporation

If there are several directors, one director must be appointed as chairman. The board of directors appoints a secretary (responsible for protocol of board of directors meeting and other administrative duties; not required to be member of the board or management). No requirement to delegate day-to-day management to officers, but articles of incorporation may authorize the board of directors to do so.

Stock corporation

None required.

Stock corporation

At least 1 director or officer with single signatory power or 2 directors or officers with joint signatory power by 2 must be resident in Switzerland.

Stock corporation

None required, but in absence of local offices, a c/o address is required.

Stock corporation

Requirement to choose a domicile.

Stock corporation

Sufficient for incorporation; however, a written declaration by the holder of the domicile needs to be supplied confirming that they allow the stock corporation to have its domicile at the address stated.

Stock corporation

Possible.

Stock corporation

No restrictions regarding the provision of local director or corporate secretary by law firm or 3rd-party service provider.

Stock corporation

At least 1 director or officer with single signatory power or 2 directors or officers with joint signatory power by 2 must be resident in Switzerland.

Stock corporation

Generally none for nominee directors. In contrast, the stock corporation may (in case of registered shares with restriction of transferability) refuse entry in the share register where the acquirer fails to declare expressly that they have acquired the shares in their own name and for their own account.

Stock corporation

The board of directors is elected by the general meeting of shareholders and is the managing body. It has the authority to represent the stock corporation with respect to third parties and has certain non-transferrable duties that cannot be delegated to officers (eg, overall management, determination of the organization, organization of the accounting, financial control and financial planning systems, appointment, supervision and dismissal of officers and compilation of the annual report). Officers may be appointed by the board of directors to oversee day-to-day operations of the corporation.

Stock corporation

Identity of directors and officers is publicly disclosed; identity of shareholders is generally not publicly disclosed, except for the identity of the first subscribers of shares upon establishment of a stock corporation or in capital increases, and the disclosure obligations pursuant to the Financial Market Infrastructure Act (FMIA) with regard to shares listed on the stock exchange.

Stock corporation

There must be at least one shareholder. No maximum number exists. For directors, the minimum number is one, while there is no maximum number.

Stock corporation

1 shareholder is sufficient.

Stock corporation

The general meeting of shareholders is entitled to dismiss the members of the board of directors.

Stock corporation

None required; any optional officer is allowed, if the board of directors is authorized to delegate powers in the articles of incorporation.

Stock corporation

At least one annual board of directors meeting is required; written resolutions are possible. Minutes need to be kept of the board's discussions and resolutions and signed by the chairman and the secretary.

Stock corporation

For shareholders' meetings, subject to certain decisions that require a qualified majority of 2/3 of the represented voting rights and an absolute majority of the nominal value of represented shares, no attendance quorum applies and resolutions may be taken with simple majority of represented shares. Further, a stock corporation's articles of incorporation may stipulate additional quorum requirements.

For board meetings, subject to a stock corporation's articles of incorporation and/or organizational regulations, no attendance quorum applies and decisions may be taken by simple majority of the cast votes.

Stock corporation

In case of incorporation by cash, it is required to pay in the share capital in cash to a special blocked account to be opened with a Swiss bank before the incorporation meeting.

Stock corporation

Auditors must audit the stock corporation's books annually and submit a report thereon to the board of directors and the shareholders. Waiver of audit is possible for small companies. Generally, the auditor must be located in Switzerland. The stock corporation's books must be kept locally.

Stock corporation

The nominal value of a share must be larger than zero.

Stock corporation

Effectuated by share capital increase (ordinary or conditional) to be reflected in articles of association, which requires a resolution or authorization from the general meeting of shareholders. In addition, the board of directors may be authorized in the articles of association to increase and/or decrease the share capital within a defined bandwidth (so-called capital band).

Stock corporation

Free equity can be repatriated abroad from Switzerland via dividend or redemption. Withholding tax (35 percent) may arise.

Stock corporation

Shares may generally be transferred freely. Board of director’s consent is only needed in case of registered shares and a corresponding provision in the articles of incorporation.

Stock corporation

The business name must indicate the legal form and must be clearly distinct from every other business name of businesses already registered in Switzerland. A reservation of a business name is not possible.

Stock corporation

No general KYC requirements except for financial intermediaries and dealers, as defined in the Swiss Anti-Money Laundering Act.

However, reporting requirements regarding the identity of the owner of bearer shares and regarding the ultimate beneficial owner of shareholders holding more than 25 percent of the voting rights or capital in a stock corporation may apply to unlisted stock corporations.

Stock corporation

Generally, the shareholders' meeting must formally approve a resolution to any amendment to the articles of incorporation.

Stock corporation

In general, no license requirements except for specific sectors such as, for example, banking and insurance.

Stock corporation

Although not uncommon in practice, purchase of a shelf stock corporation and its subsequent reactivation may be held void and involves various and substantial legal and financial risks. It is therefore not advisable under Swiss law.