Forms of Business Organisation

The most frequently used company form is the corporation, the société anonyme (SA)/Aktiengesellschaft (AG). The Swiss limited liability company – the société à responsabilité limitée (SARL)/Gesellschaft mit beschränkter Haftung (GmbH) – is historically less often used as a vehicle for conducting international business, in part because its paid-in capital may not exceed Swfr2m, and the transfer of shares is slightly more cumbersome than with a SA/AG. However, the use of the SARL/GmbH in international business has increased significantly in recent years largely because, unlike the SA/AG, the entity can be disregarded for US tax purposes under the “check-the-box” rules.

Given the usage of the SARL/GmbH as an entity to undertake significant international business operations, various proposed changes to the law are pending (for example, allowing only one person to establish an SARL/GmbH; eliminating the Swfr2m ceiling; and making the obligation to provide audited accounts depend on the size and capital of a company).

The requirements of the main corporate form (SA/AG):

Formation Process

To form a company, the founders must hold an incorporation meeting before a notary public where the articles of incorporation are resolved. The incorporation meeting is documented in a public deed. The company is then registered in the commercial register.

Capital

Minimum Swfr100,000 for a SA/AG. The minimum nominal value of an SA/AG share is Swfr1. At least 20% of each share’s nominal value (or Swfr50,000, whichever is more) must be paid in by the time of the first shareholders’ meeting. Capital may be supplied in non-cash forms (such as real property, machinery, patents and know-how). If the articles of incorporation so stipulate, the founders can be required to make detailed reports to the other shareholders and the auditors must approve the reports.

Before dividends may be distributed, 5% of the annual net profits must be placed in a legal reserve until it reaches 20% of paid-in capital. Thereafter, 10% of any distributed amount that exceeds 5% of paid-in capital must also be placed in the reserve fund. The above amount must be appropriated annually until the reserve equals 50% of authorised and issued capital. (This does not apply to holding companies.)

Founders & Shareholders

For an SA/AG, a minimum of three founding shareholders is required. The founders are not required to be Swiss citizens or residents. After the first shareholders’ meeting, the founders may be replaced.
Board of directors. The majority of the board members must be Swiss citizens, or citizens of an EU or European Free Trade Association (EFTA) member state, and must reside in Switzerland.