Types of corporations
There are essentially two kinds of company in Switzerland:
- the stock corporation and
- the limited liability company.
The legal structures are similar to those of the German AG/GmbH, the French S.A./S.A.R.L. and the US "limited liability company".
It is also possible to have a branch of a foreign corporation inscribed in the Commercial Register, or to set up a private company which is not a legal entity in its own right.
THE STOCK COMPANY (AG)
The AG is a legal entity in its own right. Its xapital is devided into shares. The shareholders exercise their rights at the General Meeting of Shareholders. The management of the AG is the responsibility of the Board of Directors and the executive officers who are appointed by the Board.
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Share capital
The AG has a share capital of at least CHF 100,000.-. The share capital is divided into bearer and/or registered shares. The nominal value of those shares must be at least CHF 0.01. When establishing the corporation, each share must be paid up to at least 20 % of its nominal value, but the total paid-up share capital must amount to at least CHF 50,000.-.
A part of the share capital can also be issued in the form of so-called participation certificates. Essentially, these are shares without voting rights.
To form an AG it is necessary to have one or more private individuals, legal entities or other corporations, whereas it is irrelevant whether the shareholders are Swiss nationals or foreigners.
The governing bodies of the corporation
The AG has three governing bodies:
- the General Meeting of Shareholders
- the Board of Directors and
- the auditors.
The General Meeting of Shareholders is the supreme governing body of the corporation. It is empowerd to set forth and amend the Articles of Association, approve the annual accounts and consolidated financial statements, resolve on the distribution of profit and grant discharge to the company´s directors. The General Meeting of Shareholders elect the Board of Directors and the auditors. The General Meeting of Shareholders has to be convened at least once per annum (within six months of the financial year-end). Extraordinary general meetings can be called at any time by the Board of Directors, by shareholders who represent at least 10 % of the share capital, or by the auditors.
The management of the AG is the responsibility of the Board of Directors. It can nominate individual members or third parties (directors, proxy holders) to carry out the functions of management.
The Board of Directors consists of one ore more members. They must not be shareholders. At least one member of the Board, with the right to represent the company, or director must be resident in Switzerland.
The auditors ascertain whether the accounts and the annual financial statements and the comsolidated financial statements as well as the recommendation to the General Meeting of Shareholders with regard to the distribution of the profit in the balance sheet conform with the law and the Articles of Association.
Enterprises only need to be audited if they exceed two of the following criteria in two consecutive business years:
- a balance sheet total of CHF 10 million
- a turnover of CHF 20 million
- an average of 50 full-time positions a year.
Enterprises which do not meet these criteria are subject to a limited audit (checking of totals and questioning of the administrative board).
Enterprises with a limited audit and a maximum of ten full-time positions may dispense with an audit position, if all of the shareholders agree with the forgoing of this position.
The audit position must be registered with the Confederate Audit Supervisory Body (www.revisionsaufsichtsbehörde.ch).
The name of the stock corporation may be freely chosen. The name must only differ from previously registered names.
Name check at: www.zu.ch/hta, www.zefix.ch/, www.teledata.ch/.
Trademark check at: http://www.ige.ch/.
The seat of the company may be freely chosen in Switzerland.
LIMITED LIABILITY COMPANY (GmbH)
The GmbH is a legal entity in its own right. To form an GmbH it is necessary to have one or more private individuals, legal entities or other corporations, whereas it is irrelevant whether they are foreigners or Swiss nationals.
At least one person, with the right to represent the company, or director must be resident in Switzerland.
The foundation capital must be at least CHF 20,000.- and will have to be fully paid in. There is no upper legal limit. The minimum nominal value of the shares is CHF 100.00. Shareholders may hold more than one share.
The GmbH have three governing bodies:
- the General Meeting of Partners
- the Management and
- the auditors.
The GmbH is in principle subject to audit. An ordinary audit is required if the company exceeds two of the following amounts in two consecutive business years:
- a balance sheet total of CHF 10 million
- a turnover of CHF 20 million
- an average of 50 full-time positions a year.
If the conditions for an ordinary audit are not met, a limited audit which is less extensive and intensive is required. A limited liability company with no more than ten full-time positions may dispense with the registration of an audit position with the agreement of all of the shareholders.
The commonest form of company in Switzerland is the stock corporation (the ratio of new formations of stock corporations/limited liability companies is 3:1).
BRANCHES OF EU COMPANIES
Under Swiss company law, EU companies can open branches in Switzerland without any restrictions.
The branches:
- have their own legal personality
- take the form of a Swiss incorporated firm
- do not have any share capital corresponding to a Swiss limited liability company/stock corporation
- have liability limited to the share capital of the parent company
- are subject to taxation solely in Switzerland
- benefit from the double taxation agreement of Switzerland
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