Formation of a SA
Choosing the legal form
Selecting the right legal form is crucial when starting a business in Switzerland. The Public Limited Company (SA) is especially suited for growth-oriented businesses seeking investor flexibility.
Drafting the bylaws
The bylaws are the constitutive document of an SA. They must be in writing and include mandatory information like company name, headquarters, business purpose, capital, number and nominal value of shares. Optional provisions like governance rules or specific shareholder rights can also be included.
Minimum capital and in-kind contributions
The minimum capital for a Swiss SA is CHF 100,000, with at least CHF 50,000 paid up at formation. In-kind contributions are possible, subject to independent evaluation and specific mention in the bylaws.
After drafting and signing the bylaws, the company must register with the Commercial Registry. This includes publishing a notice in the Swiss Official Gazette of Commerce and submitting various documents such as bylaws, proof of domicile for directors, and an audit report for in-kind contributions.
Capital and shares
Types of shares
An SA can issue various share types, like registered shares (assigned to specific shareholders) or bearer shares (transferable without formalities). Shares can have different voting rights or dividends.
Nominal value and capital release
Each share must have a nominal value, set at formation and stated in the bylaws. Capital must be released fully or partially, as per legal requirements and statutory provisions.
Capital increase and reduction
Shareholders’ meetings can decide to increase or reduce the capital, following specific conditions and procedures. Increases can be through new shares, cash or in-kind contributions, or reserves conversion. Reductions can be by reducing share nominal value, share buybacks, or reducing the number of shares.
Rights and obligations of shareholders
Shareholders have rights to attend general meetings, vote on key decisions, receive dividends, and access corporate documents. They must also pay their share capital contributions as per the bylaws and legal provisions.
Governance of an SA
General shareholders’ meeting
The shareholders’ meeting is the SA’s supreme body. It convenes annually for approving financial statements, electing directors and auditors, and amending bylaws. Extraordinary meetings can be called for urgent or significant issues.
Board of directors
The board is the SA’s executive organ, responsible for management and representation. It must have at least one director, who can be an individual or a legal entity. Directors have legal obligations like loyalty, diligence, and must act in the company’s best interests.
The audit body checks the annual accounts for compliance with accounting standards and laws. An auditor is mandatory for companies under ordinary audit and optional for those under restricted audit.
Daily management and delegation of powers
The board can delegate daily management to board members or third parties, within statutory or internal regulatory limits.
Liability of shareholders and directors
Limitation of shareholders’ liability
Shareholders’ liability in an SA is limited to their capital contribution. In bankruptcy, they are not required to cover the company’s debts beyond their investment.
Directors can be liable to the company, shareholders, and creditors for mismanagement, bylaw or legal violations. This can be joint liability, meaning each director can cover all damages caused.
Penalties for mismanagement
Directors may face fines, imprisonment, or professional bans for severe misconduct or fraudulent bankruptcy.
Protection of minority shareholders
Swiss law protects minority shareholders, granting rights like calling general meetings, requesting special investigations, or opposing decisions that harm their interests.
Taxation and accounting
Corporate income and capital taxes
SAs are subject to income and capital taxes at federal and cantonal levels, with rates varying by canton. Tax relief may be available for certain activities like R&D or investments in specific economic zones.
VAT and other taxes
SAs are subject to VAT if their turnover exceeds CHF 100,000. VAT on goods and services in Switzerland must be declared and paid regularly. Other taxes like stamp duty or property taxes may apply depending on the company’s activities.
Accounting obligations and audit
SAs must keep accounts as per Swiss or international standards and present annual financial statements, including a balance sheet, income statement, and explanatory notes. Auditing is mandatory for companies under ordinary audit and optional for those under restricted audit.
Dissolution and liquidation of an SA
Reasons for dissolution
Dissolution of an SA can occur due to a shareholders’ decision, bankruptcy, merger, or fulfillment of statutory purpose.
Liquidation involves asset realization, debt payment, and distribution of any remaining assets to shareholders. A liquidator oversees the process, who can be a director, a third party, or a public entity.
Distribution of liquidation surplus
The liquidation surplus is distributed to shareholders based on their capital share, unless otherwise stated in the bylaws or law.
The SA offers an attractive legal form for entrepreneurs in Switzerland, with shareholder protection and management flexibility. However, it also entails significant legal and administrative obligations, especially in governance and accounting. Thorough understanding of legal and tax implications is essential, and professional guidance is advised when setting up an SA.