The public limited company (SA) is a common legal structure in Switzerland, chosen for its flexibility and the protection it offers its shareholders. In this article, we will examine the SA in the context of Swiss law, addressing points such as its creation, share capital, governance, shareholders’ liability, and the main stages of dissolution. We will also discuss the advantages and disadvantages of this legal structure as well as the main obligations regarding taxation and accounting.
I. Formation of a SA
A. Selection of the legal structure
Before starting a business in Switzerland, it is important to choose the legal structure best suited to your project. The public limited company (SA) is particularly suitable for businesses with growth potential and looking to attract investors, due to the flexibility it offers in terms of capital and transfer of shares.
B. Drafting of the articles of association
The articles of association constitute the founding document of the SA. They must be written and contain mandatory information, such as the company name, registered office, purpose of the company, amount of share capital, number of shares and their nominal value. The articles may also include optional clauses, such as governance rules or specific rights of shareholders.
C. Minimum share capital and contributions in kind
The minimum share capital for a SA in Switzerland is 100,000 CHF, of which at least 50,000 CHF must be released upon creation. Contributions in kind are also possible, subject to independent valuation and specific mention in the articles.
D. Registration formalities
Once the articles have been drafted and signed, the company must be registered in the Commercial Register. This step involves the publication of a notice in the Swiss Official Gazette of Commerce (FOSC) and the provision of various documents, such as the articles, proof of residence for the directors, and an audit report in case of contributions in kind.
II. Share capital and shares
A. Types of shares
The SA can issue different types of shares, such as registered shares (assigned to a specific shareholder) or bearer shares (transferable without formalities). Shares can also have different voting rights or dividends, depending on their category.
B. Nominal value and release of capital
Each share must have a nominal value, which is determined upon the creation of the company and stated in the articles. The share capital must be released in whole or in part, according to legal requirements and statutory provisions.
C. Increase and reduction of capital
The share capital of a SA can be increased or reduced by a decision of the general meeting of shareholders, subject to compliance with certain conditions and procedures. The increase in capital can be achieved by creating new shares, cash or in-kind contributions, or converting reserves. The reduction of capital can be done by reducing the nominal value of the shares, repurchasing shares, or reducing the number of shares.
D. Rights and obligations of shareholders
Shareholders of a SA have the right to participate in general meetings, vote on important decisions, receive dividends, and consult the company’s documents. They are also required to release their contribution to the share capital, in accordance with the articles and legal provisions.
III. Governance of a SA
A. General meeting of shareholders
The general meeting of shareholders is the supreme body of the SA. It meets at least once a year and has main competencies such as approving the annual accounts, appointing directors and the audit body, and amending the articles. Shareholders can also call extraordinary meetings to deal with urgent or important issues.
B. Board of directors
The board of directors is the executive body of the SA, responsible for the management and representation of the company. It is composed of at least one director, who can be a natural or legal person. Directors have legal obligations, such as fidelity, diligence, and loyalty to the company, and can be held responsible in case of management fault.
C. Audit body
The audit body is responsible for reviewing the annual accounts of the SA and verifying their compliance with accounting and legal standards. The appointment of an audit body is mandatory for SAs subject to ordinary audit (depending on size and turnover) and optional for those subject to restricted audit.
D. Daily management and delegation of powers
The board of directors may delegate the daily management of the company to board members or third parties, subject to certain conditions and limitations. The delegation of powers must be provided for in the articles or in an internal organizational regulation.
IV. Liability of shareholders and directors
A. Limitation of shareholders’ liability
The liability of shareholders in a SA is limited to their contribution to the share capital. In case of bankruptcy, they are not required to cover the company’s debts beyond their investment.
B. Liability of directors
The directors of a SA can be held accountable to the company, shareholders, and creditors in case of management fault, violation of the articles or the law. This liability can be joint, meaning that each director can be required to cover the entire damage caused.
C. Sanctions in case of management fault
Directors can be penalized with fines, imprisonment, or professional bans in case of serious fault or fraudulent bankruptcy.
D. Protection of minority shareholders
Swiss law offers certain protections to minority shareholders, such as the right to convene a general meeting, the right to request a special investigation in case of suspicion of irregular management, or the right to oppose decisions that harm their interests.
V. Taxation and accounting
A. Profit and capital tax
SAs are subject to profit and capital tax at the federal and cantonal levels. Rates vary by canton and can be influenced by various factors, such as reserves, undistributed profits, and the value of share capital. Tax relief may be granted for certain activities, such as research and development or investments in specific economic areas.
B. VAT and other taxes
SAs are also subject to value-added tax (VAT) if their turnover exceeds a certain threshold (100,000 CHF). VAT is levied on goods and services provided in Switzerland and must be declared and paid periodically to the tax administration. Other taxes, such as stamp duties or property taxes, may also apply depending on the company’s activities.
C. Accounting obligations and audit
SAs must keep accounting records in accordance with Swiss or international standards (Swiss GAAP FER, IFRS) and present annual accounts including a balance sheet, an income statement, and explanatory notes. The audit of the accounts is mandatory for SAs subject to ordinary audit and optional for those subject to restricted audit.
VI. Dissolution and liquidation of a SA
A. Reasons for dissolution
The dissolution of a SA can occur for various reasons, such as the decision of the general meeting, bankruptcy, merger with another company, or the realization of the statutory purpose.
B. Liquidation procedure
The liquidation of a SA involves the realization of its assets, the payment of its debts, and the distribution of the liquidation surplus (if available) to shareholders. The liquidation procedure is supervised by a liquidator, who can be a director, a third party, or a public body, depending on the circumstances.
C. Distribution of the liquidation surplus
The liquidation surplus is the difference between the realized assets and the debts paid during the liquidation of a SA. It is distributed to shareholders proportionally to their participation in the share capital unless otherwise provided by the articles or the law.