The AG is a widespread legal form in Switzerland, due to its flexibility and the protection it offers its shareholders.
This article will take a comprehensive look at the AG in the context of Swiss law, covering issues such as its creation, share capital, governance, shareholder liability and the main stages of dissolution.
We will also discuss the advantages and disadvantages of this legal form, as well as the main tax and accounting obligations associated with it.
Before setting up a business in Switzerland, it’s crucial to select the most appropriate legal form for your project.
The public limited company (AG) is ideal for companies with growth potential looking to attract investors, thanks to its flexibility in terms of capital and share transfer.
The Articles of Association are the essential founding document of a public limited company, and must be drawn up in writing.
They include mandatory information such as the company name, registered office, corporate purpose, amount of share capital, number of shares and par value.
In addition, the bylaws may contain optional clauses, such as governance rules or specific shareholder rights.
In Switzerland, a public limited company must have a minimum share capital of CHF 100,000, of which at least CHF 50,000 must be paid up at the time of formation.
It is also possible to make contributions in kind, but these must be independently valued and specifically mentioned in the articles of association.
Once the Articles of Association have been drawn up and signed, the company must be registered with the Commercial Register.
This involves publication of a notice in the Swiss Official Gazette of Commerce (SOGC), and submission of various documents such as the Articles of Association, proof of domicile for directors, and an audit report in the case of contributions in kind.
SAs can issue various types of shares, including registered shares (allocated to a specific shareholder) and bearer shares (transferable without formalities).
Shares may also carry separate voting or dividend rights, depending on their class.
When a public limited company is set up, each share must have a specific par value, as specified in the articles of association.
The share capital must be paid up in full or in part, in accordance with legal requirements and the provisions of the articles of association.
The General Meeting of Shareholders may decide to increase or reduce the share capital of a public limited company, subject to compliance with certain conditions and procedures.
Capital may be increased by issuing new shares, making cash or in-kind contributions, or converting reserves.
Capital may be reduced by reducing the par value of shares, buying back shares or reducing the number of shares.
Holders of shares in a Swiss AG are entitled to various rights, such as the right to attend general meetings, vote on important issues, receive dividends and have access to company documents.
They are also subject to the obligation to pay up their contribution to the share capital, in accordance with the Articles of Association and applicable regulations.
The General Meeting of Shareholders is the supreme decision-making body of a public limited company.
It meets at least once a year, and its main responsibilities include approving the annual financial statements, appointing directors and auditors, and amending the Articles of Association.
Shareholders may also convene extraordinary meetings to deal with urgent or important matters.
The Board of Directors is responsible for the day-to-day management and representation of the company.
It is made up of at least one director, who may be a natural or legal person.
Directors have legal obligations, such as loyalty, diligence and fidelity to the company, and may be held liable in the event of mismanagement.
The auditor’s task is to verify that the company’s annual financial statements comply with legal and accounting standards.
The appointment of an auditor is compulsory for public limited companies subject to ordinary auditing, depending on their size and sales, while it is optional for public limited companies subject to restricted auditing.
It is possible for the Board of Directors to delegate the day-to-day management of the AG to third parties or to individual Board members, provided certain conditions and limits are met.
Delegation of authority must be clearly set out in the Articles of Association or in internal organizational regulations.
Shareholders in a public limited company are subject to limited liability, which is limited to their contribution to the share capital.
Consequently, in the event of the company’s bankruptcy, they are not obliged to repay the company’s debts beyond their initial contribution.
Directors of a public limited company may be held liable to the company, shareholders and creditors for breaches of the articles of association, the law or mismanagement.
This liability may be joint and several, meaning that each director may be required to make good all the damage caused.
Directors can face sanctions in the form of fines, custodial sentences or professional bans in the event of reprehensible behavior, such as gross misconduct or fraudulent bankruptcy.
Swiss law provides for a number of protective measures for minority shareholders, such as the right to call a shareholders’ meeting, to request a special investigation in the event of suspicions of irregular management, or to oppose decisions that could harm their interests.
Public limited companies (AGs) are subject to federal and cantonal income and capital taxes in Switzerland.
Tax rates vary from canton to canton, and can be affected by factors such as reserves, retained earnings and the value of share capital.
Tax incentives may be granted for certain activities, such as research and development or investments in specific economic zones.
Public limited companies are subject to value-added tax (VAT) if their sales exceed a certain threshold (CHF 100,000).
VAT is levied on goods and services supplied in Switzerland, and must be declared and paid periodically to the tax authorities.
Depending on the company’s activities, other taxes such as stamp duty or property tax may also apply.
Public limited companies are required to follow Swiss or international accounting standards (Swiss GAAP FER, IFRS) and to prepare annual financial statements, which include a balance sheet, income statement and explanatory notes.
Auditing is compulsory for public limited companies subject to ordinary audit, and optional for those subject to restricted audit.
A public limited company may be dissolved for a variety of reasons, including bankruptcy, merger with another company, achievement of its statutory purpose, or a decision taken at the Annual General Meeting.
Liquidation of a public limited company involves liquidating the company’s assets, settling its debts and distributing the liquidation surplus (if available) to shareholders.
This procedure is managed by a liquidator, who may be a director, a third party or a public body, depending on the circumstances.
The liquidation surplus is the amount remaining after the sale of assets and payment of debts when a public limited company is wound up.
It is distributed to shareholders in proportion to their stake in the company’s capital, unless the articles of association or the law provide otherwise.
The AG is an attractive legal structure for entrepreneurs in Switzerland, due to the protection it offers shareholders and its flexibility in terms of management and financing.
However, it also entails significant legal and administrative obligations in terms of governance and accounting.
It is therefore essential to fully understand the legal and tax implications before setting up an SA, and to consult a competent professional for appropriate advice and support throughout the process of creating and managing the company.
By complying with legal and regulatory requirements, entrepreneurs can take full advantage of the benefits offered by the SA in Switzerland.
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