Corporation (SA/AG)

The AG is a legal entity in its own right with its own name. The corporation’s capital is divided into shares. The owners of the shares (the shareholders) exercise their rights at the General Meeting of Shareholders. Actual management of the AG is the exclusive responsibility of the Board of Directors and the executive officers who are appointed by the Board. The text of the Limited Company Law is available under www.admin.ch/ch/e/rs/c220.html (art. 620 et seq. CO).

Share capital

Share capital, bearer and registered shares

An AG requires a share capital of at least CHF 100,000

The share capital can be 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.

Participation certificates

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 one or more private individuals or legal entities are required. If the shareholders are private individuals, it is irrelevant from the point of view of Swiss corporate law whether they are Swiss nationals or foreigners. On the other hand, a new formation can become somewhat more complicated if one or more of the founding shareholders are foreign companies. It is therefore advisable either to authorize private individuals by proxy to set up the company or – after incorporation by private individuals – to transfer the shares to a foreign company.

The governing bodies of the corporation.

The AG has three governing bodies: the General Meeting of Shareholders, the Board of Directors and the auditors.

General meeting of the supreme governing body and shareholders is in particular empowered to set forth and amend the Articles of Association, approve the annual accounts and the consolidated financial statements, if any, resolve on the distribution of profit and grant discharge to the company’s directors. The General Meeting of Shareholders elects the Board of Directors and the auditors if not dispensed with pursuant to art. 727article of the Code of Obligations.

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.

Board of Directors

The Board of Directors is the management body of the AG. The law confers it with untransferable and inalienable duties (e.g. overall management of the company, definition of the management structure, control of employees entrusted with management functions, preparation of the annual report, etc.). If it so wishes, the board can, by means of internal organizational regulations and based on corresponding articles of association nominate individual members (delegates) or third parties (managers, authorized clerks) to carry out those functions of management which can be delegated.

The Board of Directors consists of one or more members. There is no requirement for a board member to be a shareholder. The corporation must be capable of acting in Switzerland and therefore be represented by a person residing in Switzerland with sole signatory power. This person can be a member of the board or a managing Director.

Auditors

The responsibility of the auditors is to ascertain whether the accounts and the annual financial statements and the consolidated financial statements, if any, 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 Article of Association.

An ordinary audit is required if the corporation exceeds two of the following variables within two consecutive fiscal years: balance sheet total of 10 million Swiss francs, a turnover of 20 million Swiss francs, a yearly average of 50 full time positions. In case the preconditions for an ordinary audit are not fulfilled a limited audit is required. The limited audit is less extensive and profound (“review”). With the consent of all shareholders a company with less than ten full-time positions upon which a limited audit would be applicable may abstain from an audit. The audit firm needs to be registered with the Federal Supervisory Authority of Audit Firms in Bern (www.revisionsauf-sichtsbehoerde.ch).