Swiss corporate law, governed primarily by the Code of Obligations (CO, art. 530 et seq. for simple partnerships and art. 552 et seq. for commercial companies) and by the Federal Act on Mergers (Merger Act), provides a robust and flexible framework for businesses operating in or from Switzerland. Following the significant reform of SA law that came into force on 1 January 2023, Swiss corporate law has been modernised, with enhanced rules on gender equality in listed companies, improved minority shareholder protections and strengthened rules on related party transactions. PBM Avocats advises founders, shareholders, directors and investors on all corporate law matters from our offices in Geneva and Lausanne.
Incorporation and Choice of Corporate Form
Switzerland offers several corporate forms suited to different business needs. The two most common are the public limited company (société anonyme, SA) and the limited liability company (société à responsabilité limitée, Sàrl). The SA is characterised by freely transferable shares, strong separation between management and shareholders, and a relatively high minimum capital requirement (CHF 100,000). The Sàrl is simpler to administer, with lower minimum capital (CHF 20,000) but restrictions on the transferability of participations.
Incorporation requires preparation of the articles of association, execution before a notary, payment of the minimum capital into a blocked account, and registration with the Commercial Register. PBM Avocats guides founders through every step of the incorporation process, from structuring advice and drafting constitutional documents to liaising with the notary and Commercial Register, and advising on the most appropriate corporate form given the shareholders' objectives, planned activities and tax considerations.
Corporate Governance and Directors' Duties
Under Swiss law, the board of directors of an SA bears collective responsibility for the management and supervision of the company. The 2023 SA reform introduced stricter rules: the board must now meet at least once a year, maintain adequate financial planning, and conduct a risk assessment. Certain non-delegable powers remain with the board at all times (art. 716a CO), including the ultimate direction of the company, the appointment of senior management and the organisation of accounting and financial controls.
Directors may incur personal liability under art. 754 CO for breaches of their duties causing loss to the company, shareholders or creditors, provided causation and fault are established. PBM Avocats advises directors and board members on their duties, on D&O insurance, and represents them in liability proceedings, including in the context of insolvency.
Mergers, Acquisitions and Restructuring
Swiss M&A transactions are governed by the Merger Act (Federal Act on Mergers, Demergers, Transformations and Asset Transfers) and, for listed companies, by the rules of the SIX Swiss Exchange and the Swiss Takeover Board. PBM Avocats assists buyers and sellers in structuring acquisitions (share deal vs asset deal), conducting legal due diligence, drafting and negotiating transaction documents (letter of intent, share purchase agreement, representations and warranties), and managing the closing process.
For restructurings and reorganisations — mergers between group companies, demergers, conversions of legal form — PBM Avocats coordinates the legal, tax and accounting aspects, ensuring that the operation complies with the Merger Act procedures and does not trigger unintended tax consequences.
Shareholder Disputes and Minority Rights
Disputes between shareholders are among the most complex and sensitive matters in corporate law. Swiss law provides minority shareholders with a range of protective rights: the right to inspect the books and records (art. 697 CO), the right to request a special audit (art. 697a CO), the right to challenge shareholder meeting resolutions (art. 706 CO), and the right to bring a derivative action on behalf of the company (art. 756 CO). The 2023 SA reform has reinforced these protections.
PBM Avocats represents majority and minority shareholders in disputes concerning the exercise of these rights, the validity of resolutions, dividend entitlements, and the enforceability of shareholder agreements. We also advise on exit mechanisms and, where disputes cannot be resolved amicably, on arbitration and litigation strategy.
Frequently Asked Questions about Corporate Law
What is the minimum capital requirement to incorporate a company in Switzerland?
For a public limited company (SA / Aktiengesellschaft), the minimum share capital is CHF 100,000, of which at least CHF 50,000 (or 20% of the total) must be paid up at the time of incorporation (art. 621 and 632 CO). For a limited liability company (Sàrl / GmbH), the minimum capital is CHF 20,000, which must be fully paid up (art. 773 CO). Both forms require registration in the Commercial Register (registre du commerce). Nominal values per share are freely determined, but may not be less than one centime.
What are the directors' duties in a Swiss SA?
The board of directors of a Swiss SA is collectively responsible for the management and supervision of the company and must carry out its duties with due diligence and in the best interests of the company (art. 717 CO). Non-delegable duties of the board include the ultimate direction of the company, the appointment and removal of senior management, high-level financial oversight, and notification of the judge in the event of over-indebtedness (art. 725b CO). Directors may be personally liable for breaches of their duties causing loss to the company, shareholders or creditors (art. 754 CO).
How can a company be restructured under Swiss law?
The Federal Act on Mergers, Demergers, Transformations and Asset Transfers (Merger Act / LFus) governs corporate restructurings in Switzerland. It provides for four main operations: merger (fusion), demerger (scission), transformation (conversion of legal form) and asset transfer. Each operation requires compliance with specific procedural requirements, including approval by the shareholders' meeting, an auditor's report, notification to creditors and registration in the Commercial Register. The Merger Act also provides for cross-border restructurings, though the rules on international mergers are complex and require specialist advice.
What is over-indebtedness and what obligations does it trigger?
A company is over-indebted (art. 725b CO) when, based on both going concern and liquidation values, its liabilities exceed its assets. Once the board has reason to suspect over-indebtedness, it must have an interim balance sheet drawn up and submit it to a licensed auditor. If both balance sheets show over-indebtedness, the board must notify the competent court, unless certain creditors agree to subordinate their claims sufficiently to eliminate the over-indebtedness. Failure by the board to comply with these obligations may engage personal liability under art. 754 CO.
What are the main types of shareholder agreements used in Switzerland?
Shareholder agreements (pactes d'actionnaires / Aktionärbindungsverträge) are private contracts between shareholders that supplement the articles of association. Common provisions include: pre-emption rights on share transfers (right of first refusal), tag-along and drag-along rights in the event of a sale, lock-up periods, non-competition obligations, and governance arrangements (reserved matters, board composition, veto rights). Such agreements are binding only between the signatories and do not bind the company or third parties. PBM Avocats drafts and negotiates shareholder agreements tailored to your structure and shareholding.