The joint-stock company (AG — Aktiengesellschaft / SA) is the most widely used corporate form in Switzerland for medium and large companies, as well as for holding structures and investment vehicles. Governed by arts. 620 to 763 CO, it offers a robust governance structure, limited shareholder liability and great flexibility in the transfer of shares. PBM Avocats accompanies its clients through all phases of incorporating an AG in Geneva and Lausanne, from structuring to registration in the commercial register.
Fundamental Characteristics of the AG
The AG is a company limited by shares with legal personality from the moment of its registration in the commercial register (art. 643 CO). Its main characteristics are:
- Minimum share capital: CHF 100,000, of which at least 20% paid up (minimum CHF 50,000) at incorporation (art. 632 CO)
- Shareholders: liability limited to their contributions; anonymity possible with bearer shares (subject to conditions)
- Shares: registered or bearer, free par value (minimum CHF 0.01)
- Mandatory organs: general meeting, board of directors, audit body (unless opting-out)
- Representation: at least one person domiciled in Switzerland (art. 718 para. 4 CO)
- Share transfer: in principle free, except for approval or restriction clauses in the articles
The Incorporation Procedure: Steps and Formalities
| Step | Description | Legal Basis |
|---|---|---|
| Drafting articles of association | Mandatory content: company name, registered office, purpose, capital, par value of shares | Art. 626 CO |
| Payment of capital | Deposit to a blocked bank account (at least 20% of capital, min. CHF 50,000) | Art. 632 CO |
| Authentic deed of incorporation | Notarial certification of incorporation, articles, composition of the board | Art. 629 CO |
| Appointment of board and auditor | Designation of directors and, where applicable, of the audit body | Arts. 707, 727 CO |
| Commercial register filing | Submission of complete file to the cantonal commercial register | Art. 641 CO |
| SOGC publication | Publication in the Swiss Official Gazette of Commerce, release of capital | Art. 643 CO |
The Board of Directors: Powers and Obligations
The board of directors (BoD) is the management and supervisory organ of the AG (arts. 707 et seq. CO). It holds non-delegable powers set out in art. 716a CO, which may neither be transferred to the general meeting nor delegated to management:
- Overall management of the company and issuing of necessary directives
- Organisation of accounting, financial control and financial planning
- Appointment and removal of persons entrusted with management
- Overall supervision of persons entrusted with management
- Preparation of the annual report and the general meeting
- Notification to the court in the event of over-indebtedness (art. 725b CO)
Directors must exercise their duties with all necessary diligence and faithfully safeguard the company's interests (art. 717 CO). Their personal liability is engaged in the event of a breach of these obligations.
Types of Shares and Their Regime
| Type of Share | Characteristics | Special Conditions |
|---|---|---|
| Registered share | Recorded in the name of the holder in the shareholders register | Transfer via assignment and entry in the register |
| Bearer share | Transferable by simple delivery of the certificate | Reserved for listed companies or those whose shares are deposited with a financial intermediary (art. 622 para. 1bis CO) |
| Preference share | Preferential rights over dividends or liquidation proceeds | To be provided in the articles (art. 654 CO) |
| Jouissance share | No par value, patrimonial rights but no voting rights | Issued as compensation for cancelled shares (art. 657 CO) |
| Participation certificate | Pecuniary rights without voting rights | Max. double the share capital (art. 656a CO) |
Contributions in Kind and Asset Acquisitions
When the AG is incorporated with contributions in kind or in case of acquisition of assets belonging to founders or shareholders, the procedure is subject to additional specific requirements (art. 634 CO). A founders' report must be prepared, certifying that the value of the contributions is at least equal to the par value of the shares issued in exchange. This report is subject to review by a licensed auditor. Overvaluation of a contribution in kind constitutes a criminal offence (art. 151 SCC).
Tax Regime of the AG
The AG is taxed on its net profit at the federal rate of 8.5% (effective rate). In the canton of Geneva, the combined effective rate (federal + cantonal + communal) has been approximately 13.99% since the TRAF reform. In Lausanne (Vaud), it is approximately 13.79%. Dividends received by corporate shareholders benefit from the participation deduction if the participation is at least 10% of the capital or represents a value of CHF 1 million (art. 69 FITA). Holdings and group structures may use this mechanism to optimise their overall tax burden.
Incorporation Costs
| Item | Indicative Amount (CHF) |
|---|---|
| Notary fees | 1,500 – 3,500 |
| Commercial register fees | 700 – 1,200 |
| Minimum paid-up share capital | 50,000 (20% of CHF 100,000) |
| Issuance stamp duty | 0 if capital ≤ CHF 1 million |
| Lawyer's fees (PBM) | By quotation |
Frequently Asked Questions about Incorporating an AG in Switzerland
What is the minimum share capital to incorporate an AG in Switzerland?
Art. 621 CO sets the minimum share capital at CHF 100,000. However, only 20% of the capital needs to be paid up at incorporation, with an absolute minimum of CHF 50,000 (art. 632 CO). The balance may be called up later by the board of directors as needed. Shares may be registered or bearer — the latter have been subject since 2019 to strict conditions regarding listing or registration in the commercial register.
Is an authentic deed required to incorporate an AG in Switzerland?
Yes. Art. 629 para. 1 CO requires that the articles of incorporation of an AG be established in authentic (notarial) form. This requirement also applies to the articles of association adopted at incorporation. The notary must notably confirm the identity of the founders, the amount of paid-up capital and the absence of security granted over contributions. Without this authentic deed, registration in the commercial register will be refused.
How is the governance of an AG organised?
The AG rests on three distinct organs: the general meeting (supreme organ, art. 698 CO), the board of directors (strategic management and supervision, art. 707 CO) and the audit body (financial control, art. 727 CO). So-called 'opting-out' companies may waive the auditor if all shareholders consent and the company is not subject to ordinary audit (art. 727a CO). The allocation of powers between these organs is of public order for essential attributions.
Can a single-shareholder AG be incorporated in Switzerland?
Yes. Since the revision of the CO, an AG can be incorporated by a single founder, whether an individual or a legal entity (art. 625 CO). The single-shareholder AG is common for holding structures, investment vehicles and liberal professions organised as companies. The sole founder may also be the sole director, provided the company is represented by at least one person domiciled in Switzerland.
What is the liability of founders and directors of an AG?
Founders who acted unlawfully during incorporation (overvaluation of contributions in kind, false declarations) incur joint and several liability towards the company and its creditors (art. 752 CO). Directors are personally liable during the company's life for damage caused by negligent management under art. 754 CO. This liability is personal and unlimited in cases of intent or gross negligence. PBM Avocats advises directors on their legal obligations, particularly regarding directors' liability.