Companies

An actual incorporation can take place within a few days. The duration depends primarily on the chosen legal form and the availability of the necessary documents and financial resources as well as the offices and agencies to be involved in the formation.
 

The most important task before the company is founded is to find the right legal form for the company to be founded and the entrepreneur behind it. Therefore, before the company is founded, detailed considerations and decisions must be made regarding the capital to be invested, the entrepreneurial risk to be taken with the resulting liability in the event of failure, entrepreneurial independence, the tax situation for the company and the entrepreneur as well as social insurance.
 

In Switzerland, companies are most frequently run as sole proprietorships, limited liability companies (GmbH) or public limited companies (AG). If a company is to be founded jointly by several colleagues, general partnerships and limited partnerships are also available in addition to the GmbH and AG.
 

The decisive difference between the various legal forms is the risk that is assumed through the entrepreneurial activity. The advantage of the GmbH and AG is that liability is limited to a certain amount. In the case of general partnerships, limited partnerships and sole proprietorships, the entrepreneur is ultimately liable with his entire private assets for any claims arising from the business activity.

The GmbH and the AG are legal entities that only come into existence when they are entered in the commercial register. To form a GmbH or AG, a public deed must be drawn up with a notary in which the founder declares the formation of the GmbH/AG, defines the articles of association and appoints the executive bodies. The company name with the addition GmbH/AG can be freely chosen. The payment (payment of subscribed company shares) of the company to be founded is made in cash or by contribution in kind. The main differences between AG/GmbH can be found in the following table.

The contribution in kind is a variant of the capitalisation. With a contribution in kind, other assets such as property, machinery, land, receivables or other assets are contributed to the newly founded company instead of money. However, not all items can be contributed to the company as contributions in kind. Contributions in kind must be capitalisable in the balance sheet, actually exist at the time of registration and be realisable.
 

Special cases of contributions in kind are the conversion of a general or limited partnership or the transfer of a sole proprietorship into a stock corporation or limited liability company. In this way, these aforementioned companies can be converted into a GmbH or AG.

In the case of a non-cash contribution, there are further legal provisions that must be observed. For example, a contribution in kind agreement, a formation report and an audit confirmation from the auditor of the contribution in kind must also be available.

The commercial register is a public register. The facts entered in the commercial register must be true and correspond to the actual circumstances for the entire period during which they remain entered in the register. All changes to facts must be updated immediately in the commercial register, even in the case of temporary changes. The transfer of the registered office of the GmbH from Unterseen to Goldswil must therefore be entered in the land register in all cases.

A capital increase is a subsequent increase in the share capital of an AG or the share capital of a GmbH. There are three types of capital increase for a public limited company: ordinary, authorised and conditional. The ordinary capital increase will be discussed here, as this is the most commonly used option where all the details are known in advance.
 

The Annual General Meeting decides to increase the share capital by a certain amount. The main details are defined in this resolution to increase the share capital. The resolution to increase the share capital must be recorded together with the amendment to the Articles of Association in a notarised public deed. The Board of Directors is authorised to carry out the capital increase, which must be completed within three months. If all the share capital is represented, a universal general meeting may be held instead of the Annual General Meeting, in which case the invitation formalities do not have to be complied with.
 

The existing and any new shareholders - in compliance with their subscription rights - undertake to make a contribution to the company by means of a subscription form and to acquire a certain number of shares. The payment of the subscribed shares can be made in cash, by offsetting or converting freely usable equity or by a contribution in kind.
 

The Board of Directors must report on the completed capital increase in a capital increase report. In cases provided for by law (e.g. contribution in kind), this report must also be audited for correctness and completeness by an authorised auditor.

Finally, the Board of Directors must declare in a publicly certified resolution that the capital increase has been validly realised in accordance with the resolution of the Annual General Meeting. This resolution must also include a resolution to amend the Articles of Association to reflect the new share capital. The resolutions must be registered with the commercial register office by the notary. Following successful registration, publication will be made in the Swiss Official Gazette of Commerce SOGC.

In Switzerland, the new name, legally known as the company name (the name of a commercial company entered in the commercial register, which it must use uniformly in commercial transactions), must be clearly distinguishable from any company already entered in the commercial register. The company name may not consist of purely factual designations; special regulations apply to the use of national or geographical terms. The company name must be truthful and must not be deceptive or used in a deceptive manner. In addition, the company name - with the exception of fantasy names - must be covered by the purpose of the company.

In principle, gains from the sale of shares held as private assets are considered tax-free. If a profit is realised from the sale, this is in most cases a tax-free capital gain. There is no time component to consider in this case. In the case of commercial securities trading, income is taxed.
 

Caution is required in the context of succession arrangements, as various constellations can arise here which may nevertheless trigger taxation.
 

If, for example, the AG was created as part of a reorganisation or was founded by transferring a sole proprietorship and is sold within 5 years of this event (so-called lock-up period) at a price higher than the transferred equity, the hidden reserves transferred from the sole proprietorship to the AG will be taxed retrospectively.

In this case, the GmbH must be liquidated by a publicly certified resolution of the shareholders' meeting. The liquidation must be registered with the Commercial Register Office. Following this, the liquidators must conclude the ongoing business, collect any outstanding shares if necessary, realise the assets and fulfil the company's obligations, provided that the balance sheet and the statement of debts do not show any over-indebtedness.

The assets of the dissolved company shall be distributed among the shareholders in proportion to the amounts paid in after its debts have been repaid, unless the Articles of Association provide otherwise. The termination of the liquidation must be registered with the commercial register and the GmbH is then cancelled.

The closure of a sole proprietorship on cessation of business requires a substantiated cancellation application to the commercial register office, provided the sole proprietorship is entered in the commercial register at all. If the cancellation is approved, the sole proprietorship will be deleted from the commercial register. The cancellation of the sole proprietorship may also have tax consequences, e.g. if business assets are transferred to private assets.

Condominium ownership involves acquiring a co-ownership share (fraction) in a property that grants you exclusive use (the so-called special right) of the condominium. You become part of the condominium owners' association, which owns the land and the building as a whole. The most important provisions for the management and use of the property are set out in the condominium owners' regulations.
 

Within their own flat (condominium unit), owners are generally free to extend or remodel. The condominium owners jointly decide on the use of the common parts as a condominium owners' association.
 

The advantage of condominium ownership is that the costs of the land, the construction of the building and the maintenance of the common parts are shared between several people. As a rule, an administrator takes care of the administrative aspects of a building.
 

The flat in the legal form of condominium ownership is also easy to trade, as the resale of a condominium unit is simple and generally requires less capital investment from a potential buyer than the sale of a detached house.

From a purely legal point of view, it is not possible to convert a sole proprietorship into a public limited company.
 

Such a ‘conversion’ takes place via a diversion as a qualified formation of a public limited company, where the founder transfers all assets and liabilities of the sole proprietorship entered in the commercial register to the new public limited company to be formed on the basis of a transfer balance sheet. The formation of the new public limited company is subject to public notarisation, which must be carried out by a notary. Once the new public limited company has been entered in the commercial register, the sole proprietorship is cancelled.

Yes, a merger between an AG and a GmbH is possible. A merger between companies of the same legal form is possible without restriction. The merger of different legal forms is also possible between the AG, GmbH, Kommandit-AG, co-operative, general and limited partnership and the association, in some cases with certain restrictions and special features.
 

There are basically two ways in which mergers can take place. Either by absorption or combination merger.

In an absorption merger, one or more companies are dissolved and all assets and liabilities of the company/companies to be dissolved are transferred to another, already existing company.
 

In a combination merger, two or more companies are transferred to a newly founded company, which takes over all the assets and liabilities of the transferring companies.

If only a part of the company is to be sold, a demerger can take the form of a split-off or split-up. The split-off part of the business is transferred to a new company (spin-off; Muster AG spins off parts to Esempio AG) or the transferring company is dissolved at the same time and transfers one part of the business to a new company (split-up; Muster AG becomes Esempio AG and Beispiel AG). The split new company can generally be sold in a tax-neutral manner without taking into account a five-year lock-up period, provided there are no other special circumstances.