SWITZERLAND Law and Practice Contributed by: Mariel Hoch, Dominic Leu and Fabienne Perlini-Frehner, Bär & Karrer
1. Types of Company, Share Classes and Shareholdings 1.1 Types of Company The main (and most common) types of companies that can be formed in Switzerland are: • the stock corporation ( Aktiengesellschaft , AG); and • the limited liability company (LLC) ( Gesellschaft mit beschränkter Haftung , GmbH). However, the stock corporation is much more com- mon than the LLC. Both company types enjoy limited liability to the effect that only the company’s assets are liable for com- pany debts (ie, not the private assets of the respective shareholder(s)); therefore, shareholders do not lose their private assets in the event of bankruptcy. Shares of stock corporations can be publicly listed, whereas quota shares of LLCs cannot be traded pub- licly. 1.2 Types of Company Used by Foreign Investors Foreign investors typically use stock corporations or LLCs. While a stock corporation essentially consists of a board of directors that is responsible for the over- all strategy of the corporation, and of a management to which the board of directors delegates the daily business, the governance of an LLC is usually simpler. Therefore, international group companies often use LLCs for their Swiss subsidiaries. The transferability of shares of a stock corporation is usually less restricted than that for those of an LLC. Shareholders of a stock corporation are not publicly known (except when they hold a participation of at least 3% in a publicly listed company). Quotaholders of LLCs are registered in the commercial register. 1.3 Types or Classes of Shares and General Shareholders’ Rights Rights The rights attached to shares of a stock corporation or quota shares of an LLC are set out in the Swiss Code
of Obligations (CO) and in the articles of association of the respective company. Stock Corporation In a non-listed Swiss stock corporation, it is most common to issue registered shares. These can be cer- tificated. Non-listed companies may only issue bearer shares if they are issued as intermediated securities. Publicly listed stock corporations can issue bearer shares. Both share types must have a nominal value that is greater than zero. In addition, different classes of shares, such as super-voting or preference shares and participation and dividend rights certificates, can be introduced. Usually, the voting rights and financial rights attached to a share are in proportion to the total nominal value of the shares belonging to the respec- tive shareholder. Every shareholder must have at least one vote. If, however, super-voting shares are introduced, the right to vote is determined by the number of shares belonging to each shareholder – regardless of the total nominal value each shareholder holds. This means that each share confers one vote. The nominal value of the super-voting shares may not be lower than one-tenth of the nominal value of the other (common) shares. Super-voting shares allow shareholders to remain in control regarding voting rights while holding a comparatively small amount of capital. Super-vot- ing shares are quite common in Switzerland but have been criticised in the context of listed companies. Preference shares, on the other hand, enjoy preferen- tial rights vis-à-vis the other (common) shares that are expressly conferred on them by the articles of asso- ciation of the respective company, and may relate to: • dividend payments; • the share of the liquidation proceeds; or • subscription rights in the event that new shares are issued. Participation certificates only confer financial rights; they do not confer voting rights.
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