How to found a public limited company (AG) in Switzerland: Step by step guide

Alongside the limited liability company and the sole proprietorship, the public limited company is one of the most frequently chosen legal forms when founding a company in Switzerland.

It is particularly popular due to its limited liability, which extends exclusively to the business assets. For those who can raise the necessary share capital, the AG also offers excellent opportunities for growth.

These advantages also make the company form attractive for smaller companies. You can find details on the required start-up capital and all the points that are necessary for the formation of an AG in the following checklist.

Our page on company formation in Switzerland explains how the AG differs from the GmbH and the sole proprietorship.

One natural or legal person is sufficient to found a public limited company. The founding shareholder could be you.

Forming a company limited by shares requires careful planning and compliance with certain legal requirements. We have prepared detailed instructions to guide you through the entire incorporation process.

Do you already run a company that you would like to convert into a public limited company? Then you can skip directly to point 4.

1. Founding an AG: Development of a business idea and preparation of a business plan

The first step in founding your AG is to develop a business idea. What problem can you solve and what products or services do you offer? Who is your target group and what are your sales channels?

A comprehensive business plan is essential, as it will concretize the vision of your company and serve as a basis for possible financing. A good business plan should contain the following elements:

• Summary: Brief description of the business plan.
• Company description: What is your business idea? What is your USP?
• Market analysis: Who are your competitors and what is the nature of the market?
• Organizational and management structure: Who are the founders and what skills do they have?
• Offer: A detailed description of the products or services you wish to offer.
• Marketing and sales strategy: How will you reach your target group?
• Financial planning: forecasts, budget and financing requirements.

2. Budgeting the start-up costs

Accurate budgeting of the start-up costs is essential. This includes all expenses incurred for the establishment and development of your company.

The more detailed your cost estimate is, the more realistically you can plan the budget for your legal form and avoid unexpected costs.

These include, for example:

• Market studies
• Preparation of the business plan
• Development of a website
• Administrative costs
• Communication costs
• Fees for entry in the commercial register
• Notary fees
• Costs for the registration of trademarks or patents
• Share capital

These are not direct costs, but you need the capital to set up the limited company. The money can be used for business activities once the company has been successfully founded.

3. Select company name

Once you have set the budget for your limited company, the fun part begins: you get to choose a suitable company name. This name should not only be memorable and easy to remember, but also reflect the image and credibility of your company.

A well-chosen company name gives potential customers and business partners an immediate indication of your activity or your products and creates transparency.

4. Determine share capital and corporate bodies

Now you need to decide how much share capital you want (at least CHF 100,000 is required) and how the shares will be distributed among all the people in the company. You also need to determine the organizational structure of your company.

So, which people belong to your company and what are you responsible for?

This includes the appointment of the Board of Directors and, if necessary, an auditor. In order to establish the legal form, at least one person authorized to represent the company must be resident in Switzerland. You must also determine which person is authorized to sign official documents of your company.

5. Shareholders' agreement (optional)

A shareholders' agreement in Switzerland regulates the rights and obligations of shareholders over and above the statutory provisions and contains agreements on the exercise of voting rights, restrictions on the transfer of shares and conflict resolution mechanisms.

Such an agreement is particularly worthwhile in order to ensure stable cooperation and protect the interests of all shareholders involved. It is strongly recommended to consult an expert to ensure that all relevant aspects are taken into account. We at Nexova Treuhand will be happy to advise you in this regard.

6. Opening of a capital contribution account

Choose a bank where you deposit your start-up capital. This bank will hold the share capital in a capital contribution account until your limited company is officially entered in the commercial register.

7. Preparation of the founding documents and articles of association

Another essential item on your company formation checklist is the preparation of the articles of incorporation, including the articles of association of your public limited company and the founding resolutions. You won't get very far without these documents.

The articles of association should contain the following information:

• Company name
• Purpose of the company
• Registered office
• Powers of representation of the corporate bodies
• Amount of share capital
• Number of shares
• Terms and conditions of the General Meetings
• Appointment of the Board of Directors
• Appointment and duties of auditors, if applicable

The articles of incorporation include basic provisions on the organization, assets and purpose of the company and contain information such as the amount of capital, corporate purpose, name, registered office and organizational structure.

The founding resolutions, on the other hand, are the resolutions passed by the founding members to formally establish and organize the legal form. This happens after the first founders' meeting. We will come to this in the next point.

8. Holding the founders' meeting

During the founders' meeting of a public limited company (AG) in Switzerland, the founders declare the formation in a public deed, lay down the articles of association and appoint the executive bodies. They subscribe to the shares and confirm that all shares are validly subscribed, the contributions correspond to the issue amounts and the legal requirements are met. The notarized minutes are used for entry in the commercial register, which officially establishes the AG.

9. Entry in the commercial register

Registering your company limited by shares in the commercial register is a crucial step, as it increases your trustworthiness in the eyes of third parties. Above all, however, this entry is absolutely necessary in order to open a bank account in the name of your company, obtain a PO box or set up a business telephone number.

10. Release of the share capital

Once your public limited company has been entered in the commercial register, the share capital is released by the bank. All you have to do is submit an excerpt from the commercial register.

11. Creation of a share certificate and opening of a share register

Since the revision of company law on 01.01.2023, it has been mandatory to keep a share register (share register). This register contains the names and addresses of the owners and beneficiaries of registered shares.

The share certificate serves as official proof of share ownership.

12. Registration with the compensation office

Once your limited company has been successfully established, you will need to register with the compensation office that administers the old-age and survivors' insurance (AHV), disability insurance (IV) and income compensation scheme (EO).

Every employee who works for your company must be registered with the compensation fund. In addition, mandatory insurance contracts must be concluded in accordance with the following laws:

• BVG (Law on Occupational Retirement, Survivors' and Disability Pension Plans)
• UVG (Accident Insurance Act)

In the case of a public limited company, you as the founder are also considered an employee and must therefore take these steps for yourself if you pay yourself a salary.

13. Clarification of VAT liability

Depending on the area of activity of your limited company, you must clarify whether you are liable for VAT. If this is the case, you must register with the Federal Tax Administration.

As experts in setting up companies in Switzerland, we will be happy to advise you.

The formation of this form of corporation is particularly worthwhile in the following cases:

• High capital requirement: If your company needs a lot of capital to start or grow. You can easily raise capital by issuing shares.
• Limited liability: If you want to protect your private assets. The liability of shareholders is limited to the capital contributed.
• Legal security: The AG offers legal security through clear legal regulations and structures.
• Reputation and credibility: An AG enjoys a high reputation among business partners and banks, which makes it easier to initiate business and obtain loans.
• Planned expansion: If you are planning to expand your company, as the AG offers a flexible and scalable structure.

Advantages

The formation of a public limited company in Switzerland offers numerous advantages. The limited liability protects the shareholders' private assets. In addition, the AG makes it easy to raise capital by issuing shares, which is particularly important as it allows your company to invest and grow quickly.

An AG enjoys a high reputation with business partners and banks, which facilitates business activities. In addition, the corporate structure offers a high degree of scalability and flexibility, which allows the company to adapt quickly to changing market conditions.

After all, clear legal regulations and structures ensure legal security and a stable basis for sustainable growth.

Disadvantages

Founding a public limited company brings with it a number of challenges. These include high initial costs for the notary, commercial register and consultancy services. The bureaucratic effort is also considerable, as numerous administrative and formal requirements must be met.

Another disadvantage is double taxation: the company's profits are subject to corporation tax, and income tax is also payable on distributions to shareholders.