Corporate and Accounting Law 

Parallel to the revision of the limited liability company (GmbH) law, various changes have been made to corporate law ("minor revision of corporate law”). Some modifications were also made to the commercial register law and in company law.


The modifications entered into force on January 1, 2008.


A further revision, the "major revision” of corporate law, is especially intended to improve corporate governance, to make capital structures more flexible, to modernize general meetings and to introduce an up-to-date bookkeeping and accounting law. The Federal Council's draft of this revision was published on December 21, 2007, along with the announcement.

Key changes

  • Single-member company
    It is now possible to found a single-member company (Art. 625 CO).

  • Abolition of the qualification share
    Members of the board of directors need no longer be shareholders (Art. 707 para. 1 CO). In return, the members of the board of directors obtain the right to participate in general meetings and to submit proposals even when they are not shareholders (Art. 702a CO).

  • Abolition of the nationality and residence requirement
    The former law required a majority of the members of the board of directors to be residents of Switzerland and to possess Swiss citizenship (Art. 708 para. 1 Clause 1 CO). The citizens of EU or EFTA countries were considered equivalent to Swiss citizens with regard to nationality. To avoid this geographical disadvantage and to prevent possible discrimination against persons living in Switzerland who are neither Swiss citizens nor EU or EFTA nationals, it is now only required that the AG be represented by one person resident in Switzerland. This requirement may be satisfied by a member of the board of directors or by a director (Art. 718 para. 4 CO). The person resident in Switzerland must have individual signatory authority, or two persons with collective signatory authority shared jointly must be resident in Switzerland. Furthermore, at least one member of the board of directors must be an authorized representative.

  • Agreements between the company and its representative
    Art. 718b CO requires that agreements between the company and its representative must be in written form. However, this requirement does not apply for agreements related to ongoing business in which the service provided by the company does not exceed a value of CHF 1,000. Services that cannot be assessed in monetary figures must always be agreed to in writing. The value of internally related agreements must be calculated as a total.

  • Deficiencies in the organization of the AG
    Deficiencies in the legally stipulated organization of the company are now governed uniformly. If the company lacks a legally stipulated entity or if such an entity is not properly constituted, then a shareholder, a creditor or the head of the commercial register can apply to the judge to take the necessary measures (Art. 731b para. 1 CO) Possible measures include setting a deadline for reinstatement of the proper legal status, creation of the missing entity or appointment of an administrator, or the dissolution and liquidation of the company in question (Art. 731b para. 1 subpara. 1 to 3  CO).

  • Reduction of share capital in the event of restructuring
    Art. 725 para. 1 CO allows the general meeting to cut capital as a restructuring measure in the event of capital loss. If the share capital has been lost completely according to an objective assessment, it can be reduced to zero and then increased again directly thereafter. According to the jurisprudence of the former law, shareholders maintained their company position, and thereby also their voting rights, regardless of the destruction of their shares and lack of participation in recapitalization. Art. 732a para. 1 CO now stipulates that the former membership rights of shareholders are eliminated if the share capital is reduced to zero for purposes of restructuring and then increased again. The former shares must be destroyed. If the share capital is increased again, however, the former shareholders have an inalienable subscription right (Art. 732a para. 2 CO).


AG or GmbH?

The new GmbH law offers companies numerous organizational possibilities, but also makes it more difficult to choose the best type of company. The following table contains the most important differences between the GmbH  and the AG (corporation) as legal forms

The reference work "Neuerungen im Gesellschafts- und Revisionsrecht 2007/2008" [Changes to corporate law and auditing law 2007/2008] (Schulthess Verlag, ISBN/ISSN: 978-3-7255-5329-7) provides a quick introduction to the subject, explains important legal texts, and compares the various types of company. Order directly via Schulthess Verlag

Company Law and M&A

KPMG`s Legal unites in the practice „Company Law and M&A” several fields of law that in the day-to-day running of a business often appear in combination.