Switzerland is growing in popularity as a low-tax onshore jurisdiction, with a flexible legal regime for holding and investing companies. Part of this includes the ability to efficiently manage legal entities from an administrative point of view.
In a second feature, Jurgen Borgt, TMF Group Switzerland, looks at how to smoothly manage the liquidation of a Swiss entity. You can read his first piece in this series on how to establish a Swiss company here.
There are three areas to consider when closing a company in Switzerland: shareholder procedures; accounting administration; and documentary requirements. These are details below:
1. Shareholder Procedures
The shareholders must hold a formal general meeting in the presence of an official notary to cover the following issues:
• Dissolution and liquidation of the company
• Termination of directors’ authority
• Appointment of a liquidator
For a quorum, a majority of the shareholders must be represented at the meeting, and at least two thirds of those present must vote for the dissolution.
Upon passing the resolution to close the entity, the notary’s record of the meeting, prepared in the form of a notarial deed, is submitted to the Swiss Commercial Register. A notice of the liquidation also needs to be published in the Swiss Official Gazette of Commerce.
2. Accounting Administration
Once the notice of liquidation has been published, the liquidator must organise the following accounting administrative processes:
• Prepare a balance sheet as at the date of liquidation
• Liaise with the creditors of the company to confirm their claims on the entity
• Realise the assets of the business, and pay off its creditors to the extent possible
• Prepare a closing balance sheet
Once the above procedures are complete, the liquidator of the business will call a final meeting of the shareholders to confirm the above, and distribute what funds are available. Any bank accounts may then be closed, and the termination of the business is registered with the Commercial Register. Lastly, the tax authorities must confirm that any due payments have been settled. The Commercial Register will then officially close the company.
3 Documentary Requirements
There are a number of official documents which must be drawn up during the liquidation process, including:
• Power of Attorney from the shareholders to hold the general meeting to approve the liquidation of the company
• Minutes of the general meeting of shareholders
• Engagement letter for the appointment of the liquidator
The above documents can be organised by the company’s legal advisor.
How TMF Group can help
TMF Switzerland has many years of expertise in assisting international companies open or dissolve their local entities. If you would like to learn more about the procedures, please contact us.