Buying a Swiss company: due-diligence checklist

Before taking over an existing Swiss AG or GmbH, you must verify the company is what it claims to be, carry no hidden debts and poses no legal risk. The verification runs across nine core checks: the commercial register and its history, the debt-enforcement extract, filed accounts and auditor status, VAT and tax registration, social-security liabilities, pending litigation, board and signatory powers, the share register and beneficial-owner records, material contracts and lease obligations, and tax-loss carry-forwards. This article walks through each check, explains what documents to obtain and what findings should end the transaction.

Getting the commercial register extract and verifying the company exists

The commercial register extract (Handelsregisterauszug) is your starting point for every acquisition. It answers the basic question: does the company exist, and who is authorised to sign for it? Order an uncertified extract from Zefix or the cantonal register office of the company's seat. The extract shows the company name (exactly as protected), legal form (AG or GmbH), UID (CHE number), capital, registered directors and signatories, and auditor status. It is public data and free or costs a small fee if ordered online. A certified extract, which can be used abroad, is issued by the register office for a fee. Do not skip this: you cannot legally acquire a company if it is not on the register.

What the register history tells you

Beyond the current entry, pull the complete publication history from the Swiss Official Gazette of Commerce (SOGC, SHAB), which publishes every register entry, change and deletion. This history reveals past name changes, purpose changes, board transitions, and any deletions or reinstatements. If you are buying a shelf company, the history should be clean and dormant from incorporation onwards. If it is a trading company, the history shows how long it has operated, whether it has been liquidated before, whether the current board is stable, and whether the company has gone through distress. Watch for frequent changes in directors or purpose, which may signal turnover or instability.

Checking the debt-enforcement extract (Betreibungsauszug)

The debt-enforcement extract lists all legal debt-collection proceedings against the company: judgements, attachments (Pfändungen), bankruptcy openings and enforcement suspensions. Request it free or cheaply from the Swiss Debt Collection Portal (betreibungsschalter.ch) or from the bailiff offices of the cantons where the company has assets. A clean extraction is proof the company has no creditors with active claims. Any entry — a single attachment, a pending judgement, or a bankruptcy opening — is a red flag you must investigate. For more on debt enforcement and how to read these extracts, see our guide to Swiss debt collection and the Betreibung process.

How to interpret enforcement entries

Not every entry is fatal. A single, small garnishment that is due to be released can be cleared before takeover. A bankruptcy opening that was withdrawn is a past event, though it signals the company was insolvent once. An enforcement suspension is a temporary halt, not a discharge. However, a long list of entries, large outstanding judgements, or repeated bankruptcy filings are serious warnings. Discuss any finding with your accountant and lawyer before proceeding.

Reviewing filed accounts and auditor status

Request the most recent filed accounts (annual report and balance sheet) from the company or its accountant. If the company has no more than ten full-time employees on annual average, it may have dispensed with the limited audit — a step that requires the consent of all shareholders — under Art. 727a CO. In that case, it will file a confirmation of dormancy (Treuhandbestätigung) or a simplified annual report. For a dormant shelf company, this will show no activity. For a trading company, the accounts tell you revenue, costs, profitability and liabilities. You are looking for three things: Is the company profitable or does it have accumulated losses? Does it owe money to creditors on the balance sheet? Are there provisions for pending disputes or claims?

What to ask about the accounts

If you cannot read the accounts yourself, have an accountant review them. Pay particular attention to deferred liabilities, provisions for doubtful debts, and any related-party transactions (payments to the owner or family members that may not continue). Ask whether the accounts have been audited, and if so, whether there were any reservations (Einschränkungen) or qualifications in the auditor's report. A qualified audit opinion—one that flags significant uncertainties or limitations—may indicate the auditor had doubts about the company's assets, valuations or future viability. Request the full auditor's letter, not just the signed statements.

Understanding hidden liabilities in the balance sheet

The balance sheet presents a snapshot of what the company owns and owes on the filing date. However, accounting is not an exact science, and companies have choices in how they value inventory, depreciate assets and provision for disputes. Look for large provisions (Rückstellungen) that do not correspond to known liabilities; these often signal hidden legal or commercial risks. Ask the company's accountant or the seller's representative what each major provision covers and whether it will be released or settled after the takeover. Conversely, watch for assets that may be overstated: inventory that is obsolete, receivables that are uncollectible, or intangible assets with no clear value. The price you pay should discount for any uncertainties you find.

Confirming VAT registration and tax status

Verify whether the company is registered for Swiss VAT (Mehrwertsteuer, MWST). A company's VAT number is its CHE number followed by MWST; this determines whether it can claim input VAT on purchases. Request written confirmation from the Federal Tax Administration (ESTV) or from the company's tax advisor, showing the registration date and any changes to exemptions. Check whether the company has filed tax returns on time and whether there are any outstanding tax arrears or disputes with the tax authority. A company in good standing will have no tax-authority entries on the debt-enforcement extract.

Checking outstanding social-security contributions

Social-security liabilities (AHV/AVS, IV/AI, ALV and accident insurance) are a separate risk category. They are not enforced through the bailiff (Betreibungsamt) but through the cantonal social-insurance offices. Ask the company for written confirmation that all contributions have been paid in full up to the current month. If the company is actively employing staff, request recent payroll records and a confirmation from the company's insurance broker or the social-insurance authority. Unpaid contributions can be pursued against both the company and, in some cases, the responsible directors personally.

Searching for pending litigation and disputes

Ask the company and its lawyer whether there are any pending civil or administrative proceedings. Search the cantonal courts' web portals (where they exist) for the company name. Look at the debt-enforcement extract for any ongoing enforcement suspensions (Einsprache), which indicate a dispute in progress. Check the company's correspondence and board minutes for any mention of threatened or pending claims. A company facing significant litigation that is not disclosed is a major red flag. If litigation is known, obtain copies of the court filings and the company's legal advice on likely outcome and financial exposure.

Types of disputes to investigate

Employment disputes are common and can be costly: wrongful-termination claims, wage disputes, or discrimination allegations. Client disputes may arise from unperformed work or unsatisfied deliverables. Regulatory disputes with cantonal authorities, tax authorities or labour inspectorates can result in fines, back-taxes or forced operational changes. Environmental or product-liability claims can be existential. Intellectual-property disputes (patent challenges, trademark infringement) can block the company's core activities. Ask specifically whether the company has received any cease-and-desist letters, regulatory warnings, or notice of claims from former employees, clients, suppliers or authorities. A seller who cannot account for any threatened or pending disputes is not trustworthy.

Verifying board authority and signatory powers

The commercial register extract lists the board members and signatories and the type of signature authority each holds (sole signature or joint signature at two). Verify this information matches the company's articles of association. Confirm that every signatory listed on the register is still authorised and has not been revoked. If the company currently has a sole signatory and you plan to appoint multiple new board members, confirm in writing that the current signatory will sign the share transfer and the board resolution authorising the new appointments.

Examining the share ledger and beneficial-ownership records

For a Swiss AG, the commercial register does not list shareholders; ownership lives in the company's internal share register (Aktienregister). Request a certified copy of the current share ledger showing all registered holders and their nominal holdings. Confirm that the person offering to sell the company is the registered owner or has power of attorney to sell. For GmbHs, members (owners) are listed on the register extract, so verify they match the actual membership.

Request this register and confirm it identifies the true owners, with supporting documentation (ID, source-of-funds declaration). Banks and authorities can demand this register; it is private to the company but must be produced on request. Any vague or incomplete beneficial-owner register is a compliance risk you inherit.

Reviewing material contracts and lease obligations

Request all material contracts: leases (premises, equipment), client agreements, major supply or service contracts, loans, bank credit facilities, and material employment agreements. Look for three categories of risk. First, change-of-control clauses that terminate the contract if ownership changes; these can cost you the client or asset immediately post-takeover. Second, personal guarantees from the current owner that stay attached to the company and become your liability. Third, renewal and notice periods that bind you after you take over; a lease with a long notice period for cancellation, for example, commits you to ongoing premises costs.

Special attention to related-party agreements

Examine any contracts between the company and the current owner or their family members: management fees, rents, loans, consulting agreements. These often have no commercial rationale and may evaporate when you take over, improving the company's actual profitability. Conversely, a supplier contract tied to a personal relationship may become unworkable if the supplier withdraws after a change of ownership. If the company's cost structure depends on favourable terms from the current owner's family business, confirm that those terms will continue or renegotiate them into formal contracts with third parties before takeover. A company that looks profitable only because the owner gave it a sweetheart rent or supply deal may become unprofitable once you must pay market rates.

Verifying tax-loss carry-forwards and their treatability

If the company has accumulated losses from prior years, these are recorded as a deferred tax asset (Verlustvortrag). In principle, they survive the ownership change. However, Swiss tax law and cantonal rules allow tax authorities to limit or forfeit losses if there is a substantial change in ownership combined with a change in the company's purpose or business. A company that has been dormant with no revenue but has significant losses may find those losses are not deductible against your new business activity if you change the company's purpose. Consult a Swiss tax advisor to model whether losses will be available to you post-acquisition.

Red flags that should end the transaction

Walk away from the deal if any of the following apply:

• Insolvency. The company's balance sheet shows liabilities exceed assets and there is no clear path to solvency. This is often called over-indebtedness (Überschuldung).
• Long debt-enforcement record. Multiple entries on the Betreibungsauszug, large outstanding judgements or recent bankruptcy filings signal the company is pursued by creditors and you will inherit their claims.
• Material undisclosed liabilities. You discover contracts, loans or claims the seller did not mention. This is grounds to renegotiate or withdraw entirely.
• Change-of-control clauses that terminate major relationships. If the company's revenue depends on a single client whose contract terminates when ownership changes, the business is not what it seems.
• Beneficial-owner documentation is missing or vague. If the seller cannot produce clear identification or a legitimate source-of-funds explanation, the company may be entangled with sanctions risk or anti-money-laundering concerns, and your bank will refuse to work with you.
• Litigation with unlimited exposure. If the company faces a material claim (employment dispute, environmental liability, product liability) and the seller has not disclosed it or quantified the risk, the cost could consume the entire purchase price.
• The seller refuses to warrant they own the company or cannot produce evidence of ownership. If there is any ambiguity about who is entitled to sell, do not sign.

Documenting findings and structuring the purchase

Gather all due-diligence findings into a single memo: the register extract, the debt extraction, the accounts, contracts, any correspondence with the seller, and your legal and tax assessments. Use this as the basis for negotiating the purchase price and the purchase agreement. Every finding — a known liability, a change-of-control clause, a disputed contract — should map to a price adjustment, an indemnity or a representation from the seller. Never buy a company "as-is"; always require clear representations from the seller about what the company owes, what contracts are in force, and that there are no hidden claims. A well-structured purchase agreement protects you if something emerges later. If you are acquiring a company and want ongoing support with board updates, signatory changes and entity management, our corporate administration team can handle that alongside the acquisition.

After you sign: the post-closing handover

Once you have taken over the shares, engage your own accountant to verify the handover: that all liabilities disclosed in the purchase agreement have been settled or provided for, that all contracts are in your name, and that you have received all material documents (articles, board minutes, correspondence, bank statements). Notify all material suppliers, clients and banks of the change of ownership. File any required changes with the commercial register (board, directors, articles) within the required timeframe. And begin reviewing the company's internal compliance: has it filed all required tax returns, maintained its accounting records, and met its social-security obligations? Inheriting a company also means inheriting its administrative duties.