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Swiss Accounting Principles

Swiss accounting principles, governed by the Swiss Code of Obligations, dictate the financial reporting requirements for entities operating within Switzerland. Proficiency in Swiss accounting environment becomes crucial for companies striving for enduring success.

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In Switzerland, adherence to standard accounting practices is not just a best practice but a legal obligation for many entities. Governed by the Swiss Code of Obligations, these regulations ensure transparency and accountability in financial reporting. From legal entities like AG and GmbH to sole proprietorships, the range of businesses required to maintain detailed accounting records is broad. Moreover, the choice between Swiss GAAP FER and International Financial Reporting Standards (IFRS) offers flexibility, catering to the diverse needs of companies operating within Switzerland's dynamic economic landscape. Understanding these principles and obligations is important for businesses striving for financial clarity and compliance.

Understanding M&A Regulations and Authorities in Switzerland

For acquisitions of enterprises and M&A transactions such as share or asset deals,the Swiss Code of Obligations (CO) provides the primary legal framework in Switzerland. Within the CO, particularly in sales law, the provisions are predominantly non-mandatory, offering parties significant freedom to negotiate and customize solutions within purchase agreements.

Mergers fall under the jurisdiction of the Swiss Merger Act, which delineates two primary forms: merger by combination and merger by absorption. In the former, shareholders of merging entities become shareholders of a new consolidated company, while in the latter, shareholders of the acquired entity join the acquiring company's ownership structure. The Swiss Merger Act also governs the compatibility of merging entities, outlines the merger process, and provides for the statutory transfer of assets and liabilities. This transfer mechanism is instrumental in facilitating the sale and transfer of businesses or segments and enabling statutory demergers.

Generally, mergers and acquisitions in Switzerland typically proceed without the need for governmental approvals or permits. However, there are exceptions. Certain significant mergers and acquisitions necessitate notification to or approval from the Swiss Competition Commission. Additionally, mergers and acquisitions within specific industry sectors such as banking, insurance, and telecommunications require notification to or approval from specialized Swiss authorities like the Swiss Financial Market Supervisory Authority.

What Stages Characterize Mergers and Acquisition Processes in Switzerland?

The stages of mergers and acquisition (M&A) transactions in Switzerland encompass four key phases:
Throughout these stages, both legal and financial advisors typically play critical roles in guiding the parties through the process and addressing various complexities and challenges that may arise.

Types of M&A Transactions in Switzerland

In Switzerland, mergers and acquisition transactions come in three primary forms:
  • 1

    Share Deal

    In a share deal, the acquisition is structured around the purchase of shares in the target company. This type of transaction involves acquiring ownership stakes in the company, along with its assets and liabilities. Share deals often entail a transfer of control and ownership without necessitating substantial changes to the target company's legal structure.
  • 2

    Asset Deal

    Alternatively, an asset deal involves the purchase of specific assets and liabilities of the target company, rather than acquiring its shares. This approach allows the buyer to select particular assets and liabilities to acquire, enabling more flexibility and control over the transaction. Asset deals may be preferred in situations, where the buyer seeks to acquire specific business divisions or assets while excluding others.
  • 3

    Statutory Merger

    A statutory merger, also known as a merger by law, entails the consolidation of two or more companies into a single entity. This type of transaction involves a formal legal process governed by Swiss merger laws and regulations. The merging companies combine their assets, liabilities, and operations, resulting in the dissolution of the merging entities and the creation of a new, unified entity.
Each type of transaction offers unique advantages and considerations, depending on the specific circumstances and objectives of the parties involved. By understanding the distinctions among share deals, asset deals, and statutory mergers, stakeholders can effectively navigate the complexities of merger and acquisition transactions in Switzerland and optimize outcomes aligned with their strategic goals.

The Difference Between Public M&A and Private M&A in Switzerland

In Switzerland, the distinction between public M&A and private M&A lies primarily in the manner in which the acquisition is conducted and the entities involved:
Public M&A:

· In public M&A, the acquisition process involves the acquisition of publicly traded companies or entities listed on a stock exchange.

· The acquisition typically occurs through a tender offer, where the acquiring company makes a public offer to purchase the shares of the target company from its shareholders.

· Public M&A transactions are subject to regulatory oversight and disclosure requirements set forth by the Swiss Takeover Board (TOB) and FINMA.

· These transactions often involve larger companies with shares traded on the stock exchange and require compliance with strict regulatory frameworks to ensure transparency and fairness to shareholders.
Private M&A:

· Private M&A involves the acquisition of privately held companies or entities that are not publicly traded on a stock exchange.

· The acquisition process in private M&A transactions is negotiated directly between the parties involved, typically without the involvement of public offers or tender offers to shareholders.

· Private M&A transactions are governed by contract law and involve negotiations over the purchase price, terms, and conditions of the acquisition agreement.

· These transactions may involve smaller to medium-sized companies and offer greater flexibility and confidentiality compared to public M&A transactions.
Throughout these stages, both legal and financial advisors typically play critical roles in guiding the parties through the process and addressing various complexities and challenges that may arise.

The Primary Legal Entities Frequently Engaged in Private Acquisitions in Switzerland

In private acquisitions in Switzerland, two main corporate entities frequently involved are the Aktiengesellschaft (AG) and the Gesellschaft mit beschränkter Haftung (GmbH).
Gesellschaft mit beschränkter Haftung (GmbH):

· A GmbH is a limited liability company, commonly chosen for smaller businesses due to its simpler organizational structure and lower regulatory burdens compared to AGs.

· Similar to an AG, a GmbH offers limited liability protection to its shareholders, shielding their personal assets from the company's liabilities.

· GmbHs are governed by Swiss company law and are subject to less stringent regulatory requirements compared to AGs, making them more accessible for startups and small to medium-sized enterprises (SMEs).

· In a GmbH, ownership is typically held by one or more individuals or entities, known as members or shareholders, and management is carried out by one or more directors.

· While GmbHs may not issue shares to raise capital publicly like AGs, they can still attract investors through private placements or financing arrangements.
Aktiengesellschaft (AG):

· An AG is a stock corporation, characterized by its ability to issue shares and raise capital from public investors.

· It offers limited liability to its shareholders, meaning their personal assets are protected from the company's debts and obligations.

· AGs are governed by Swiss company law and are subject to regulatory requirements and oversight by authorities such as the Swiss Financial Market Supervisory Authority (FINMA).

· Typically, AGs are chosen for larger businesses with significant capital needs or those seeking to publicly trade their shares on the stock exchange.

· They offer flexibility in ownership structure and corporate governance, with shareholders having the power to appoint the board of directors and influence major decisions through voting rights.
Overall, while both public and private M&A transactions involve the acquisition of companies, the key differences lie in the level of regulatory oversight, the manner of conducting the acquisition, and the types of entities involved. Public M&A transactions are characterized by their transparency and adherence to strict regulatory requirements, whereas private M&A transactions offer greater flexibility and confidentiality in negotiations.


In summary, Switzerland stands as a thriving hub for mergers and acquisitions (M&A), boasting a robust economy comprising a dynamic mix of small and medium-sized enterprises as well as major international corporations across various sectors. With its favorable legal framework, Switzerland offers considerable flexibility for M&A activities. Understanding the distinct stages of the M&A process, is crucial for navigating these transactions effectively. And finally, it is highly advisable for stakeholders to seek legal assistance to ensure compliance and optimize outcomes when undertaking M&A transactions in Switzerland.

Frequently Asked Questions

M&A activities in Switzerland are primarily governed by the Swiss Code of Obligations (CO) and the Swiss Merger Act.