What is Articles of incorporation?
Articles of Incorporation (also known as Memorandum of Association or Charter) are a legal document that establishes the formation and governance structure of a company. In Switzerland, the Articles of Incorporation are required for businesses like corporations (AG/SA) and limited liability companies (GmbH/SARL) and are filed with the Swiss Commercial Register. The document outlines the company’s purpose, governance, and operating rules.
Key Components of Articles of Incorporation in Switzerland
- Company Name and Legal Form
The document specifies the official name of the company and its legal structure (e.g., AG, GmbH, or Sarl). - Company Purpose
The Articles define the company’s primary business activities and the scope of its operations. This section ensures that the company operates within the legal limits of its stated purpose. - Share Capital
It outlines the company’s share capital, the division of shares, and the number of shares issued. For example, an AG requires a minimum share capital of CHF 100,000, and a GmbH needs at least CHF 20,000. - Board of Directors and Management
The Articles specify the structure of the company’s board of directors and management, including the number of members and their roles, responsibilities, and powers. - Registered Office
The location of the company’s registered office, which must be within Switzerland, is listed in the Articles. - Shareholder Rights and Obligations
The document outlines the rights and responsibilities of shareholders, such as voting rights, dividends, and procedures for transferring shares. - Profit Distribution
Rules for how profits will be distributed among shareholders, typically through dividends, are also included.
Importance of Articles of Incorporation
- Legal Foundation: The Articles serve as the legal foundation for the company, establishing its structure and governance framework.
- Regulatory Compliance: Required by Swiss law to officially register and operate a corporation or LLC in Switzerland, ensuring compliance with local regulations.
- Clarity and Transparency: They provide clarity for shareholders, employees, and regulatory authorities, outlining the company’s operational rules and corporate governance principles.
In Switzerland, the Articles of Incorporation are crucial for ensuring that businesses are legally recognized, structured correctly, and compliant with national and cantonal regulations.