Shareholders’ agreements in Switzerland: clauses and practical example

What does a shareholders’ agreement do?

Company law does not settle every arrangement founders may wish to make. What happens if one founder stops working after six months? Who may buy their stake? How do two equal owners resolve a lasting disagreement?

The agreement provides a contractual framework. It may bind all owners or only some, so identify who is bound by each obligation and how future investors join.

It is generally private and is not filed with the commercial register in the same way as the articles. That privacy does not automatically bind the company, third parties or a buyer who has not signed it. Discuss the commercial arrangements first, then translate them into appropriate Swiss contractual language.

Agreement, articles, employment and loans

The articles of association and shareholders’ agreement must work together. A voting commitment does not transfer the board’s statutory powers to shareholders. Nor can an agreement authorise dividends contrary to capital-protection rules.

In an LLC (Sàrl/GmbH), both a transfer of membership interests and an undertaking to transfer them require written form. Members’ approval is generally required, subject to legally permitted provisions in the articles. Do not assume an SA/AG share-transfer clause works unchanged for an LLC. The differences between an LLC and an SA affect the drafting.

For an LLC, coordinate the agreement with the manager’s duties and signing powers. A private agreement cannot simply remove mandatory company-law responsibilities.

Clauses to prepare first

Decisions and information

Identify matters requiring enhanced consent: a new investor, substantial borrowing, sale of an activity or a strategic change. Specify access to financial information, reporting frequency and confidentiality.

Avoid making every operating decision unanimous. A veto should protect an identified interest and respect the legal powers of the company’s governing bodies.

Transfers and exit rights

A pre-emption right gives a purchase priority when specified conditions arise. A call option can entitle someone to require a transfer in defined circumstances. State the triggering event, price and deadlines; these are not interchangeable mechanisms.

Tag-along rights let minority owners participate in a qualifying sale. Drag-along provisions can require a joint sale under agreed conditions. Thresholds, warranties and payment terms matter as much as the clause’s label.

Work, competition and intellectual property

If founders work in the business, address what leaving employment means for ownership. An obligation to sell should not be assumed. Tailor confidentiality, competition restrictions and rights over created material to the activity and applicable law.

Set the exit price and fund the purchase

“Fair value” leaves important questions unanswered: the valuation date, financial statements used, method and dispute-resolution process.

Specify a valuation method, an independent expert where appropriate, and how disagreements are resolved. Normalised earnings, cash, debt, non-operating assets and dependence on a founder may all affect the analysis.

Review the available funding at the same time. A high valuation does not mean the remaining owners can pay immediately. Instalments need agreed due dates, possible interest and security.

A buyback by the company itself can be limited by company law and have tax consequences. Do not promise an unconditional company-funded purchase. Review its effect on cash and the company’s capital and equity together.

Example: two founders each own 50%

Illustration: Léa and Marc start a Geneva service company with equal ownership. Léa manages delivery; Marc develops sales. Both initially work full time.

They must still choose deadlines, thresholds and methods suited to their resources. Copying another business’s figures is unlikely to help.

A reciprocal buy-sell clause, where one founder names a price and the other chooses whether to buy or sell, may appear balanced. Yet it can severely disadvantage the founder with less access to finance. A symmetrical formula does not guarantee economic fairness.

This is a discussion framework, not a ready-to-sign contract. Connect it to the ownership, responsibilities and funding assumptions in your business plan.

Plan for difficult events and contract duration

Test more than a voluntary sale. Consider long-term illness, death, divorce, personal insolvency, serious misconduct, reduced working hours and urgent funding needs.

For each event, state who informs whom, what evidence is required, who decides, the deadline and how operations continue. Vague wording can move the dispute to whether the triggering event occurred.

Decide the agreement’s term, renewal, termination and surviving obligations after a signatory leaves. The legal treatment depends on the agreement’s content; “valid forever” does not by itself make a clause robust.

The aim is also to reduce improvised decisions during difficult circumstances, not only to protect against deliberate misconduct.

Prepare an agreement tailored to the company

Begin with a plain-language working document. Founders should understand and approve the mechanics before discussing legal drafting.

1. List owners, stakes and roles.
2. Gather the articles and existing commitments.
3. Identify reserved decisions and exit scenarios.
4. Define valuation and purchase funding.
5. Have a Swiss legal professional coordinate the clauses.
6. Sign with the necessary schedules and organise accession by future owners.

Keep a signed copy accessible to the relevant people. Review it when an investor joins, the activity changes materially or a founder’s involvement changes.

Formation can be prepared through our LLC formation and SA formation services. A bespoke shareholders’ agreement requires a separately agreed scope.

Frequently asked questions