Becoming a partner in a company in Switzerland or transferring existing shares is not as simple as “passing a share certificate from hand to hand.” Especially in processes such as investment, partnership changes, intra-group restructuring, or exit processes, the legal validity of the share transfer has critical consequences in terms of dividends, voting rights, management control, and even commercial registry records. In Swiss law, the process varies significantly depending on the type of company: the freedom of transfer, approval mechanisms, and registration obligations are not the same between AG (Aktiengesellschaft) and GmbH (Gesellschaft mit beschränkter Haftung).
This article discusses how share transfers are conducted in AG and GmbH within the framework of the Swiss Code of Obligations (CO), what documents are required, at which stages the company organs come into play, and the most common mistakes made in practice step by step.
The basic logic of share transfer: “Contract” is separate, “transfer of ownership” is separate
The key to understanding share transfer correctly in Swiss practice is the two-layer structure of the transaction:
- Commitment transaction: The part of the sale/agreement where the parties say “I sell – I buy.” This stage can often be done verbally or in writing; however, a written contract is strongly recommended for proof and risk management.
- Disposal transaction: The part that actually transfers the ownership of the shares, subject to formal requirements. Here, the critical document is the written declaration of assignment (declaration of assignment / Abtretungserklärung).
Even if the parties have paid the sale price, if there is no formally correct declaration of assignment/transfer, the buyer does not become a shareholder legally. In this case, the buyer cannot exercise shareholder rights such as dividends, voting rights, and liquidation shares and may face issues when entering the share register (AG) or commercial registry (GmbH).
Declaration of Assignment (Abtretungserklärung): Why is the formal requirement so important?
In Switzerland, especially in private companies, the backbone of share transfer is the written declaration of assignment. A notary requirement is not generally sought; however, the form of the document must be prepared meticulously.
What must be included in a valid declaration of assignment
- Written form: A wet-signed written document or a document signed with a Qualified Electronic Signature (QES) in PDF format.
- Clear definition of shares and company: It must be clear which shares of which company are being transferred (such as number of shares/nominal value and share class if any).
- Intention to transfer: The seller’s (transferor’s) intention to “transfer” must be clearly understood.
- Party information and date: Identifying information such as name, address, and date plays a critical role in identification and chronology.
An important distinction in practice: In most scenarios, the buyer’s signature is not mandatory in the declaration of assignment; the transferor’s signature and compliance with form are decisive. Nevertheless, for transaction security, the buyer’s signature and a comprehensive share transfer agreement are generally preferred.
How is share transfer done in AG (Public Company)?
The AG structure is generally designed with the logic of more freely transferable shares. However, this freedom is not “at all costs”; the articles of association (Articles of Association – AoA) and the type of shares affect the process.
1) Check the type of shares and restrictions (registered vs. bearer)
In private (non-public) AGs, registered shares are often found. In registered shares, it is expected that the shareholder relationship is managed through company records. The articles of association may grant the board of directors approval authority, especially for non-public registered shares.
2) Complete the transfer transaction formally
- If a share certificate is printed, in practice, the transfer is structured with endorsement and/or a written declaration of assignment.
- If no share certificate is printed, the transfer generally proceeds with a transfer of rights logic: a written declaration of assignment is prepared and delivered to the buyer.
3) Board of directors’ approval and entry in the share register
For registered shares, the entry in the share register is a critical step for the buyer to be recognized as a shareholder against the company. As indicated in research data, although the registration is often “non-constitutive,” it becomes practically decisive for the use of administrative rights and internal company transactions.
Can a transfer be rejected in AG?
The articles of association may allow the board of directors not to grant approval for the transfer of non-public registered shares. In such arrangements, the company or third parties may use the model of blocking the transfer by making a purchase offer based on “real value.”
Exceptions: Approval is not required in every case
In certain legal transition cases (e.g. inheritance, estate distribution, dissolution of property regime, or enforcement scenarios), approval conditions may vary.
How is share transfer done in GmbH (Limited Company)?
The GmbH offers a more “closed” structure in terms of ownership. Therefore, share transfers are subject to more control compared to AG. According to the framework in research data, two elements stand out: approval of the partners’ council and updating the commercial register.
1) Requirement for a written transfer agreement/assignment agreement
In GmbH, a written assignment agreement (CO Art. 785 approach) is a fundamental requirement for share transfer. Here, not only the sales contract but also the written documentation that completes the legal transfer is important.
2) Partners’ council approval: Key threshold
For share transfer in GmbH, general assembly/partners’ council approval is generally required (CO Art. 786 approach). The important point to note is that approval can be rejected without justification. This feature makes GmbH advantageous for investors who want to protect the partnership structure, while it increases the process risk for shareholders who want to exit.
The articles of association or the shareholders’ agreement can lighten or intensify this regime. For example:
- Pre-emption or the company’s obligation to repurchase
- Prohibition of transfer without meeting certain conditions
- Conditioning on performance targets, non-competition commitments, etc.
3) Updating the commercial register (mandatory)
In GmbH, it is necessary to update the commercial register after the transfer. This step should not be seen merely as a “notification”; it plays a fundamental role in terms of transparency and enforceability against third parties in Switzerland.
Step-by-step practical process: Common checklist for AG and GmbH
Although the type of company differs, a well-managed share transfer project follows a similar methodology:
- Agreement on commercial terms: Price, payment plan, closing conditions, representations & warranties are clarified. In private companies, a comprehensive Share Purchase Agreement (SPA) often reduces the risk of disputes.
- Analysis of internal restrictions: Provisions such as approval, pre-emption, drag-along/tag-along in the articles of association (AoA) and any shareholders’ agreement are checked.
- Obtaining approvals: In AG, the board of directors’ approval and share register procedure; in GmbH, the partners’ council decision and registry steps are planned.
- Documentation of transfer in accordance with form: A written declaration of assignment/assignment agreement is prepared; if QES will be used, signature compliance is ensured.
- Updating records: Processing in the share register in AG; completing the update of the commercial register in GmbH.
Risks of non-compliance and incorrect structuring: The “I thought I became a shareholder” scenario
The most costly mistakes in share transfer usually arise from neglecting formal and registration steps under the assumption that “the commercial part of the job is done.” As emphasized in research data, in an improperly structured transfer, the buyer cannot acquire ownership; therefore:
- Dividends and voting rights cannot be exercised, and authority disputes arise in the general assembly.
- Entry in the share register or registry processes get blocked.
- General assembly decisions become contentious; in some cases, decisions may be subject to annulment within certain periods.
Do foreign buyers face additional barriers in share transfer?
According to the framework in research data, there is no general prohibition on share transfers for foreign buyers in Swiss corporate law. However, sectoral regulations, banking relationships, KYC/compliance checks, and the company’s internal agreements (AoA / shareholders’ agreement) may practically create additional documentation and time requirements.
Critical note for 2025: Ban on share transfers of “shell companies”
Switzerland has introduced restrictions on share transfers of “shell companies” (inactive companies) as part of regulations aimed at combating “abusive bankruptcy” that came into effect on January 1, 2025. This change shows that the scenario of “taking over an existing company and using it quickly” is not risk-free in every case.
Therefore, if a company acquisition or share transfer is planned in Switzerland, the target company’s active operational status, organizational reality, and legal compliance should be examined separately. For an official summary of the framework of the issue and current practices, reference can be made to the guide content on kmu.admin.ch.
Cost and tax dimension: Why it should be planned from the beginning?
The cost of share transfer is not only about “company valuation and price.” In practice, cost items expand to legal documentation, company organ decisions, registry processes, due diligence, and compliance checks. In an incorrectly structured scenario, the cost turns directly into the risk of disputes and transaction cancellation.
The tax dimension varies according to the structure of the transfer: Factors such as who transfers the shares (individual/company), whether it is intra-group or to a third party, closing conditions in the contract, and the structure of payment (installment, earn-out, etc.) determine the overall impact. Therefore, share transfer should not be considered independently of the company’s international structural planning.
Corpenza perspective: Share transfer is often part of a larger “international structure” decision
Although share transfer in Switzerland may seem like a “legal transaction” on its own, it often comes with the following objectives: entering a new market, intra-group restructuring, establishing a company in Switzerland, setting up operations in Europe, residency/corporate establishment planning, payroll, and employment structuring.
Corpenza serves as a business development and mobility partner that can handle processes end-to-end; it supports you in evaluating company establishment in Switzerland and Europe, international accounting and payroll/EOR, and global mobility in the same picture as critical corporate change points like share transfer. Proper structural planning ensures that the share transfer is not only “valid” but also operationally sustainable.
Conclusion: “Freedom” prevails in AG, while “control” prevails in GmbH
To summarize:
- AG: Shares are generally more freely transferable; however, the articles of association and share type, board of directors’ approval, and share register practices affect the process.
- GmbH: Transfer is more controlled; partners’ council approval and updating the commercial register play a central role.
- In both structures, without formally compliant written declaration/transfer documentation, the buyer cannot safely exercise shareholder rights.
To securely close the transaction, legal formal requirements, internal approval mechanisms, and registration steps must be planned from the beginning as much as the commercial part of the contract.
Disclaimer
This content is for general informational purposes; it does not constitute legal, tax, or financial advice. Legislation and practices may change over time; results may vary depending on the type of transaction and the company’s articles of association/shareholders’ agreement. We recommend checking current official sources before making decisions and seeking professional support from qualified legal/tax experts in Switzerland.
