Accounting for a Swiss AG: what company law requires

The company limited by shares — AG in German, SA in French and Italian — is the legal form for businesses that want to be able to bring in investors or transfer their shares easily. Its accounting resembles that of a GmbH, with higher capital, rules on treasury shares and, since the 2023 revision of Swiss company law, a few new tools. This guide sets out what you need to know.

Full accounting

An AG keeps full commercial accounts — in practice, double-entry bookkeeping — and prepares annual financial statements every year: balance sheet, income statement and notes (Art. 957 para. 1, 958 ff. CO). Large companies, which are subject to an ordinary audit, also prepare a cash flow statement and a management report (Art. 961 CO). The annual report is prepared and submitted to the general meeting within six months of the financial year-end (Art. 958 para. 3 CO); books and supporting documents must be kept for ten years (Art. 958f CO).

Share capital

• Minimum share capital: CHF 100,000 (Art. 621 CO). Since 2023, it may be denominated in an approved foreign currency if that is the currency most important to the business; the accounts are then kept in that currency (Art. 621 para. 2 CO).
• Paying in: at least 20% of the nominal value of each share, and at least CHF 50,000 in total (Art. 632 CO). The unpaid portion is shown under assets as a receivable from shareholders.
• Capital band (since 2023): the articles of association may authorise the board of directors, for up to five years, to increase or reduce the share capital between a lower limit of at least half and an upper limit of at most one and a half times the registered capital (Art. 653s CO). Changes are disclosed in the notes.

Reserves and treasury shares

• Statutory retained earnings (the legal reserve from profit): 5% of the annual profit, after offsetting any losses carried forward, until it reaches, together with the statutory capital reserve, half of the share capital — 20% for a holding company (Art. 672 CO). The former second allocation, calculated on dividends, was abolished by the 2023 revision.
• Treasury shares: an AG may hold up to 10% of its share capital as treasury shares, provided it has freely disposable equity — up to 20% in certain cases, to be brought back down to 10% within two years (Art. 659 CO). Their voting rights are suspended, and they are shown at acquisition cost as a deduction from equity (Art. 659a CO).
• Equity is presented in the order set by law: share capital, statutory capital reserve, statutory retained earnings, voluntary reserves, profit or loss carried forward, and own shares as a deduction (Art. 959a para. 2 CO).

Dividends

Dividends may only be paid out of the balance sheet profit and out of reserves created for that purpose, after the allocations to the statutory reserves (Art. 675 CO). The general meeting approves the accounts and sets the dividend (Art. 698 CO); if the company is subject to audit, the audit report must be available before the resolution, otherwise the resolution is void (Art. 731 CO). Since 2023, the general meeting may also resolve an interim dividend on the basis of interim accounts, which in principle are audited (Art. 675a CO).

A dividend is subject to 35% withholding tax, withheld by the company and paid to the FTA (Federal Tax Administration). Repayments of capital contribution reserves — contributions made by the shareholders, booked to a separate account and reported to the FTA — are exempt from it, under certain conditions (Art. 5 para. 1bis WHTA).

Shareholder current account. Loans and advances between the AG and its shareholders go through a current account; interest must stay within the rates the FTA publishes each year, otherwise the tax authorities may reclassify the difference as a hidden profit distribution.

Audit

• Ordinary audit if, in two consecutive financial years, two of the following three thresholds are exceeded: a balance sheet total of CHF 20 million, turnover of CHF 40 million, 250 full-time positions on an annual average (Art. 727 CO).
• Limited audit in all other cases (Art. 727a CO).
• Opting out: possible with the consent of all shareholders, if the company has no more than 10 full-time positions on an annual average. Since 1 January 2025, an opt-out only applies to future financial years, and its entry in the commercial register must be applied for before the start of the financial year concerned (Art. 727a paras. 2 and 2bis CO).
• Shareholders representing at least 10% of the share capital may require an ordinary audit (Art. 727 para. 2 CO).

Capital loss and over-indebtedness

The board of directors monitors the company's solvency and acts without delay if it is at risk (Art. 725 CO). Capital loss: when the last annual financial statements show that the assets, after deducting liabilities, no longer cover half of the share capital and of the non-repayable statutory reserves, the board takes restructuring measures; an AG that has opted out of the audit must then have its financial statements audited by a licensed auditor before they are approved (Art. 725a CO). Over-indebtedness: where there is serious concern, interim accounts are drawn up at going-concern values and at liquidation values; if the liabilities are no longer covered, the board notifies the court, unless creditors subordinate their claims or a restructuring is possible within 90 days (Art. 725b CO).

VAT and taxes

An AG becomes liable for VAT once its taxable turnover reaches CHF 100,000 a year. It is taxed on its profit and on its capital: direct federal tax is levied at 8.5% of net profit (Art. 68 DFTA) — since the tax is itself deductible, the effective federal burden is around 7.8% of pre-tax profit. Cantonal and communal taxes on profit and capital come on top and vary from one canton to another; there is no federal capital tax.

How BeMyTalent adapts

When you activate accounting, you choose the legal form Company limited by shares (SA / AG). The chart of accounts then includes 2800 Capital-actions (share capital), 2870 Propres actions (treasury shares), the statutory and voluntary reserves, 2260 Dividendes dus (dividends payable) and 2210 Impôt anticipé dû (withholding tax payable) to book a distribution, and a shareholder current account; the private accounts of a sole proprietorship are hidden.

Supplier invoices read and proposed as entries, payments reconciled, VAT prepared, full payroll, supplier payments as a pain.001 file: the day-to-day work moves forward on its own, and the year-end closing carries the result into equity. The balance sheet and income statement are ready for the general meeting and for the audit firm.

BeMyTalent does not replace your fiduciary: it takes the data entry off their hands. You keep the final say on every entry.

Other legal forms: GmbH (Sàrl), simple partnership, association, foundation. To compare tools: our comparison of Swiss accounting software.

FAQ

How much capital do you need to set up an AG?

At least CHF 100,000 of share capital, of which at least 20% of each share and CHF 50,000 in total must be paid in at incorporation (Art. 621 and 632 CO).

Does an AG need an audit firm?

Yes, unless it opts out: an ordinary audit if two of the three thresholds (CHF 20 million balance sheet total, CHF 40 million turnover, 250 full-time positions) are exceeded in two consecutive financial years, a limited audit otherwise. With no more than 10 full-time positions and the consent of all shareholders, an AG can opt out of the audit, for future financial years (Art. 727a CO).

Can an AG pay a dividend during the year?

Yes, since the 2023 revision: the general meeting may resolve an interim dividend on the basis of interim accounts (Art. 675a CO). These accounts are audited, unless the company has opted out of the audit or all shareholders consent and creditors' claims are not put at risk.

What is the accounting difference between an AG and a GmbH?

Little in the day-to-day bookkeeping: the same full accounts, the same annual financial statements, the same statutory reserve. The differences lie in the capital (CHF 100,000 versus CHF 20,000), in the rules on treasury shares, and in the capital band, which is reserved for the AG. Accounting for a GmbH.

Try BeMyTalent free — choose “Company limited by shares (SA / AG)” when you activate accounting, and the chart of accounts adapts. → Start the trial