The liquidation procedure varies depending on the company’s legal structure. For example, unincorporated companies like sole proprietorships can be liquidated by simply deleting the company from the trade register, if the obligation to register it even existed.
For partnerships, the liquidation procedure is usually rather simple with a notification of the partners to the commercial register.
Closing an incorporated company such as a SA, a limited liability company (SàRL) or a cooperative company is a more difficult process that involves several steps as described below.
Decision to liquidate in certified form
The decision to liquidate a company must be made by its shareholders during a general meeting. The vote to liquidate the company must reach either an ordinary or a qualified majority, as required by the company statutes (for an SA) or two thirds of the vote and an absolute majority of the capital (for an SàRL).This decision must be made in a notary’s presence. The notary then proceeds to record it in a certified form document and informs the commercial register (please see below registration of the liquidation).
Appointment of the liquidator
During the general meeting, the shareholders appoint a liquidator who is responsible for liquidating the company. The liquidator can also be appointed by a court, given the shareholders want this and there are good reasons for doing so. The liquidator must be domiciliated in Switzerland and might be responsible of the potential debts of the company in liquidation.
Registration of the liquidation
The company must inform the commercial register of its liquidation in process in order for the commercial register to update its files. The document must be signed by a member of the board of directors authorized to sign on their own, or by two members. After this step, the name of the company will be followed by "in liquidation".
Call to creditors
The liquidator must contact the Swiss Official Gazette of Commerce (SOGC) with the assistance of a notary in order to publish 3 calls to creditors, one per day for three days. The aforementioned publication exists to inform all the creditors of a company being liquidated of its liquidation, and to let them know they must make their claims within the following year.
At this stage, the actual liquidation process starts and can sometimes last for years (minimum one year). The liquidator has to prepare a balance sheet containing all the assets and debts, including debt claims arising from creditors responding to the publication on the SOGC.
The company completes its final business period and pay any outstanding tax on it.If assets no longer cover the debts, the liquidator contacts the court to pronounce the company’s bankruptcy. If any assets remain when debts are paid, the liquidator distributes them among the shareholders in proportion to their parts, also considering the potential preferential rights attached to their shares in the company. This payment is subject to Swiss withholding tax of 35 %, like any dividend.