Shareholders’ agreements in Switzerland: key clauses and practical examples

A shareholders’ agreement sets out the rules agreed between the owners of a business. In Switzerland, the French terms are convention d’actionnaires for a company limited by shares (SA/AG), also known in German as an Aktionärbindungsvertrag, and convention d’associés for a limited liability company (Sàrl/GmbH, or LLC). The owners of an LLC are also referred to as members. Both agreements answer practical questions: how much time will each founder contribute, which decisions must be made together, and what happens if someone wants to leave?

A shareholders’ agreement deals with these situations before they become disputes. Its value lies in clear answers, rather than its length: who decides, who can sell, how is the price calculated, and who will finance an exit?

Shareholders’ agreement, articles and contracts: what does each do?

The articles of association provide the company’s legal framework. They cover its identity, capital and aspects of its organisation. Amending them requires a formal procedure.

The shareholders’ agreement sets out the commitments the signatories make to each other: voting in a particular way, offering their shares to specified owners first, following exit arrangements or providing information. It is generally private, although confidentiality does not prevent disclosures needed for professional advice, financing or legal proceedings.

An employment contract covers duties, pay and employment conditions. A loan agreement sets the terms of repayable funding. Combining all these subjects in an informal promise leaves important questions unanswered.

Voting in breach of an agreement may make a signatory liable under the contract without automatically invalidating the company resolution. This is why the documents need to work together.

An important difference between an LLC and an SA/AG

In an LLC, certain ancillary obligations and a prohibition on competition can be included in the articles, within the limits of Articles 796 and 803 of the Code of Obligations (CO). They then also apply to new members. In an SA/AG, the articles cannot impose personal obligations on shareholders beyond paying for their shares (Article 680 CO). Work commitments, funding obligations and non-compete arrangements therefore need to be organised by contract.

Who should sign, and when?

Ideally, discuss the agreement before incorporating the company or acquiring shares. The partners can still resolve differences before committing all their resources.

Not every shareholder has to sign for a contract to exist between some of them. However, owning shares does not automatically bind a person who has not signed. If the arrangements are intended to cover all owners, arrange for each of them to join the agreement, including future investors.

The company may itself be a party to certain commitments where appropriate and legally valid. Its signature does not override capital protection rules or the non-transferable duties of its governing bodies.

Review an existing agreement when raising funds, changing roles, planning a departure or acquisition, or dealing with a marriage or death that affects ownership. A new investor can change the balance even if the original document seemed complete.

Organising decisions and information

Reserve joint approval for decisions that matter

Enhanced approval requirements can be useful for a major investment, unusual borrowing, sale of a business activity, admission of an investor or transaction with a related party.

Tailor the list to the business. Requiring unanimity for every equipment purchase can bring operations to a halt. An excessively high spending threshold, however, may allow major decisions to pass without discussion.

Define the amounts, the reference period and how linked transactions are treated. Otherwise, an investment could be split artificially into several invoices to stay below the threshold.

Provide information people can use

An owner who does not work in the business still needs to understand its progress. The agreement can require budgets, periodic accounts, cash-flow updates and information about significant commitments, in addition to statutory information rights.

Set a realistic timetable. A simple report delivered regularly is more useful than sophisticated reporting that nobody produces. Also address commercial confidentiality and access to information if the owners’ interests diverge.

Resolve disagreements before they become deadlocks

A staged process might start with a dedicated meeting, allow time for discussion and then move to mediation. If the disagreement continues, an exit procedure may be needed.

Compulsory purchase and sale clauses need particular care. A mechanism in which one owner sets a price and the other chooses whether to buy or sell may look balanced. In practice, it can disadvantage the person who cannot obtain finance. Legal symmetry does not necessarily create economic fairness.

Work commitments and funding

What the founders commit to doing

Specify the time devoted to the business, responsibilities, permitted outside activities and ownership of intellectual property. What happens if an owner reduces their involvement? Who owns the software code, marketing materials or brand?

If shares also reward future work, decide what happens when that work stops. Vesting means acquiring rights progressively. With reverse vesting, shares have already been granted, but some may be repurchased on agreed terms if the founder leaves early.

Good leaver and bad leaver provisions distinguish different departures and their effects on the price. Define the actual events: an agreed departure, lasting incapacity, resignation or serious breach of an obligation. A disagreement between owners should not automatically be treated as misconduct. Specify the triggers, price and procedure, then assess the legal, tax and social insurance consequences.

Dismissal does not automatically end share ownership. Equally, selling shares does not automatically terminate employment. Write down how the two events are coordinated.

What happens when more money is needed?

If the company needs further funding, can each owner choose whether to participate? Is there a commitment to contribute a specific amount? Will the funding be a loan, a capital increase or another arrangement?

Avoid a vague promise that “everyone will contribute whatever is needed”. Set a limit, triggers, payment dates and the consequences of refusing. A contractual commitment does not remove the legal requirements of the transaction itself.

Salary and dividends

An owner who works in the business may receive a salary for that work and a dividend as an owner, provided the distribution conditions are met. An owner who does not work in the business is not automatically entitled to the same salary.

A dividend policy can help balance reinvestment and returns. It must leave room for actual cash needs, legal restrictions and a decision by the competent company body. Promising to distribute all profits every year may weaken the business.

Managing share transfers and exits

Pre-emption rights, purchase options and approval

A pre-emption right gives its holder priority, as defined in the clause, when a signatory wants to sell shares to a third party. Specify the information to be provided, deadlines, price and treatment of bundled sales.

A call option (right of purchase) allows its holder to buy the shares on the agreed terms when the specified conditions are met. Its effect depends on the wording: it is different from simply having priority when shares are offered for sale.

Transfer approval concerns consent to the transfer. The rules differ between an LLC and an SA/AG and must be coordinated with the articles. An agreement cannot simply remove a statutory transfer formality.

Tag-along and drag-along rights

A tag-along clause can protect a minority owner by allowing them to sell alongside a majority owner under defined conditions. Specify which shares are covered, the financial terms and what happens if the buyer refuses.

A drag-along clause can require other signatories to participate in a sale once the agreed conditions are met. The triggering thresholds, price, seller warranties and treatment of conflicts of interest are essential.

Do not overlook warranties: a small shareholder who has no operational role will not necessarily know as much about the business as its controlling manager.

An LLC agreement does not itself complete a share transfer

Both the undertaking to transfer LLC shares and the transfer itself must be in writing (Article 785 CO). Approval by the members’ general meeting is normally required, subject to arrangements in the articles permitted by law (Article 786 CO). Prepare the purchase promise and the formalities that make the transfer effective together.

Setting the price and arranging payment

Saying shares will be bought at “fair value” often postpones the discussion until the worst possible moment. A useful clause defines the valuation date, methods, adjustments and how an expert will be appointed if the parties disagree.

For a small business, management remuneration, exceptional expenses, dependence on one customer and shareholder loans can materially affect value. An earnings multiple only makes sense if the earnings figure is clearly defined.

Example. Two owners each hold 50%. Their chosen method produces an equity value of CHF 400,000. The departing owner’s holding is therefore worth CHF 200,000 under that method. This does not mean the remaining owner has CHF 200,000 available, or that the company can legally and financially pay it on their behalf.

Next, decide:

• who will buy: the remaining owner, a third party or, where legally permitted, the company itself;
• whether payment will be immediate or in instalments;
• which security will protect the seller;
• when the shares and voting rights will transfer;
• what happens to shareholder loans and personal guarantees.

The company cannot always act as a fallback buyer. The ordinary limit on holding its own shares is 10% of the capital, backed by sufficient freely disposable equity. For an LLC, the limit can rise to 35% in connection with transfer restrictions, a member’s withdrawal or exclusion. For an SA/AG, it can rise to 20% in connection with restrictions on transferability or an action for dissolution. In these cases, the portion above 10% must be sold or cancelled through a capital reduction within two years (Articles 783 and 659 CO).

In the 50/50 example, simply promising that “the company will buy the departing owner’s 50%” therefore does not work as an ordinary own-share purchase. Plan for another buyer or an appropriate legal transaction.

Include tax in the buyout calculation. A company’s purchase of its own shares can be treated as a partial liquidation, particularly where legal limits are exceeded or depending on how long the shares are held. Withholding tax of 35% may then apply to the portion treated as a liquidation surplus. Do not automatically apply 35% to the entire price: examine the capital repaid and the conditions of the transaction (Article 4a of the Withholding Tax Act (French)).

Death, incapacity and the duration of the agreement

An owner’s death can leave heirs in a situation they did not choose. Coordinate the agreement with inheritance law, the articles and the parties’ objectives. Insurance may help finance a buyout, but it does not replace the legal mechanism or an assessment of the funding needed.

Lasting incapacity deserves a separate clause covering its duration, how it is established, operational responsibilities, income and the shares. Automatically treating incapacity as misconduct is rarely a balanced solution.

Set out the term, renewal, termination arrangements and obligations that continue after departure. There is no universal twenty-year maximum term or six-month notice period for all shareholders’ agreements. Where an agreement qualifies as an indefinite simple partnership and the statutory regime applies, Article 546 CO provides for six months’ notice, subject to conditions concerning good faith and timing. Assess the contract’s legal classification and terms before adopting that period. Article 27 of the Civil Code also limits excessive restrictions on personal freedom.

Making commitments enforceable with a contractual penalty

A contractual penalty sets a financial consequence in advance for a defined breach, such as selling shares without respecting pre-emption rights. Specify the obligation, the amount or calculation, and its relationship with performance of the contract. Unless another rule or agreement applies, the creditor must choose between performance and the penalty. A court may reduce an excessive penalty (Articles 160 and 163 CO). A specific, quantified provision is more useful than a general threat.

For a non-compete clause, identify the interest to protect and a proportionate scope. The rules may differ depending on whether the restriction arises from employment or the ownership relationship. A broad, unlimited restriction copied from an overseas template may be unsuitable.

Preparing an agreement that works in practice

Complete this worksheet before drafting the agreement

Each owner should answer separately first. Then compare answers and record the points agreed. This worksheet helps prepare the drafting; it is not itself an agreement.

Before commissioning a draft, prepare a shared brief covering ownership, roles, sensitive decisions, planned funding, possible departures and the preferred valuation method. Resolve substantive disagreements before asking a drafter to turn your decisions into clauses.

Have the agreement reviewed for its suitability under Swiss law. Its financial practicality deserves the same attention. Entreprendre.ch can help you structure your business project and prepare the relevant financial information.

The annotated ten-part planning template

The PDF follows a complete discussion: signatories and documents; roles; decisions and information; funding; voluntary sales; departure, death or incapacity; price and payment; confidentiality and competition; duration and penalties; dispute resolution. Each topic sets out questions to decide and pitfalls to avoid.

Planning to form a Swiss LLC or set up an SA/AG? Discuss these issues before incorporation. For an exit, our support with transferring LLC shares helps coordinate decisions and formalities.

Sources and references

• Swiss Code of Obligations: contract law, Articles 659 onwards, 680, 685a onwards, 785–786 and 783.
• Swiss SME Portal: shareholders’ agreements.
• Swiss SME Portal: minimum requirements for articles of association.
• CO, Articles 160 and 163: contractual penalties
• CO, Article 546: termination of an indefinite simple partnership
• Withholding Tax Act (French), Article 4a: a company’s acquisition of its own equity interests

References checked on 6 November 2026. The examples and amounts are illustrative.