“Let’s split it fifty-fifty” often seems the simplest solution. It can work very well when founders share the same project, make comparable commitments and agree how decisions will be made. It becomes fragile when expectations differ about work, funding or the ability to leave.
Splitting equity means organising ownership of the business, not simply dividing the money paid in at incorporation. Plan for what happens if one founder works less, an investor joins or an important decision divides the owners.
Key points
- Ownership percentage, salary, shareholder loans and decision-making power answer different questions.
- The nominal value of shares or LLC interests is not the economic value of the business.
- Equal ownership can work, but needs a way to resolve disagreements.
- A promise of future work does not, by itself, count as a contribution paying up share capital.
- Test future scenarios before fixing percentages: departures, financing and dilution.
What does an ownership interest represent?
In a Swiss LLC (Sàrl/GmbH), capital is divided into ownership interests, called capital contributions in the English Code of Obligations. In a company limited by shares (SA/AG), it is divided into shares. An ownership interest carries economic and membership rights according to the law, the articles and the terms of the securities.
For identical ordinary interests, the capital split generally determines the division of dividends and votes. Special provisions can alter that relationship. Holding 30% of the capital does not always mean exactly 30% of the votes or an immediate right to 30% of the bank balance.
A dividend requires, among other things, distributable funds and a valid resolution. Work is normally remunerated through a salary or another appropriate contractual arrangement. Equity represents a long-term investment and exposure to the risks of ownership.
Nominal capital and business value
Calculating the percentage: divide the nominal value held by total capital and multiply by 100. Owning 12 interests of CHF 1,000 out of 20 identical interests gives 12 ÷ 20 × 100 = 60%.
Two founders form an LLC with CHF 20,000 of capital, split 60/40. Their interests have nominal values of CHF 12,000 and CHF 8,000. A few years later, the business may be worth much more or much less. Registered capital indicates neither the price at which the interests could be sold nor the cash available.
Likewise, contributing CHF 100,000 does not necessarily increase nominal capital by CHF 100,000. Depending on the transaction, part may be a premium or a loan. These structures have different legal, accounting and tax effects.
Separate four types of contribution
Before discussing percentages, identify what each founder brings. This prevents every difference in funding or effort becoming a dispute about ownership.
| Contribution | Question to settle | Possible arrangement |
|---|---|---|
| Money permanently exposed to business risk | Who provides funding and bears ownership risk? | Capital and, depending on the transaction, an issue premium |
| Money advanced temporarily | What maturity, interest and repayment ranking apply? | A documented shareholder or member loan |
| Work performed in the business | What tasks, time commitment and remuneration are expected? | Employment contract or another suitable agreement |
| Software, a brand, equipment or another asset | Who owns it, and can it be transferred? | Assignment, licence or legally compliant contribution in kind |
An idea alone is not automatically worth half a company. Equally, usable software, a customer portfolio that can actually be transferred or an essential skill may be valuable. Explain that value and check that the business will genuinely benefit from it.
Future work cannot be treated as cash already deposited in a capital payment account. Contributions in kind have specific requirements. To reward a sustained commitment, design an appropriate equity arrangement and examine its tax and social insurance consequences.
Can founders contribute different amounts and still own 50% each?
Yes, if the funding is structured accordingly. Alice has CHF 30,000 and Ben has CHF 10,000. Both want to work full time and own half an LLC with CHF 20,000 of capital.
| Funding | Alice | Ben |
|---|---|---|
| Capital subscription | CHF 10,000 | CHF 10,000 |
| Loan to the company | CHF 20,000 | CHF 0 |
| Total paid in | CHF 30,000 | CHF 10,000 |
| Ownership of capital | 50% | 50% |
The CHF 20,000 loan remains a debt owed by the company to Alice. It does not automatically give her more equity. Agree its terms, including any interest and repayment arrangements, with the company’s financial position in mind.
This is one option to compare with unequal ownership, not a universal solution. It shows why “I am putting in three times as much money” does not, by itself, settle ownership and control.
A practical method for agreeing an equity split
1. Describe the next two years of the project
Who develops the offering? Who sells it? Who manages operations, finances and recruitment? How many days a week will each founder work? Who can go without a salary, and for how long?
Write these commitments down. “I will handle sales” is too vague if one person means three meetings a month and the other expects daily prospecting.
2. Assess contributions already made
Separate verifiable contributions from promises: money invested, a product already developed, signed contracts and assets that are owned and transferable. Check intellectual property rights too. A founder cannot contribute software owned by their former employer.
3. Agree how future risk will be shared
A founder leaving a secure job to work full time takes a different risk from a passive investor. This does not produce a universal formula, but it should be discussed explicitly.
A scoring table can help structure the discussion. Avoid presenting its total as a scientific valuation: the weights remain a matter of negotiation.
4. Separate the initial allocation from future changes
Decide what is allocated outright and what depends on a continuing commitment. Gradual vesting or a buyback arrangement on departure may be useful. It must be drafted for Swiss law and coordinated with transfer formalities, the articles and tax treatment.
5. Test the split against different scenarios
Model at least an early departure, a funding round, a year without dividends and a serious disagreement. If the arrangement only works when everyone agrees and business is going well, it needs more thought.
50/50, 51/49 or a larger majority?
A 50/50 split reflects equality but does not resolve disputes
Equally committed partners may want equal economic rights. The risk arises when their votes cancel each other out. Check the articles, chairing rules and required majorities. Do not assume a deadlock will disappear because “the managing director will decide”.
A useful arrangement has stages: a formal discussion, involvement of a third party, mediation and ultimately an exit solution if disagreement persists. The mechanism must be workable and fundable, as well as clearly drafted.
A 51% holding does not give unlimited power
A simple majority can be enough for some ordinary resolutions, but not every important decision. Law or the articles may require qualified majorities. Minority rights and the management bodies’ own powers continue to apply.
For specified SA/AG decisions, Article 704 CO requires at least two-thirds of the votes attached to represented shares and a majority of the nominal values represented. For an LLC, Article 808b CO requires at least two-thirds of votes represented and an absolute majority of all capital for which voting rights may be exercised. The LLC’s second test is therefore not limited to the capital present at the meeting.
| Situation | SA/AG | LLC |
|---|---|---|
| Ordinary resolution | Generally an absolute majority of votes represented; check the articles and special rules | Generally an absolute majority of votes represented; check the articles and special rules |
| Important decision specified by law | Two-thirds of votes attached to represented shares and a majority of nominal values represented, Article 704 CO | Two-thirds of votes represented and an absolute majority of capital carrying exercisable voting rights, Article 808b CO |
| Request a meeting in an unlisted company | 10% of share capital or votes | The right to request a meeting applies by analogy, Article 805 CO |
Example: A and B hold 60% and 40% of an LLC with proportionate voting rights, and both attend. A can pass an ordinary resolution alone under the statutory rule. A’s 60% is insufficient for the two-thirds threshold on an important decision. Different voting rights or attendance can change the calculation. Our general meeting guide explains how to prepare and record votes.
Three founders do not eliminate the problem
With a 40/30/30 split, several coalitions are possible. This may encourage discussion, but it can also leave one owner permanently isolated. Go beyond asking who exceeds 50%: define reserved decisions, information rights and signing authority.
Understand dilution with a worked example
Two founders own 60% and 40% of a company. An investor contributes CHF 100,000 through a capital increase, based on an agreed pre-money valuation of CHF 300,000.
The post-money valuation is CHF 400,000. The investor receives CHF 100,000 ÷ CHF 400,000 = 25%. The founders retain 75% between them:
| Owner | Before | After |
|---|---|---|
| Founder A | 60% | 45% |
| Founder B | 40% | 30% |
| New investor | 0% | 25% |
| Total | 100% | 100% |
This example assumes comparable economic rights and no other dilutive instruments. Issuing new shares or interests must comply with capital-increase requirements and subscription rights. An economic valuation of CHF 400,000 does not automatically become nominal capital of CHF 400,000.
Dilution reduces the percentage, not necessarily its economic value. At the negotiated valuation, founder A’s 45% represents CHF 180,000, just as their 60% did before the transaction. That remains a theoretical value, not a guaranteed sale price or available cash.
Distinguish a capital increase from a sale of existing interests. In the first, money goes into the company. In the second, the buyer pays the seller. They can be combined, but they fund different recipients.
Plan for a founder leaving
How can you leave a 50/50 Swiss LLC?
Start by identifying who could buy the interest: the other member or a third party. Then agree a valuation method, financing and timetable. Leaving as an employee or managing director does not automatically transfer ownership.
- Read the articles and founders’ agreement: buyer approval, pre-emption rights and any exit rights.
- Prepare up-to-date accounts and address the sale price, member loans and personal guarantees separately.
- Document the transfer in writing, obtain the required approval and update the commercial register and register of ownership interests.
If the company itself is buying out a founder, the purchase is subject to limits on its own shares or capital contributions. It must have sufficient freely disposable equity to cover the purchase price.
- LLC (Sàrl/GmbH): normally 10% of nominal capital. The ceiling rises to 35% when the acquisition is connected with a restriction on transfer or a member’s departure or exclusion (Article 783 CO).
- SA/AG: normally 10% of registered share capital. The ceiling rises to 20% when the acquisition is connected with a restriction on transferability or an action for dissolution (Article 659 CO).
In both cases, the portion above 10% must be sold or cancelled through a capital reduction within two years. These percentages refer to nominal capital, not the price agreed with the departing founder.
In a lasting LLC deadlock, Article 822 CO provides for judicial withdrawal for good cause. This is not an unconditional right to recover your contribution whenever you ask.
What happens if a founder leaves after six months? Without a suitable arrangement, they may keep their equity while the others continue building the business. At the other extreme, a clause allowing all their equity to be taken back for almost nothing regardless of the reason for departure may be disproportionate or open to challenge.
The agreement should address commitment periods, departure events, procedure, valuation and payment. Distinguish illness, death, voluntary departure and serious breach. Also cover loans, intellectual property and personal guarantees.
A worksheet to complete separately before you discuss it
Each founder should answer five questions, then compare responses: how much money will they contribute, and in what form? How much time will they commit? What role will they take? What remuneration do they expect? What happens if they leave in six months?
A disagreement about these answers can matter more than a few percentage points. Settle it before fixing the split, then reflect the agreement in the appropriate documents.
Document an agreement that can last
For an LLC, members and the number and nominal value of their interests appear in the commercial register. The ownership split is therefore not purely private. Under Article 807 CO, the articles may also provide veto rights over specified decisions; introducing such a right later requires every member’s consent. A percentage alone does not replace these provisions.
The documents should tell the same story. The articles organise the company; a shareholders’ or members’ agreement governs contractual commitments between its signatories. Employment contracts, loans and asset transfers complete the picture. Our guide to choosing a business partner helps structure the initial discussion.
An agreement does not replace transfer formalities. An LLC interest transfer must, in particular, be in writing and generally requires approval by the members’ general meeting, subject to the articles. For an SA/AG, check the type of shares and any transfer restrictions.
Maintain an up-to-date capitalisation table showing owners, interests, nominal values, percentages, special rights and instruments that could give access to equity. A clear cap table avoids negotiating an investment using incomplete figures.
Watch the video
Understand the money that makes up a Swiss LLC’s registered capital:
Understanding LLC capital before dividing ownership
Romain Prieur explains the capital of a Swiss LLC (Sàrl/GmbH). This French-language video provides the background for the ownership examples below.
Explore the Entreprendre en Suisse avec Sarah et Romain channel →
Make ownership expectations explicit
A good split is one the founders understand and can still defend as the project changes. Separate money, work and decisions, then test difficult scenarios before signing.
Entreprendre.ch can help you prepare and form your company, with a structure suited to the project and its founders.
Frequently asked questions
Must equity match the amount of money each founder contributes?
Not necessarily. Capital contributions must be legally valid and properly paid up, but the economic agreement can also reflect assets, future roles and risk. Additional funding can sometimes be structured as a loan rather than additional equity.
Can a Swiss company be owned 50/50?
Yes. Anticipate disagreements and check voting and chairing rules. Mediation or exit arrangements can be just as important as the initial ownership split.
Can a founder with 51% decide everything?
No. Some decisions require a qualified majority. Minority rights, the articles and the governing bodies’ own powers still apply.
Does a new investor always dilute the founders?
Issuing new interests can dilute owners who do not subscribe proportionately. Selling existing interests does not change the total number: it changes their owner. Distinguish the two transactions.
Can the equity split be changed later?
Yes, for example through a transfer or capital increase. Existing agreements, formalities and tax consequences must be respected. Changing the split later often takes more work than a thorough discussion at incorporation.
Sources and references
- Swiss Code of Obligations — English: capital and contributions, subscription rights, Articles 703–704, 785–786, 791, 807–808b and 822.
- Swiss SME portal: shareholders’ agreements — French.
- Swiss SME portal: articles of association — French.
Last editorial review: 5 November 2026. Figures and situations are illustrative.
Romain Prieur is a Swiss Certified Public Accountant and founder of Entreprendre.ch. With more than ten years of experience in audit and business advisory in Switzerland, he advises entrepreneurs on company formation, accounting and tax.
