The One-Man Stock Corporation (Einpersonen-AG)
The revision of company and accounting law has enabled a one-man stock corporation. But there are still certain things to keep in mind.
According to Article 625 of the Swiss Code of Obligations (OR), a stock corporation (AG) can be founded by any given number of legal entities or natural persons. This legal basis allows you to found a one-man stock corporation single-handedly. However, as we shall now demonstrate, there are certain differences between this legal form and being the sole shareholder.
Limited Liability
Limited liability is one of the main reasons for founding a corporation. This way, shareholders can protect themselves from the company’s potential failure. One-man stock corporations (Einpersonen-AG) are no different. The corporation assumes full liability while the sole shareholder is protected.
However, misusing the advantages of a stock corporation can result in severe consequences. If the shareholder acts against the principle of good faith, the liability is restored and creditors can access the shareholder’s private assets. This is the case if a corporation is founded to intentionally bypass the law or protect assets from creditors.
Therefore, proving legal independence is essential for a one-man stock corporation. To counter a liability backlash, sole shareholders must ensure that private and business assets are kept firmly separated. Additionally, following applicable regulations of company law such as the annual general assembly and re-election of the Board of Directors is indispensable.
