In short. Buying a company in Geneva means either buying its shares or quotas (a share deal) or taking over its business and assets (an asset deal). In a share deal you take the company with its entire history, and the seller’s statutory warranty in principle covers only the existence and extent of the rights sold, not the value of the business (BGE 107 II 419). Your protection comes from due diligence and from written warranties in the purchase agreement. Quotas in a limited liability company (GmbH/Sàrl) are transferred in writing, with the approval of the members’ meeting unless the articles provide otherwise. Since 1 October 2026, whoever acquires control must report the beneficial owner to the company within one month.
A familiar pattern. An entrepreneur buys a Geneva business with fifteen staff, at a price based on last year’s accounts. A few months after closing, a former customer sues over work delivered two years earlier, then a social security reassessment arrives. The seller points out that none of this is in the contract. Under the statutory warranty alone, he may well be right.
Share deal or asset deal?
In a share deal the company itself does not change. Its contracts, employees and licences in principle stay in place, subject to any change of control clauses, and so do its debts, disputes and tax exposure. Execution is simple, but you need to know exactly what you are buying.
In an asset deal you pick what you take (customers, stock, equipment, the lease if the landlord agrees), and the past in principle stays with the seller. A company entered in the commercial register can also transfer all or part of its assets and liabilities under the Merger Act (art. 69 para. 1 MerA). The agreement must be in writing and include an inventory clearly identifying what is transferred (art. 70 para. 2 and 71 para. 1 let. b MerA). The transfer takes effect on registration (art. 73 para. 2 MerA), and the transferor remains jointly liable for three years for earlier debts (art. 75 para. 1 MerA).
Employees follow a transferred business. Their employment relationships pass to the acquirer with all rights and obligations unless the employee objects (art. 333 para. 1 CO), and staff or their representatives must be informed in good time before the transfer (art. 333a para. 1 CO). The former employer and the acquirer are jointly liable for employee claims falling due from before the transfer until the employment could normally have ended (art. 333 para. 3 CO). In a share deal the employer remains the same company.
For a café, restaurant or shop, see our article on selling or buying a restaurant in Geneva. The tax treatment of the two structures differs significantly and should be reviewed with a tax adviser before the letter of intent.
How are shares and quotas transferred?
For a GmbH/Sàrl, the assignment of quotas must be in writing (art. 785 para. 1 CO). It requires the approval of the members’ meeting, which may refuse without giving reasons unless the articles provide otherwise (art. 786 CO). Until approval is given the assignment has no effect, but approval is deemed granted if it is not refused within six months of receipt of the request (art. 787 para. 2 CO). Members are entered in the commercial register (art. 791 CO), so the purchase becomes public.
Registered shares in a company limited by shares (AG/SA) are freely transferable unless the law or the articles provide otherwise (art. 684 para. 1 CO). Where the articles make transfers subject to the company’s approval (art. 685a para. 1 CO), the company may refuse on a good cause stated in the articles, or by offering to take over the shares at their real value (art. 685b para. 1 CO). Until approval is given, ownership and all rights attached to the shares remain with the seller (art. 685c para. 1 CO). Without a refusal within three months of receipt of the request, approval is deemed granted (para. 3).
Read the articles and any shareholders’ agreement before making an offer, since it may contain pre-emption or tag-along rights. See our article on 50/50 and 51/49 shareholders’ agreements.
What does the seller’s warranty cover when you buy all the shares?
Less than most buyers assume. The seller warrants promised qualities and is liable for defects that destroy or significantly reduce the value or intended use of the thing sold (art. 197 para. 1 CO). In a share deal, the thing sold is the shares.
The Federal Supreme Court ruled on the purchase of a business through the acquisition of its entire share capital. Even then, the statutory warranty does not extend to the company’s assets, only to the existence and extent of the rights sold. The seller is liable for the economic value of the shares only if he gave specific assurances and the buyer complied with art. 201 CO (BGE 107 II 419, consid. 1). A mistake about the company’s assets may, under certain conditions, allow the buyer to avoid the contract instead (same judgment, art. 24 para. 1 no. 4 CO), within one year of discovery (art. 31 CO).
Under art. 201 CO, the buyer must examine what he received as soon as the normal course of business allows and notify the seller of defects without delay, including defects that only appear later (para. 1 and 3). Warranty claims are time-barred two years after delivery, unless the seller undertook a longer warranty (art. 210 para. 1 CO).
The purchase agreement therefore does the real work. A value guarantee, for instance on the level of equity at a given date, is an independent undertaking of the seller, separate from assurances about the qualities of the thing sold (Federal Supreme Court, 4A_627/2012 of 9 April 2013, consid. 6.4). Buyers negotiate representations and warranties (accounts, litigation, taxes and social charges, key contracts, intellectual property), with a survival period, a cap, a de minimis threshold and often part of the price held in escrow.
The steps of an acquisition
- Letter of intent. Price or pricing mechanism, timetable and scope. State which clauses are binding (exclusivity, confidentiality) and which are not.
- Due diligence. Articles, share register, minutes, contracts, leases, employees, litigation, licences, accounts and tax. Each finding becomes a price reduction, a specific indemnity or a condition. It also matters for the warranty, since the seller is not liable for defects the buyer knew of when the contract was concluded (art. 200 para. 1 CO).
- Share purchase agreement. Price and adjustments, warranties, indemnities, seller’s non-compete, conditions precedent, governing law and jurisdiction.
- Signing and closing. Between the two, the parties wait for corporate approvals, any Lex Koller permit and financing. At closing, shares are delivered against payment, board members or managing officers are replaced, and the commercial register and share register are updated.
What must be reported after the acquisition?
The rules changed on 1 October 2026, when the Federal Act on the Transparency of Legal Entities (LTPM) entered into force and repealed former art. 697j and 790a CO. A beneficial owner is the natural person who ultimately controls the company by holding, directly or indirectly, alone or with others, at least 25% of the capital or votes, or who controls it in another way (art. 4 para. 1 LTPM).
A shareholder or member holding such a stake must report the beneficial owner’s identity to the company within one month of acquiring control (art. 13 para. 1 and 3 LTPM). The beneficial owner must in turn report to that shareholder or member, or directly to the company where control runs through a chain (art. 14 para. 1 LTPM). The company must report any change to the transparency register within one month of learning of it (art. 10 LTPM). If it is not yet entered in the register, the first change to its commercial register entry after 1 October 2026, such as the replacement of board members at closing, triggers a one-month period for its initial filing (art. 9 and 51 para. 1 LTPM). Intentional breaches are punishable by a fine of up to CHF 500,000 (art. 43 LTPM).
If you are buying from abroad
Foreign buyers can in principle acquire a Geneva company. Three points need attention.
Lex Koller. For a person abroad within the meaning of art. 5 of the Federal Act on the Acquisition of Real Estate by Persons Abroad, acquiring shares in a company not listed on a Swiss exchange whose actual purpose is acquiring real estate requires a permit (art. 2 para. 1 and 4 para. 1 let. e). No permit is needed where the property serves as a permanent establishment for a commercial, craft or professional activity (art. 2 para. 2 let. a). An operating company owning its premises is a different question from a company holding residential property.
Local representation. A company limited by shares must be able to be represented by a person resident in Switzerland, who is a board member or an executive officer (art. 718 para. 4 CO). The same applies to a GmbH/Sàrl, through a managing director or an executive officer (art. 814 para. 3 CO).
Merger control in principle only affects very large deals, where the undertakings concerned together achieve turnover of at least CHF 2 billion, or CHF 500 million in Switzerland, and at least two of them each achieve CHF 100 million in Switzerland (art. 9 para. 1 Cartel Act). Notification is also mandatory, regardless of these thresholds, where a final decision has found an undertaking concerned to be dominant and the deal concerns that market or a neighbouring one (art. 9 para. 4 Cartel Act).
Key deadlines
- Without delay. Notice of defects to the seller (art. 201 para. 1 and 3 CO).
- 1 month. Report of the beneficial owner to the company after acquiring control (art. 13 para. 3 LTPM).
- 1 month. Report of any change to the transparency register by the company (art. 10 LTPM).
- 3 months. Without a refusal, a transfer of restricted registered shares is deemed approved (art. 685c para. 3 CO).
- 6 months. Same rule for GmbH/Sàrl quotas (art. 787 para. 2 CO).
- 1 year. Avoidance for mistake or fraud, from discovery (art. 31 CO).
- 2 years. Limitation period for warranty claims, unless a longer warranty was given (art. 210 para. 1 CO).
- 3 years. Joint liability of the transferor after an asset transfer under the Merger Act (art. 75 para. 1 MerA).
Frequently asked questions
Do I need a lawyer to buy a company in Switzerland?
No statute requires one. A transfer of GmbH/Sàrl quotas requires written form, not a notarial deed (art. 785 CO), and in an asset transfer under the Merger Act, notarial form only applies to the part covering real estate (art. 70 para. 2 MerA). A lawyer is mainly useful for due diligence and the warranties, because the statutory warranty gives a share buyer little protection.
What is the difference between a share deal and an asset deal in Switzerland?
In a share deal you buy the company with its contracts and licences, but also its debts and disputes. In an asset deal you choose what you take, with more complex transfers and employees passing to the acquirer (art. 333 CO). Tax treatment also differs and should be checked early.
Is the seller liable for hidden liabilities after a share purchase?
Not under the statutory warranty alone. In a share sale it covers the existence and extent of the rights sold, and the value of the business is covered only if the seller gave specific assurances (BGE 107 II 419, consid. 1). Hence the importance of written representations and warranties. A mistake about the assets may also, under certain conditions, allow the buyer to avoid the contract.
How long do I have to bring a warranty claim?
Defects must be notified without delay (art. 201 CO). Claims are time-barred two years after delivery unless a longer warranty was given (art. 210 para. 1 CO), and avoidance for mistake or fraud must be declared within one year of discovery (art. 31 CO). Purchase agreements usually set their own notice periods, which must be followed strictly.
What must be reported after acquiring 25% of a Swiss company?
Since 1 October 2026, the shareholder or member who controls the company reports the beneficial owner to the company within one month (art. 13 LTPM), and the company reports the change to the transparency register within one month of learning of it (art. 10 LTPM), or makes its initial filing if it is not yet registered (art. 9 and 51 para. 1 LTPM). Intentional breaches carry a fine of up to CHF 500,000 (art. 43 LTPM).
Can a foreigner buy a company in Switzerland?
Yes, in principle. Lex Koller applies to shares in a company not listed in Switzerland whose actual purpose is acquiring real estate, unless the property serves as a permanent establishment for the business (art. 2 and 4 of the Lex Koller). The company must also be able to be represented by a person resident in Switzerland (art. 718 para. 4 and 814 para. 3 CO).
Legal basis and case law
Swiss Code of Obligations (CO): art. 24, 31, 197, 200, 201, 210, 333, 333a, 684, 685a, 685b, 685c, 718, 785, 786, 787, 791 and 814. Merger Act (MerA): art. 69, 70, 71, 73 and 75. Federal Act on the Transparency of Legal Entities (LTPM): art. 4, 9, 10, 13, 14, 43 and 51. Federal Act on the Acquisition of Real Estate by Persons Abroad (Lex Koller): art. 2, 4 and 5. Cartel Act: art. 9.
Case law: BGE 107 II 419, consid. 1. Federal Supreme Court, 4A_627/2012 of 9 April 2013, consid. 6.4.
Sources: Code of Obligations, Merger Act, Lex Koller and Cartel Act on Fedlex, and the Transparency of Legal Entities Act (French version).
About this type of case
See our pages corporate lawyer in Geneva and business lawyer in Geneva. For shareholders left in the minority after a sale, see Minority shareholder rights in Switzerland.
A first meeting, with the articles, the latest accounts and the draft letter of intent, lets us choose the deal structure, focus the due diligence and identify the warranties you need. Matthias Traussnig worked at a Big Four firm and advises buyers and sellers in negotiations and in post-closing disputes. To discuss your project: +41 22 512 76 00 or use the contact form.