A Swiss AG (Aktiengesellschaft) and a Swiss Fund are distinct legal and financial entities with different purposes, structures, regulatory frameworks, and operational focuses. Below is a detailed comparison highlighting the key differences between a Swiss AG and a Swiss Fund:
Swiss AG (Aktiengesellschaft)
Definition and Purpose
– Corporate Structure: A Swiss AG is a joint-stock company designed primarily for business
operations. It is a common legal form for companies involved in various commercial activities,
including manufacturing, trading, and services.
– Purpose: The primary goal is to conduct business activities, generate profits, and provide returns to
shareholders.
Legal Framework
– Governing Law: The Swiss Code of Obligations (CO) regulates Swiss AGs.
– Formation: Requires a minimum share capital of CHF 100,000, with at least 20% paid in (minimum
CHF 50,000). It must be registered with the Commercial Register.
– Structure: Consists of shareholders, a board of directors, and an executive management team. Shareholders own the company through shares, and the board oversees strategic decisions.
– Liability: Shareholders’ liability is limited to their investment in the company’s share capital.
Regulatory Requirements
– Financial Reporting: Subject to stringent financial reporting and auditing requirements, especially for larger AGs.
– Compliance: Must comply with various corporate governance rules and regulations.
Operational Focus
– Business Activities: Engages in a wide range of commercial activities, from production to services.
– Profit Distribution: Profits can be distributed to shareholders in the form of dividends.
Swiss Fund
Definition and Purpose
– Investment Vehicle: A Swiss Fund is an investment vehicle designed to pool capital from multiple investors to invest in various financial assets, such as stocks, bonds, real estate, or commodities.
– Purpose: The primary goal is to provide investors with a return on their investment through capital appreciation, income, or both.
Legal Framework
– Governing Law: Swiss investment funds are regulated by the Swiss Financial Market Supervisory Authority (FINMA) under the Federal Act on Collective Investment Schemes (CISA).
– Types: Includes various types of funds, such as open-ended funds (e.g., mutual funds) and closed-ended funds (e.g., private equity funds).
Structure
– Fund Management: Managed by a fund management company or asset manager. Investors own units or shares in the fund, but they do not have the same level of control as shareholders in an AG.
– Custodian Bank: Typically, a custodian bank is appointed to safeguard the fund’s assets.
– Investment Strategy: Funds have a specific investment strategy and objective, which are outlined in the fund’s prospectus.
Regulatory Requirements
– Authorization and Supervision: Must be authorized and supervised by FINMA. They are subject to strict regulatory requirements concerning investment strategies, risk management, and investor protection.
– Disclosure: Must provide detailed information to investors, including regular reporting on fund performance and risk.
Operational Focus
– Investment Activities: Focuses on managing pooled capital to achieve the investment objectives stated in the fund’s prospectus.
– Return Distribution: Returns generated from the fund’s investments are distributed to investors according to the terms set out in the fund’s prospectus.
Key Differences
1. Purpose and Activities:
– Swiss AG: Engages in commercial business activities with the aim of generating profit from operations.
– Swiss Fund: Focuses on investment activities to generate returns for investors from financial assets.
2. Legal Structure:
– Swiss AG: A corporate entity with shareholders, a board of directors, and an executive management team.
– Swiss Fund: An investment vehicle managed by a fund management company or asset manager, with investors holding units or shares.
3. Regulatory Framework:
– Swiss AG: Regulated by the Swiss Code of Obligations, with a focus on corporate governance and financial reporting.
– Swiss Fund: Regulated by FINMA under the Federal Act on Collective Investment Schemes, with a focus on investor protection and fund management.
4. Formation and Capital Requirements:
– Swiss AG: Requires a minimum share capital of CHF 100,000.
– Swiss Fund: Capital requirements vary depending on the type of fund and specific regulations.
5. Liability:
– Swiss AG: Shareholders’ liability is limited to their share capital investment.
– Swiss Fund: Investors’ liability is limited to their investment in the fund units or shares.
6. Operational Focus:
– Swiss AG: Involved in diverse business activities with the aim of profit generation.
– Swiss Fund: Specializes in investment activities, aiming to achieve specific investment objectives and returns for investors.
Conclusion
In summary, a Swiss AG and a Swiss Fund serve different purposes and operate under distinct legal and regulatory frameworks. A Swiss AG is a corporate entity focused on business operations and profit generation, while a Swiss Fund is an investment vehicle aimed at pooling capital for investment purposes. Understanding these differences is crucial for choosing the appropriate structure for specific business or investment goals.
