Associations and foundations

The association and the foundation belong to the legal persons regulated in the Swiss Civil Code in the articles 52 following. After some general provisions follow in Art. 60 ff. CC the associations and in art. 80 ff. CC the foundations.

ASSOCIATIONS

Associations are networks of persons that pursue a common purpose. Political, religious, cultural or charitable purposes conceptually satisfy this. The pursuit of economic purposes, on the other hand, is excluded. Accordingly, associations may not wish to provide anyone with monetary or material benefits, or at least only for the benefit of third parties. No profit may be distributed to the members of the association. Lawyers in Frauenfeld, Zurich and St. Gallen will be happy to inform you about the permissible purposes that an association may pursue and impermissible purposes that are forbidden.

An association must be founded, at which point articles of association (statutes) are decided in the association’s general meeting (in accordance with Art. 60 para. 1 CC). The necessary content of these statutes is set out in Art. 60 para. 2 CC. Both natural persons and legal entities can be members of an association, although in principle there is no right to join an association. Associations are in principle not obliged to be entered in the commercial register, but they are entitled to do so. In any case, the entry is merely declaratory and not constitutive in nature. Associations each have their own legal personality.

Within the framework of the organization of an association, certain bodies are prescribed by law. A lawyer in St. Gallen, Zurich or Frauenfeld will be happy to provide you with further information on the organization of associations. An association assembly is for example, mandatory. It facilitates an expression of the association’s will and represents a meeting of all members present. Resolutions of the general meeting are passed by a simple majority of those present. Other types of decision-making are also possible or provided for in exceptional cases. The resolutions adopted at the assembly are legally binding. A board of directors is also required by law. This board represents the association and is responsible for managing the affairs of the association. In principle, each member of the board has the power of representation. The specific powers of the board of directors are determined by the statutes. Other than these two, no other organs are provided for by law but they can be provided for if they are included in the articles of association.

FOUNDATIONS

A foundation is an asset dedicated to a special purpose (also called a special-purpose asset). They have their own legal personality. In contrast to associations, foundations have no members and no owners. They only have beneficiaries who benefit from the assets. Foundations are established by a unilateral legal transaction that does not require receivable legality. The entry of foundations into the commercial register is essentially of a constitutive nature. The main types of foundations are the classic charitable foundation, the corporate foundation, the family foundation, the ecclesiastical foundation, the personnel welfare foundation and mixed foundation. If you need further information on the different types of foundations, please contact one of our attorneys at law in Switzerland.

The administration of a special-purpose asset is carried out by the foundation board, which is responsible for the management and representation of the foundation. The foundation board must act in accordance with the founder’s will and accordingly may not pursue its own will. Furthermore, there is a basic audit obligation for foundations. A lawyer in Zurich, St. Gallen or Frauenfeld will be happy to answer any further questions you may have about the organization of foundations.

The supervision of foundations is done by the community or by the competent state authority. Supervision serves to secure and protect the purpose of the foundation. The law does not provide for a specific means of supervision, although in practice similar measures appear time and again. These include the issuing of warnings, the monitoring of capital investments, the ordering of a reporting obligation and, as ultima ratio, the dismissal of foundation board members or the dissolution of the foundation.