Foundation (Switzerland)

A Swiss foundation (fondation) is a legal entity under civil law (CC art. 80 ff.) created by the irrevocable dedication of assets to a defined purpose — philanthropic, cultural, family or corporate. It has no shareholders or partners and is administered by a board of trustees. Family foundations and corporate foundations play an important role in the governance and wealth transmission of Swiss entrepreneurial families. In M&A, a foundation holding shares in the target complicates the transaction: statutory restrictions and purpose clauses may limit the board's freedom to approve a sale, particularly if the foundation's purpose is tied to the continuity of the family business.

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Example: due diligence on a Swiss family SME reveals that 35% of the share capital is held by a family foundation whose statutes restrict transfers of shares to family members of the founder. This restriction blocks sale to an external industrial acquirer and requires a pre-transaction restructuring of the shareholding, with the approval of the foundation board and the competent cantonal foundation supervisory authority.

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Hectelion analyses foundation ownership structures to identify transfer restrictions and advises on their resolution in advance of M&A transactions.