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.

‍

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.

‍

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