A Swiss association (association / Verein, Articles 60–79 of the Swiss Civil Code) is a non-profit legal entity formed by a group of natural or legal persons united by a common non-economic purpose. Unlike French associations (governed by the 1901 law), Swiss associations are governed by the Civil Code and have considerable flexibility in their governance structure — they can hold assets, employ staff, and engage in commercial activities that serve their purpose. Major Swiss institutions — industry associations, professional bodies, charitable foundations — use the association form.

In an M&A context, associations are relevant in two situations: (1) as vendors — a Swiss trade association selling a subsidiary or a business activity; or (2) as stakeholders in the target — a company where a major customer or supplier is organized as an association, whose contractual relationships must be understood in a due diligence. Swiss associations can receive donations and bequests, enter into commercial agreements, and own real property — their financial statements must be analyzed carefully since they follow Swiss association accounting, not CO corporate accounting.

Unlike French associations, Swiss associations do not benefit from automatic tax exemption — they must apply to the cantonal tax authority for a tax exemption based on their non-profit status and public interest purpose. An association with significant commercial income may lose its tax-exempt status, creating a contingent tax liability that requires assessment in due diligence.

At Hectelion, we analyze Swiss association structures and their contractual and tax implications in our due diligences and advisory mandates.