Mandatory bookkeeping in Switzerland: which Swiss companies are concerned?

The Swiss Code of Obligations sets out the rules that companies must follow for accounting purposes. Depending on your company’s legal form or turnover, it may be required to follow certain procedures to manage its accounts. My Swiss Company fiduciary in Switzerland provides an overview of the accounting requirements for companies established in Switzerland.

Keeping accounts is mandatory for certain companies in Switzerland. These are in particular :

– legal entities with the legal status of a Swiss corporation (SA) or a limited liability company (SARL),
– limited partnerships with shares
– cooperative societies,
– associations and foundations.

Similarly, if you are self-employed (sole proprietorship) and your turnover exceeds CHF 100,000 and you have to keep a double set of accounts for a turnover of more than CHF 500,000, you must keep accounts. However, this does not mean that sole proprietorships with a turnover of less than this amount are exempt. They are required to keep simplified accounts showing income, expenditure and assets.

The various accounting obligations of companies

In terms of accounting management, there are five legal obligations for companies. Failure to comply with these rules exposes offending companies to various penalties.

Carrying out an inventory

Every company is required to carry out an inventory every year. The inventory must be detailed and exhaustive. It enables the existence and value of the assets and liabilities of the company to be verified. This accounting document includes tangible and intangible assets, financial assets, stocks of goods, debts and receivables. If you draw up an inventory of your company, it must be sufficiently reliable, as it will serve as the basis for the balance sheet.

Drawing up the balance sheet

A mandatory document required by law, the balance sheet presents your company’s assets and liabilities at a given period. It must therefore be dated and clearly indicate your company’s assets and liabilities. When you draw up a balance sheet, the rule is that the sum of the assets must always be equal to the total of the items listed under liabilities.

Drawing up the profit and loss account

As part of your company’s bookkeeping, you must prepare the profit and loss account. This summary accounting document shows all the company’s income and expenses in detail. It also shows whether your company has made a profit or loss in a given accounting period.

Writing the notes to the accounts

The notes to the accounts are a document that makes it easier to understand the balance sheet and profit and loss account. It should provide information on :

– the accounting principles used by the company
– receivables,
– depreciation methods, provisions,
– the breakdown of hidden reserves,
– liabilities,
– shareholdings
– assets committed to secure debts
– current leases

In accordance with article 958f of the Swiss Code of Obligations, every company must keep documents and reports related to its accounting for a minimum of 10 years and for a minimum of 20 years for accounting documents related to real estate transactions. To comply with your legal obligations, you can choose between internalising or outsourcing your accounting. In the latter case, seek the services of a financial expert or a fiduciary company based in Switzerland.

Audit of accounts

New rules for the audit of companies’ annual accounts have been in place since the beginning of 2012. If two of the threshold amounts are exceeded in two successive financial years, the annual accounts must be subjected to an ordinary audit. The new threshold amounts set by the law are :

– CHF 20 million for the balance sheet total
– CHF 40 million for turnover
– 250 full-time jobs

A company may also be required to undergo an ordinary audit if it has an obligation to consolidate or if shareholders representing together at least 10% of the share capital require it. The articles of association or the general meeting may also provide for an audit of the annual accounts.

Companies that do not meet the above criteria must carry out a limited audit of their annual accounts. This procedure includes a management interview, verification of details and an analytical audit. The owners of a company may waive the audit in part or in full if the company has fewer than ten full-time jobs and if they all agree. However, creditors may also insist on an audit.

In the case of an ordinary audit, a full report must be submitted to the board of directors and a summary report to the general meeting. In the case of a limited audit, a summary report must be submitted to the general meeting.

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