A Swiss association is a legal structure in Swiss law, defined in the civil code. It is
similar to the Anglo-American voluntary association. Unlike in Germany, a Swiss association does
not need to be registered in order to have a separate legal personality. It must be registered
if it "conducts a commercial operation". An association can serve as a non-profit organization
or non-governmental organization and this form is used by several Swiss sections of
international NGOs such as Amnesty International, and the World Wildlife Fund, by business firms
or by international organizations such as the Fédération Internationale de Football
Association. The form can also be used by political parties and alliances, such as trade
unions. As the establishment of an association involves
only little paperwork and no registration or fees, it is an important legal form in
Switzerland and often used by groups such as sport and social clubs. It has also become
a useful form for multiparty business organizations. The only requirement is that prior to the
establishment, two persons draw up bylaws and appoint the organs of the association.
Commercial organizations The association can also be used as a legal
form for a business organization consisting of a number of independent offices, each of
which has limited liability vis-à-vis the others.
The form is often used by multinational professional firms to limit their global accountability.
One advantage to the Verein structure is that because control of the firm is decentralized,
offices are only bound by regulators in their country. For instance, non-US offices of accounting
firms in a Verein structure are not bound by Securities and Exchange Commission subpoenas
from the United States. Since the assets and earnings of a Swiss association
are controlled by the member firms, Swiss association borrowers should provide a lender
with guarantees from member firms or backup letters of credit.
Several court cases against accounting firms have attempted to use vicarious liability
and veil piercing arguments to find liability for the association based on a member's activities.
Only one such argument has been successful in American courts: see Cromer Fin., Ltd.
v. Berger, 2002 U.S. Dist. LEXIS 7782. Most associations now expressly note their status
on web sites, e-mails and letterhead in order to prevent future arguments based on agency.
Baker & McKenzie was the first major law firm to become a Swiss verein, in 2004. Since 2009,
Swiss vereins have been used in several mergers of large multinational law firms, as they
allow regional profit pools and their related tax, accounting and partner compensation systems
to remain separate while allowing strategy, branding, information technology and other
core functions to be shared between the constituent partnerships. The main disadvantage of the
verein structure is that profits cannot be shared between constituent partnerships, which
removes incentives for partners to share clients and work between the member partnerships.
Most law firms as vereins overcome this problem by sharing costs in return for work referrals,
which allows for the indirect sharing of profits. The Swiss verein is similar to the European
Economic Interest Grouping, but differs in that EEIG member firms share their liabilities
while verein member firms maintain separate liabilities.
Examples of Swiss association-structured businesses include:
Accounting firms Crowe Horwath International
Deloitte KPMG
Law firms Baker & McKenzie
Dentons DLA Piper
Hogan Lovells King & Wood Mallesons
Norton Rose Fulbright Squire Patton Boggs
See also Société coopérative
References ^ a b c Hasselback, Drew. "More on the Swiss
Verein system". Financial Post. ^ "210 Swiss Civil Code, Art. 61". Retrieved
18 February 2014. ^ a b c d e f Johnson, Chris. "Vereins: The
new structure for global firms". The American Lawyer.
^ a b Enter the Swiss Verein: 21st-century global platform or just the latest fad? By
Nick Jarrett-Kerr and Ed Wesemann.