Opting out of the audit (Switzerland)
opting-out
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Waiver of the limited audit for Swiss companies with no more than ten full-time positions on annual average, with the consent of all shareholders (Art. 727a Code of Obligations).
The waiver is entered in the commercial register. Any shareholder can nevertheless request a limited audit no later than ten days before the general meeting.
In practice
Many family and holding companies opt out of having an auditor in order to save costs. The conditions – no more than ten full-time positions on annual average and the consent of all shareholders – have to be checked every year, and the waiver must be entered in the commercial register. A voluntary audit can still make sense towards banks or lenders, or before planned succession steps, because it increases the credibility of the figures.
Distinctions and common mistakes
Opting out waives the limited audit, not the accounting: annual accounts, the general meeting and the tax return remain unchanged. Companies that exceed the thresholds for an ordinary audit cannot opt out. Typical mistakes are continuing the waiver although the number of full-time positions has risen above ten, and holding companies that opt out although banks or lenders contractually require audited accounts.
Relevant in: Switzerland
Related terms
- Participation deduction (Switzerland)
- Swiss reduction of profit tax on income from participations of at least 10 percent or with a market value of at least CHF 1 million.