Swiss and German legal terminology in cross-border practice

Company law: familiar names, different content

For German entrepreneurs, families and advisers who establish structures in Zurich, the most important terminological differences lie in company law. Both countries know the Aktiengesellschaft and the Gesellschaft mit beschränkter Haftung, and both keep a Handelsregister. The similarity of the names conceals substantial differences. A Swiss company limited by shares requires a share capital of at least CHF 100,000, of which at least twenty per cent and no less than CHF 50,000 must be paid in on formation. Since the revision of company law in force from 2023, the share capital may also be denominated in a foreign currency such as the euro, the US dollar, the pound sterling or the yen if that currency is essential to the business. The law prescribes three corporate bodies: the general meeting (Generalversammlung), the board of directors (Verwaltungsrat), which may consist of a single member, and the statutory auditors (Revisionsstelle), which small companies may dispense with. The same revision introduced the Kapitalband, which allows the board to increase or reduce the capital within a range fixed in the articles for up to five years.¹

A German reader recognises every one of these words but may misread several of them. The German Aktiengesellschaft has a minimum capital of EUR 50,000 under § 7 AktG and a two-tier structure of management board (Vorstand) and supervisory board (Aufsichtsrat). The Swiss Verwaltungsrat combines supervisory and management functions in a one-tier board with non-transferable core duties under Article 716a OR, including the overall direction of the company and the supervision of those entrusted with management. In practice the board of a large Swiss company delegates management to an executive board (Geschäftsleitung), yet the legal responsibility of the Verwaltungsrat remains broader than that of a German Aufsichtsrat. A German executive who joins a Swiss board in the belief that he is taking a supervisory seat accepts liability risks that he may not have anticipated. The shareholders’ meeting is a Generalversammlung in Switzerland and a Hauptversammlung in Germany, the articles are Statuten in Switzerland and a Satzung in Germany, and the auditors are the Revisionsstelle in Switzerland and the Abschlussprüfer in Germany.

The limited liability company offers similar traps. The Swiss GmbH requires a nominal capital (Stammkapital) of at least CHF 20,000 under Article 773 OR, which must be fully paid in, while the German GmbH requires EUR 25,000 under § 5(1) GmbHG, of which half must be paid in before registration under § 7(2) GmbHG. The shares in a Swiss GmbH are Stammanteile, those in a German GmbH Geschäftsanteile. The transfer of shares requires written form in Switzerland under Article 785 OR and notarisation in Germany under § 15(3) GmbHG, a difference that matters when German families restructure holdings across the border. The partnerships show the same pattern. The general partnership of German commercial law, the offene Handelsgesellschaft under §§ 105 et seq. HGB, corresponds to the Swiss Kollektivgesellschaft under Articles 552 et seq. OR, while the limited partnership is a Kommanditgesellschaft in both systems. The Swiss participation certificate (Partizipationsschein) under Articles 656a et seq. OR, a non-voting equity instrument, has no direct counterpart in German company law.

Debt enforcement and insolvency: Betreibung and Konkurs

The most striking terminological divide lies in the law of debt enforcement and insolvency. Switzerland regulates both in the Federal Act on Debt Enforcement and Bankruptcy (Bundesgesetz über Schuldbetreibung und Konkurs, SchKG), which entered into force on 1 January 1892 and is thus the oldest part of the private law codified at federal level, older than the Civil Code and the revised Code of Obligations. The act distinguishes two forms of enforcement depending on the legal status of the debtor. Private individuals and entities not entered in the commercial register are subject to enforcement by seizure (Betreibung auf Pfändung), whereas entities entered in the commercial register are subject to enforcement by bankruptcy (Konkursbetreibung). The creditor cannot choose between them because the law determines which procedure applies. Swiss law continues to speak of Konkurs and knows a composition procedure, the Nachlassverfahren, as its restructuring instrument.²

Germany abandoned the word Konkurs in its legislation when the Insolvenzordnung entered into force on 1 January 1999. The new code replaced the Konkursordnung of 10 February 1877 and the Vergleichsordnung of 26 February 1935 in the western Länder, and the Gesamtvollstreckungsordnung of 6 June 1990 in the eastern Länder.³ A German lawyer who speaks of Konkurs today sounds old-fashioned, while a Swiss lawyer who speaks of Insolvenz is using a general economic term with no precise statutory meaning in Swiss law. Translations of Swiss documents into German German, or the other way round, must take account of this difference. In English, both systems are usually rendered as “bankruptcy” or “insolvency”, which conceals the structural differences entirely.

The Betreibung itself is the institution of Swiss law that most surprises foreign creditors and debtors. A creditor initiates enforcement by filing a request with the debt enforcement office at the debtor’s domicile, which then serves a payment order (Zahlungsbefehl) on the debtor. The debtor has twenty days to pay and ten days to lodge an objection (Rechtsvorschlag), which may be made orally or in writing on service or at the enforcement office. If no objection is filed, or if the objection is set aside, the creditor may continue the enforcement, which may lead to the seizure of assets and income.⁴ Neither the enforcement office nor the supervisory authority examines whether the claim actually exists before the payment order is issued. The burden of acting lies with the debtor, who must object, and with the creditor, who must then obtain the lifting of the objection (Rechtsöffnung) or bring an ordinary action.⁵

The practical consequence is that a Betreibung can be started against anyone without proof of a claim. It then appears in the debt enforcement register even if the claim later proves unfounded. German clients are regularly astonished that a counterparty can initiate such proceedings against them in Zurich and that the entry may affect their standing with landlords, banks and business partners. German law knows the Mahnverfahren under §§ 688 et seq. ZPO, which also works without an examination of the merits, yet it does not produce a public register entry of the kind associated with the Swiss Betreibungsregister. For a financial centre that serves foreign clients, the explanation of such institutions is part of the linguistic infrastructure. A literal translation of Betreibung as “debt collection” or “enforcement” conveys little of what the procedure means for the person concerned.

Financial market terminology

The terminology of financial market law adds a further layer of divergence. Swiss law speaks of Effekten for standardised securities suitable for mass trading, where German law speaks of Wertpapiere or, in capital markets regulation, of Finanzinstrumente. A Swiss company whose shares are admitted to trading on SIX Swiss Exchange is kotiert, a word derived from French coté, while a German company is börsennotiert. A Swiss bond is frequently called an Obligation or Anleihensobligation, a term that in German civil law denotes an obligation in the general sense. The Swiss Kassenobligation, a medium-term bank bond sold over the counter, has no German equivalent. In banking supervision, the Swiss Eigenmittel and Liquidität rules correspond broadly to the capital and liquidity requirements of European law, but the Swiss implementation of the Basel standards uses its own terminology in the Capital Adequacy Ordinance and in FINMA circulars.⁶

The examples show that cross-border practice between Zurich and Germany requires translation even where both sides speak German. The experienced Zurich adviser who works for German clients becomes a translator between two legal cultures that share a language. The same holds for Austrian clients, whose legal German differs again from both Swiss and German usage, as chapter K.III has shown for the DACH market as a whole. The ability to move between these variants, and to explain the Swiss institution behind a familiar-looking word, is one of the specific competences of the Zurich financial centre that a purely English-speaking centre cannot offer.

Notes

1. KMU-Portal of the State Secretariat for Economic Affairs (SECO), “Rechtsform: Aktiengesellschaft AG”, https://www.kmu.admin.ch/de/rechtsform-aktiengesellschaft-ag. The page also notes that formation requires a notarial deed, articles of association and entry in the commercial register, and that the company acquires legal personality only upon registration. ↩
2. Wikipedia, “Schuldbetreibungs- und Konkursrecht”, https://de.wikipedia.org/wiki/Schuldbetreibungs-_und_Konkursrecht. Cited for the overview of the structure of the SchKG in the absence of an openly accessible official summary. ↩
3. Wikipedia, “Insolvenzordnung (Deutschland)”, https://de.wikipedia.org/wiki/Insolvenzordnung_(Deutschland). ↩
4. ch.ch, the information portal of the Confederation, cantons and communes, “Betreibung: Zahlungsbefehl, Rechtsvorschlag, Pfändung”, https://www.ch.ch/de/steuern-und-finanzen/schulden--betreibungen-und-konkurs/betreibungen/. The portal states that the creditor must show that the claim is justified once the debtor has objected. ↩
5. Wikipedia, “Schuldbetreibungs- und Konkursrecht”, loc. cit. ↩
6. Art. 2 lit. b FinfraG, SR 958.1, defines Effekten as “vereinheitlichte und zum massenweisen Handel geeignete Wertpapiere, Wertrechte, … sowie Derivate und Bucheffekten”, https://www.droit-bilingue.ch/de-fr/9/95/958.1-2-5.html. The terms Kotierung (listing rules of SIX Exchange Regulation) and Kassenobligation are standard Swiss financial market terminology. ↩

For general information only. This article does not constitute legal or tax advice, does not replace advice on an individual case and creates no lawyer-client relationship. It reflects the legal position as of September 2025.