Cooperative company: The characteristics

Cooperatives prioritize development and mutual economic assistance above all, for example in the construction or purchase of housing.

An entrepreneurial business may also take the legal form of a cooperative (Art. 828-926, Swiss Code of Obligations).

The inherent values of the company also argue in favor of the cooperative, like direct democracy and the right of co-decision (one vote per head). Moreover, transparency at all levels of the hierarchy is a positive factor since it prevents inequality in terms of wages, among other things.

The broadly supported right of co-decision of a cooperative may become a hindrance because it slows down procedures. The legal form of the cooperative is a disadvantage when it comes to business transactions or capital markets transactions: the principle of one vote per head effectively prevents any undesired influence from the competition, but also prevents alliances with a financial obligation. Because of the lack of fixed share capital and an insufficient credit base, some cooperatives only have limited access to the capital markets and therefore cannot access equity capital.

Prior conditions for creation

A minimum of seven partners is required for the creation of a cooperative; these may be legal entities or natural persons. Once the cooperative has been set up, the number of partners may be reduced, although dissolution proceedings are possible in theory.

It is not necessary to have registered capital. However, if registered capital is in place, each partner must hold at least one share with a fixed nominal value. The partners are responsible for corporate assets.

The administrative bodies for a cooperative company are, pursuant to regulations:

  • The general meeting
  • The board (at least three members)
  • The statutory auditor

It is compulsory to register the company on the trade register. The company name may be freely chosen, and must include “société coopérative”.

Since July 1, 2015, the board of the company is required to keep an updated list of all members of the cooperative, indicating their full names and addresses, and if applicable the name of the company concerned.


Last modification 17.01.2023

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