Swiss Verein
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A Swiss Verein ("Verein" is German for "Union") is a legal structure in Swiss law. It is similar to the Anglo-American voluntary association. Unlike Germany, a Swiss Verein does not need to be registered in order to have a separate legal personality. A Verein is a non-governmental organization (NGO) and this form is used by several Swiss sections of international NGOs such as Amnesty International, and the World Wildlife Fund, as well as by business firms (see below). The form can also be used by political parties and alliances, such as trade unions.
As the establishment of a Verein involves only little paperwork and no registration or fees, it is the most important legal form in Switzerland and often used by minor groups such as sport and social clubs.
The only requirement is that prior to the establishment, two persons draw up bylaws and appoint the organs of the Verein (such as the board and the auditors).
[edit] Commercial organizations
The Verein 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. 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, overseas offices of accounting firms in a Verein structure are not bound by Securities and Exchange Commission subpoenae from the United States.
Since the assets and earnings of a Swiss Verein are controlled by the member firms, Swiss Verein 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 Verein 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 (S.D.N.Y. 2002) (parent Verein may be liable for office's securities fraud based on agency doctrine). Most Vereins now expressly note their status on web sites, e-mails and letterhead in order to prevent future arguments based on agency.
Examples of Swiss Verein-structured businesses include:
