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Swiss verein is a legally recognized organization that allows for the creation of a decentralized business structure without needing to comply with integration rules. It is commonly used by international organizations and businesses and can encompass different types of organizations, including NGOs and some types of business organizations. Creating a verein requires minimal legal effort, and it is characterized by a decentralized business organization. The regulatory standards of other countries do not necessarily apply, and lenders may require letters of credit or contractual guarantees from member companies.
The Swiss verein is a recognized structure or organization under the current composition of Swiss law. Basically, it is a means of creating a legally recognized organization without necessarily having to comply with a set of rules and regulations necessary for integration. Organizations and businesses that operate on an international basis commonly use the institution approach as a Swiss verein.
In the context of Swiss law, a verein can encompass different types of organizations. In all cases, the Swiss organization would be defined as a non-governmental organization, or NGO. Social clubs, trade unions, international non-profit organizations, and even some types of business organizations use the construct.
When a commercial organization is established under the terms and conditions of a Swiss verein, it is inherent that the company is established as a limited liability company. Furthermore, a verein is characterized by a decentralized business organization. Regulators within the country of residence are directly responsible for the function of the organization within national borders, rather than each branch of the organization being managed from a central office located elsewhere.
Creating such an organization does not require much legal effort. The minimum requirements are that the articles of association must be written and approved by at least two people who will serve as officers of the company. A board of directors, like a board of directors, must also be elected, with each elected officer meeting the requirements set by Swiss law. In addition, the auditors who will monitor the organization’s financial reports must be identified.
Since the organizational structure of a verein focuses on the operations of the branch or member company located within a specific country, this means that the regulatory standards of other countries do not necessarily apply. It is not unusual for lenders to require letters of credit or some sort of contractual guarantee from member companies before lending funds to a Swiss domestic verein. This action essentially provides the lender with some type of legal recourse in the event that the household member defaults and the assets are not sufficient to pay off the outstanding debt.
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