Advisory Shares Agreement Template for Switzerland

An Advisory Shares Agreement is a legal contract that allows Swiss companies to compensate advisors with equity rather than cash, creating a mutually beneficial arrangement that aligns advisor interests with company performance. Under Swiss law, this agreement must carefully balance corporate governance requirements with advisor compensation while ensuring compliance with the Swiss Code of Obligations and related financial regulations.

When do you need this document?

You need an Advisory Shares Agreement when your Swiss company wants to attract high-value advisors without significant cash outlays, particularly common in startups and growth companies. This document becomes essential when engaging industry experts, former executives, or specialists who can provide strategic guidance, market access, or technical expertise. The agreement is also necessary when you want to incentivize long-term advisor commitment through vesting schedules that reward continued engagement. Additionally, you'll need this agreement when establishing clear boundaries between advisory roles and employment relationships to avoid Swiss employment law complications.

Key legal considerations

Several critical legal factors must be addressed when drafting your Advisory Shares Agreement under Swiss law. The vesting schedule must be clearly defined to specify when advisors gain full ownership rights to their shares, typically structured over 2-4 years with cliff vesting periods. Share transfer restrictions are crucial and must comply with Swiss corporate law, often including right of first refusal provisions and approval requirements for transfers. The agreement must clearly distinguish the advisory relationship from employment to avoid triggering Swiss employment law protections and associated obligations. Tax implications for both the company and advisor need consideration, particularly regarding the timing of share grants and potential withholding requirements. Additionally, the agreement should address confidentiality obligations, intellectual property assignments, and termination procedures.

Legal requirements in Switzerland

Swiss law imposes specific requirements on Advisory Shares Agreements that must be incorporated into your document. Under the Swiss Code of Obligations, share issuance must comply with corporate governance requirements, including proper board resolutions and potential shareholder approvals depending on your company's articles of association. The Swiss Financial Market Infrastructure Act may apply if your shares are publicly traded or if specific disclosure requirements are triggered. Employment law provisions within the Code of Obligations require clear differentiation between advisory and employment relationships to avoid unintended labor law consequences. The agreement must also consider Swiss securities law requirements, particularly if shares may be transferred or if the company anticipates public trading. Corporate registrar notifications may be required for significant share issuances, and the agreement should account for these administrative requirements. Additionally, tax compliance provisions should address Swiss withholding tax obligations and advisor reporting requirements under Swiss tax law.