Solvency Confirmation Letter Template for Switzerland

A Solvency Confirmation Letter under Swiss law is a formal written declaration that confirms a company's ability to meet its financial obligations as they become due. The document, governed by Swiss law including the Swiss Code of Obligations (particularly Articles 725 and 958), provides assurance about a company's financial standing and solvency status. It typically includes specific confirmations regarding the absence of bankruptcy proceedings, positive net asset position, and the ability to pay debts, backed by current financial information and often accompanied by supporting documentation such as recent balance sheets or auditor statements.

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What is a Solvency Confirmation Letter?

The Solvency Confirmation Letter is a crucial document in Swiss business practice, typically required in various commercial contexts such as major transactions, loan agreements, supplier contracts, or regulatory compliance. This document, governed by Swiss law, particularly the Swiss Code of Obligations and related financial regulations, provides formal confirmation of a company's financial health and ability to meet its obligations. The letter is often requested by business partners, banks, or other stakeholders who need assurance about a company's financial stability. A Solvency Confirmation Letter includes specific representations about the company's current financial position, confirms the absence of bankruptcy or similar proceedings, and often references recent financial statements or auditor reports. The document must be issued by authorized representatives and may require board approval, depending on the circumstances and requirements of the requesting party.

What sections should be included in a Solvency Confirmation Letter?

1. Letterhead and Date: Company letterhead with full legal entity name, registered address, and date of issuance

2. Recipient Details: Full name and address of the recipient entity or person requesting the solvency confirmation

3. Subject Line: Clear identification as a Solvency Confirmation Letter with reference period

4. Company Information: Legal name, registration number, and registered address of the company whose solvency is being confirmed

5. Financial Position Statement: Clear statement confirming the company's current solvency status and ability to pay debts as they fall due

6. Basis of Confirmation: Reference to financial records, accounts, and other information used to make the solvency assessment

7. Specific Confirmations: Explicit confirmations regarding no pending bankruptcy proceedings, ability to pay debts, and positive net asset position

8. Authorized Signature: Signature block with name and position of authorized signatory, typically board member or senior executive

What sections are optional to include in a Solvency Confirmation Letter?

1. Financial Metrics: Key financial ratios or metrics supporting the solvency confirmation, used when specifically requested or when additional support is desired

2. Time Period: Forward-looking statement about expected continued solvency, included when specifically requested by the recipient

3. Qualifications: Any specific limitations or qualifications to the confirmation, included when necessary based on circumstances

4. Auditor Statement: Additional confirmation from external auditors, included when required by recipient or for added credibility

5. Group Structure Reference: Reference to parent company or group structure if relevant, included for subsidiaries or group companies

What schedules should be included in a Solvency Confirmation Letter?

1. Latest Balance Sheet: Copy of the company's most recent balance sheet supporting the solvency confirmation

2. Board Resolution: Copy of the board resolution authorizing the issuance of the solvency confirmation letter

3. Auditor's Report: Most recent auditor's report or special purpose report if required

4. List of Material Liabilities: Schedule of significant financial obligations and their status, if specifically requested

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Switzerland

Publisher

Genie AI

Document Type

Confirmation Letter

Sector

Sales

Cost

Free to use

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