Where a dividend may come from
Swiss law follows a strict balance-sheet logic. The share capital is untouchable, the legally required reserves must stay in the company, and only what remains — accumulated, distributable profit and freely available reserves — can be paid out. Losses carried forward are absorbed first.
The consequence founders most often underestimate: cash in the bank is not the test. A company can hold comfortable liquidity and still have nothing to distribute because it has not yet earned it; a dividend distributes profit, not bank balance. Conversely, a company with distributable profit but tight liquidity should not distribute either — the board must not pay out what the company needs to meet its obligations.
The process that makes a dividend valid
A dividend is a formal act, not a transfer. The board draws up the annual accounts; where the company is subject to audit, the auditor reports on them; the general meeting — or the members' meeting in a GmbH — approves the accounts and resolves the distribution on the board's proposal. In a small company this can be done in writing in short order, but it must actually be done: withdrawals taken during the year "against future dividends" are simply debts owed to the company until a valid resolution covers them.
The danger zone near losses
As equity thins, the rules of Art. 725 ff. CO come into view: capital loss and overindebtedness trigger duties to monitor solvency and act — the opposite of distributing. A dividend resolved in that zone is not just imprudent; it is the kind of decision that later ends up in a liability claim against the board that proposed it. Unlawfully received distributions must be repaid. The closer the accounts are to a loss, the more the question changes from "may we?" to "why would we?".
Disguised distributions — and what to do
Distributions do not only happen by resolution. A salary well above market, the company paying private expenses, assets sold to a shareholder below value — all of these are disguised distributions: reclaimable under corporate law and unattractive in their tax consequences. The clean pattern is simple: pay market-rate compensation for work, keep shareholder transactions at arm's length and documented, and distribute profit once a year on the basis of approved accounts. If the balance sheet is anywhere near a loss, take advice before resolving anything — and for your specific distribution question, we are happy to look at the numbers with you.