The owners' residual interest in the business: what would remain if every asset were realised and every liability settled.
Assets − liabilities = equity.
For a Swiss company it typically comprises share capital, legal and voluntary reserves, and retained earnings carried forward. Minimum share capital is CHF 100,000 for an SA, of which at least 20% of each share's nominal value must be paid in, subject to an absolute floor of CHF 50,000. For a Sàrl the minimum is CHF 20,000, fully paid in.
When liabilities exceed assets, equity turns negative. This is overindebtedness, which triggers specific duties on the board under Swiss law.
