Foundations of Business Law

• Residents in Switzerland are subject to federal income and wealth taxes.
  • net wealth
  • progressive rates

• Non-residents may be subject to Swiss taxes on various kinds of Swiss source income: interest or dividends paid by a Swiss entity, income from real property or from business activities in Switzerland, directors' fees, or compensation for an activity performed in, and paid by a Swiss employer.

- situations where person does not agree with the factual or legal interpretation of situation by another person

1. Judicial processes: state judge or court is means of conflict resolution > Litigation

2.Extrajudicial processes: Alternative Dispute Resolution (ADR), Arbitration, negotiation, mediation

Litigation: initiated when party files suit against the other

Some disputes will not reach agreement through collaboration and need power of state:

• Outcomes are decided by impartial judge or court and verdict is legally binding
• Both parties have right to appeal judgement to higher court

Procedural rules: rules of evidence and the procedure are established by legislature

--> in a trial questions of evidence are more important than legal considerations

• What is risk involved? Is it worth going through lengthy procedure?
• Will judicial decision be enforceable? (in bankruptcy, you still don’t get paid after)
• Are proceedings affordable?
• Is party willing and patient enough to follow a court case through judicial system?
• Is there a way to settle without court? Is litigation serving commercial interest?
• Is there sufficient evidence to prove relevant facts?
• Would ADR be an option?

ADR: (not legally binding)

- Method of resolving disputes outside of judicial process (litigation, court) through the presence of a facilitator or decision maker (neutral, unbiased) --> cheaper and less time-consuming than litigation

e.g.: mini trial: the third party gives advisory opinion on how court could decide

e.g.: Online Dispute Resolution ODR: using internet forums to resolve dispute

formal method of ADR (e.g. Swiss Arbitration Association)

Arbitrator: thrid party of a panel of neutral persons

• Arbitrator imposes decisions on parties (arbitration awards) after hearing both sides;
• Occurs when contractual parties agree on solving dispute with arbitration clause > clause provides resolving of dispute with arbitration and not with court (usually legally binding)

non binding arbitration: parties can go forward with a lawsuit if no agreement with arbitrators decision

simplest form of ADR

• Parties attempt to settle a dispute informally, with or without attorneys
• Attorneys advise clients to try to settle before proceeding to trial
• Negotiations are allowed before, during and even after a trial

• Neutral third party acts as mediator and works with both sides to facilitate resolution
• Talks with parties separately and emphasizes points of agreement to help evaluate
• Mediator may propose solution but doesn’t make decisions resolving the matter

• Preferred form for business partners, employers vs. employees, parties in long-term relationships