Which legal form is best for your company? We help you find the right legal form.
This is how you find the right legal form
You should consider the legal requirements before you can start your own business and generate revenue. The first step is to choose the right legal form. This is important because not every legal form is suited to every company. Ultimately, a good choice depends on several criteria such as risk exposure, capital investment and taxation.
What legal forms are there in Switzerland?
There are two basic types of legal form:
Private companies
Incorporated companies
There are further subcategories within these two categories. Private companies are subdivided as follows:
Sole Proprietorships
The sole proprietorship is the cheapest and simplest way of establishing a business.
How much capital do I need to set up a sole proprietorship?
You don't need any start-up capital - with CHF 190 for the documents and around CHF 200 from the commercial register, you're in!
Which names are permitted for a sole proprietorship?
A sole proprietorship must always contain at least the surname of the founding person. Apart from this, fantasy names are possible with certain restrictions.
Can I found a sole proprietorship with someone else?
No, that is not possible. The sole proprietorship is inextricably linked to you as a person. If you are planning to found a company with other people, we recommend a LLC (GmbH).
Can I have employees with a sole proprietorship?
Yes, that is possible. But make sure that different rules apply to your employees than to you as a self-employed person (e.g. compulsory pension fund contributions).
Can I withdraw my pension fund with a sole proprietorship?
Under certain conditions, you can apply for self-employed status from your cantonal compensation office. This allows you to withdraw your pension fund assets, for example.
Do I have to keep accounts with a sole proprietorship?
Yes, you must keep at least single-entry accounts. However, as a sole proprietorship, you are exempt from the obligation to keep double-entry accounts up to a turnover of CHF 500'000.
The sole proprietorship is the cheapest and simplest way to set up a company. With an expected turnover of less than CHF 100'000, a sole proprietorship does not initially need to be registered with the cantonal commercial register. We always recommend registration, as the advantages clearly outweigh the disadvantages. Furthermore, the activity must be registered with the cantonal compensation office and recognised if self-employed status is desired. Finally, depending on the business model, being subject to VAT is definitely worthwhile. The biggest disadvantage of a sole proprietorship is that you have unlimited liability for all debts, including your private assets.
General Partnership (KLG)
In a general partnership, two or more natural persons join together to run a company. The general partnership is not a legal entity, but can act under its own name, acquire rights and enter into liabilities. All partners of a general partnership have unlimited joint and several liability with their own assets.
In recent years, the majority of general partnerships have been displaced in favour of the popular limited liability companies.
Limited liability company (LLC)
The simple solution for multiple business partners or growing companies.
How much capital do I need to set up a LLC?
You need CHF 20,000 in cash or as a contribution in kind to found an LLC.
Can I found an LLC with someone else?
Yes, the LLC is perfect for this. Normally, all associates involved in the LLC are also members of the management. Silent partners, on the other hand, are rather unusual.
Can I have employees with an LLC?
In an LLC, everyone is employed, even the founders themselves. This means that you need the appropriate insurance and a pension fund.
Can I withdraw my pension fund with an LLC?
No, this is only possible with a sole proprietorship and recognition as a self-employed person by the cantonal compensation office.
Do I have to keep accounts with an LLC?
Yes, you have to keep double-entry bookkeeping.
When an LLC is founded, the managing directors are personally entered in the commercial register. The founding capital or capital contribution for an LLC is at least CHF 20'000, whether in the form of cash or contributions in kind. Once the nominal capital has been paid in full, joint and several liability among the associates no longer applies - only the company's assets are liable.
Public limited company (Ltd.)
The most flexible solution for unlimited growth, silent partners and external investors.
How much capital do I need to set up an Ltd.
You need CHF 100,000 as share capital in cash or as a contribution in kind. Partial capitalisation is possible from CHF 50,000.
Can I found an Ltd. with someone else?
As many people as desired can hold shares in a Ltd. In addition, shareholders who have no function in the company (board of directors, management, etc.) are anonymous.
Can I have employees with a Ltd?
In a Ltd, everyone is employed, even the founders themselves (with the exception of board members). This means that you need the appropriate insurance policies and a pension fund if you do not only have members of the Board of Directors.
Can I withdraw my pension fund with a Ltd?
No, this is only possible with a sole proprietorship and recognition as a self-employed person by the cantonal compensation office.
Do I have to keep accounts with a Ltd?
Yes, you have to keep double-entry bookkeeping.
The advantage of the Ltd. is the high degree of creative freedom, and it is also very easy to raise outside capital. However, you need at least CHF 100'000 nominal capital at the beginning (with the exception of Partial capitalisation) and must comply with various regulations under the Swiss Code of Obligations. The relationship between the shareholders is advantageously regulated in a shareholders' agreement. Here too, Foundera will help you to find the perfect solution for you.
Legal entities are obliged to keep double-entry accounts. This includes a balance sheet and an income statement, as well as the necessary appendices. Good to know: sole proprietorships and general partnerships with an annual turnover of more than CHF 500,000 must also prepare a balance sheet and income statement.
Of course, there are other legal forms in addition to the examples mentioned, such as co-operatives or associations.
