Which legal form is best for your company? We help 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.
There are two basic types of legal form:
There are further subcategories within these two categories. Private companies are subdivided as follows:
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.
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.
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.