Comparison of Corporate Legal Forms in Switzerland
Choosing a legal form can sometimes be a complex decision. The form will depend above all on the activity envisaged, the size of the company and the financial resources available.
To correctly determine the most appropriate legal form and avoid mistakes, it is important to compare the advantages and disadvantages of each legal form.
Abbreviations
Throughout this article, we'll use the following abbreviations to refer to the different legal forms of commercial companies in Switzerland.
Entry in the Trade Register
- SA
- LLC
- SA
- SnC
- Sole proprietorship
Capital to Open the Company
- SA
- LLC
- SnC
- Sole proprietorship
Contractor's Liability
Corporations, because they have a legal personality distinct from that of the entrepreneur, provide for liability limited to the company's share capital. Partnerships, on the other hand, because they are attached to their owner, provide for unlimited liability.
- SA
- LLC
- SnC
- Sole proprietorship
It should be noted, however, that the partners of a Société Anonyme or Sàrl can still be sued personally in the event of damage caused to the company as a result of fault or negligence.
Choice of Company Name
Most company names can be chosen freely. The company name may contain the name of an individual, describe the actual activities of the company, or be a fanciful designation. However, it must not conflict with an already registered name of another entity, nor be misleading or contrary to the public interest.
To find out if the name of your choice is available, visit the Central Index of Swiss Trade Reasons and type the name under which you wish to operate.
- SA
- LLC
- SnC
- Sole proprietorship
Number of People Required for Opening
Most companies can be created by a single person, with the exception of the SnC, which is a collective company.
- SA
- LLC
- SnC
2 associates minimum
- Sole proprietorship
It should be noted that if the entrepreneur is a foreigner or a Swiss not domiciled in Switzerland, he or she will have to associate with a person domiciled in Switzerland, who must have an up-to-date residence and work permit.
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Accounting Obligations
Joint-stock companies in Switzerland must keep full accounts in accordance with the Swiss Code of Obligations. The CO requires that a balance sheet, income statement and notes be presented.
- SA
- LLC
- SnC
- Sole proprietorship
Tax Obligations
Once again, when submitting your company's tax return, you need to distinguish between legal entities and individuals. Corporations are required to submit a separate tax return, whereas partnerships are required to integrate this with their private tax return.
- SA
- LLC
- SnC
- Sole proprietorship
Social Security Obligations
Depending on the legal form of your company, you will have different social security obligations.
- SA
- LLC
- SnC
- Sole proprietorship
Benefits by Choice
Find out more about the main advantages of each legal form in Switzerland.
- SA
- Shareholder anonymity
- Favorable tax treatment
- Limited liability
- Greater credibility
- Easier sale of shares
- LLC
- Favorable tax treatment
- Limited liability
- Easier sale of shares
- Minor capital contribution (CHF 20,000)
- Conversion into a Société Anonyme without liquidation possible
- SnC
- No capital required
- Simplified creation
- Simple accounting up to CHF 500,000
- No double taxation
- Sole proprietorship
- No capital required
- Simplified creation
- Simple accounting up to CHF 500,000
- No double taxation
- Registration in the RC mandatory only for amounts over CHF 100,000
Disadvantages According to Choice
- SA
- High capital contribution (CHF 100,000)
- Obligation to keep accounts under CO
- Costly administrative procedures
- High start-up costs
- Double taxation
- LLC
- Obligation to keep accounts under CO
- Costly administrative procedures
- High start-up costs
- Double taxation
- Managers, partners, bodies, capital, etc. are published in the Commercial Register.
- SnC
- Unlimited joint and several liability
- Less credibility than an SA or Sàrl
- Unfair profit sharing
- Sole proprietorship
- Unlimited contractor liability
- Less credibility than an SA or Sàrl
Conclusion
It's important to make your choice by assessing your situation in the short, medium and long term. Because the consequences of selling or transferring a business can be neutralized if you think about it early enough.
Our expert advice
If you want to set up a company with several partners, the Société en Nom Collectif (partnership) is not recommended. Because of the unequal distribution of profits between partners and the unlimited liability incurred, we recommend the Sàrl.
Frequently Asked Questions
What is the best legal form for an e-commerce business in Switzerland?
It all depends on your objectives. If, for example, you're on your own and want to set up a Shopify store to sell products or services, it's advisable to set up a limited liability company.
It's also possible to set up a sole proprietorship, although this will depend on the risks involved and the image you wish to project as a company, with a limited liability company being more credible.
What is a simple partnership in Switzerland?
A simple partnership in Switzerland is not a company per se, but a contract between two or more people whose purpose is to pursue a common goal.
It is generally created as part of joint ventures for short periods.
The société simple has no legal personality.
How can I open a business in Switzerland?
To open a business in Switzerland, you'll need to pay a number of different fees, depending on the legal structure you choose.
Can you help me set up my company in Switzerland?
Of course you can. Our trustee can help you set up a company in Switzerland or obtain self-employed status.
What is the difference between a SA and a Sàrl in Switzerland?
The SA and the Sàrl are both corporations. However, theminimum contribution for a corporation is CHF 100,000 (to be paid up at least at 50%), while the minimum contribution for a limited liability company is CHF 20,000.
Both have shares, but the shareholders of a public limited company are anonymous. This makes the SA particularly suitable for larger companies, but also for start-ups needing to raise capital.
What other legal forms are there in Switzerland?
Depending on the purpose of the activity, there are other forms of company:
Can I set up a company in Switzerland as a foreigner?
It's perfectly possible to set up a company in Switzerland from abroad. To do so, you'll need an official address where you can receive your mail. Our company domiciliation in Geneva offers you the opportunity to establish your business at a strategic address.
