Legal Forms for Companies in Switzerland

In Switzerland, there are various legal forms: sole proprietorship (no minimum capital), LLC (CHF 20,000 minimum capital), AG (CHF 100,000 minimum capital). The choice significantly influences liability, taxes, and administrative burden.

Choosing the right legal form is decisive for business success. Here are all important legal forms in detail:

Sole Proprietorship:

Characteristics:

• Minimum capital: None required
• Liability: Unlimited with private assets
• Owner: One natural person
• Commercial register entry: Mandatory from CHF 100,000 annual turnover
• Management: Exclusive decision-making power

Tax treatment:

• Profit tax: As income tax at the owner
• Capital tax: No separate capital tax
• VAT: From CHF 100,000 turnover
• Social insurance: Self-employed status

Advantages and disadvantages:

• Advantages: Simple formation, full control, no minimum capital requirements
• Disadvantages: Unlimited liability, difficult financing, no succession planning
• Suitable for: Freelancers, consultants, small service providers

LLC (Limited Liability Company):

Basics:

• Minimum capital: CHF 20,000 (at least 50% paid in)
• Partners: 1 to unlimited
• Management: At least 1 managing director
• Liability: Limited to company assets
• Residence requirement: Managing director must have Swiss residence

Capital structure:

• Share capital: CHF 20,000 - CHF 2,000,000
• Shares: Freely transferable
• Capital payment: At least CHF 10,000 at formation
• Additional payment obligation: Can be set in articles

Bodies:

• Partners' meeting: Supreme body
• Management: Operational management
• Auditing body: From CHF 10 million turnover or 50 employees

Tax aspects:

• Profit tax: Separate taxation of the company
• Capital tax: On equity
• Withholding tax: On profit distributions
• Tax optimization: Various structuring possibilities

AG (Stock Corporation):

Main features:

• Minimum capital: CHF 100,000 (at least 20% paid in)
• Shareholders: Unlimited number
• Board of directors: At least 3 members
• Management: Operational management
• Liability: Limited to company assets

Capital structure:

• Share capital: CHF 100,000 - CHF 10,000,000
• Share categories: Registered, preferred, bearer shares
• Liberation: At least CHF 50,000 at formation
• Capital increase: Possible by resolution

Bodies:

• General meeting: Supreme body
• Board of directors: Strategic management
• Management: Operational implementation
• Auditing body: Mandatory (exceptions possible)

Governance:

• Voting rights: Usually per share
• Information rights: Shareholder rights
• Minority protection: Legal provisions
• Transparency: Disclosure obligations

Partnerships:

General Partnership:

• Partners: At least 2 persons
• Liability: Joint and unlimited
• Management: All partners
• Profit distribution: Per capita or by agreement

Limited Partnership:

• General partners: Unlimited liability
• Limited partners: Liability limited to contribution
• Management: Only general partners
• Capital contribution: Limited partners contribute capital

Special forms:

Cooperative:

• Purpose: Promotion of members
• Number of members: At least 7 persons
• Liability: Limited to cooperative assets
• Shares: Not freely transferable

Association:

• Purpose: Non-economic
• Members: Natural or legal persons
• Liability: Limited to association assets
• Taxes: Under certain conditions tax-exempt

Foundation:

• Purpose: Public benefit, religious, or family
• Assets: Permanently dedicated
• Bodies: Foundation board
• Supervision: By authorities

Decision criteria:

Liability:

• Risk appetite: Personal vs. limited liability
• Asset protection: Separation private/business assets
• Creditor protection: Capital protection provisions

Financing:

• Equity: Capital requirements
• Debt: Creditworthiness
• Investors: Participation possibilities
• Public listing: Only possible for AG

Tax considerations:

• Profit taxation: Personal vs. corporate
• Optimization possibilities: Tax planning
• Double taxation: On profit distribution

Administrative burden:

• Accounting: Requirements by legal form
• Reporting: Annual accounts, reports
• Compliance: Law adherence
• Costs: Ongoing administrative costs

Change of legal form:

Possibilities:

• Sole proprietorship to LLC: Most frequent change
• LLC to AG: With growth
• Transformation: Legal procedures
• Merger: Combination of companies

Procedure:

• Valuation: Determine company value
• Formalities: Notarial authentication
• Taxes: Tax consequences
• Costs: Transformation costs

Industry specifics:

Fintech:

• Regulation: FINMA requirements
• Capital requirements: Increased minimum capital
• Governance: Enhanced requirements

Medtech:

• Liability: Product liability important
• Patent protection: IP strategies
• Regulation: Swissmedic requirements

IT/Software:

• Growth: Scalability important
• Investors: VC financing
• International expansion: Holding structures

Costs and expenses:

Formation costs:

• Sole proprietorship: CHF 500-2,000
• LLC: CHF 2,000-8,000
• AG: CHF 5,000-15,000
• Additional costs: Consulting, domicile

Ongoing costs:

• Accounting: CHF 2,000-10,000 per year
• Taxes: According to profit
• Audits: CHF 3,000-15,000 per year
• Administration: CHF 1,000-5,000 per year

Conclusion: The choice of legal form depends on liability willingness, financing needs, tax optimization, and administrative burden. Professional advice is recommended.