The different legal forms in Switzerland:
Which one suits your company?

The decision for the right legal form is a key step when setting up a company in Switzerland. This choice influences numerous aspects, including liability, taxes, administrative requirements and the flexibility of company management. Each legal form has its own advantages and disadvantages, which vary depending on the objectives, size and risk of the company.

In this blog post, we take a look at the most important legal forms in Switzerland and explain the main features, advantages and disadvantages as well as the start-up costs involved. This will give you a better idea of which structure is right for your company.

Sole proprietorship

Features

The sole proprietorship is the simplest and most frequently used legal form in Switzerland, especially by freelancers. freelancers, small businesses and self-employed. It belongs to a single person who bears the full risk but also claims all the profits for himself.

• Minimum capital: No minimum capital required.
• Liability: The owner has unlimited personal liability with all his private assets.
• Commercial register entry: Only required if turnover exceeds CHF 100'000 is achieved.

Advantages

• Simple and inexpensive: Setting up a sole proprietorship is unbureaucratic and involves low costs.
• Full freedom of decision: The owner has sole control over all business decisions.
• Low administrative requirements: Less time-consuming bookkeeping and no obligation for double-entry bookkeeping (up to CHF 500,000 turnover).

Disadvantages

• Unlimited liability: The owner is liable with all his private assets for all debts of the company.
• Raising capital: Attracting investors is difficult as there are no shares in the company.
• Limited growth opportunities: The continued existence of the company is strongly tied to the owner.

Formation costs

Setting up a sole proprietorship is very inexpensive. The fees for a voluntary entry in the commercial register are approx. CHF 150-300.

General partnership (KG)

Features

A general partnership is founded by at least two natural persons who run the business together. This form is particularly popular with small and medium-sized companies.

• Minimum capital: No minimum capital required.
• Liability: The partners are personally, jointly and severally liable without limitation with their private assets.
• Commercial register entry: Mandatory.

Advantages

• Low formation costs: Forming a general partnership is simple and inexpensive.
• Flexibility: The cooperation between the shareholders can be structured flexibly.
• Distribution of responsibility: Management and risks are divided among several partners.

Disadvantages

• Unlimited liability: All partners are jointly liable for the debts of the company, including for the mistakes of other partners.
• Difficult succession planning: The departure of a shareholder requires an amendment to the articles of association.

Formation costs

The formation costs for a general partnership are CHF 400-800depending on the canton and individual requirements.

Limited liability company (GmbH)

Features

The limited liability company is one of the most popular legal forms in Switzerland and offers the advantage of limited liability. It is particularly suitable for small and medium-sized enterprises (SMEs) that wish to limit their liability.

• Minimum capital: CHF 20,000, which must be paid up in full.
• Liability: The liability of the shareholders is limited to the company's assets.
• Commercial register entry: Mandatory.

Advantages

• Limited liability: The partners are only liable with the company's assets and not with their private assets.
• Flexibility: The GmbH allows a clear structure of management and responsibilities.
• Visibility: The GmbH is regarded as a professional and trustworthy legal form.

Disadvantages

• Capital commitment: CHF 20,000 must be paid in full into the capital contribution account when the company is founded.
• Higher formation costs: Setting up a GmbH is more expensive and more complex than setting up a sole proprietorship or general partnership.
• Public visibility: The shareholders and managing directors are publicly visible in the commercial register.

Formation costs

The formation of a limited liability company usually costs between CHF 1,000 and CHF 3,000including notary fees, entry in the commercial register and capital contribution.

Public Limited Company Company

Features

The Public Limited Company Company is the preferred legal form for larger companies or companies with high capital requirements. It offers the possibility of issuing shares and thus raising capital.

• Minimum capital: CHF 100,000, of which at least CHF 50,000 must be paid in at the time of formation.
• Liability: Liability is limited to the company's assets.
• Commercial register entry: Mandatory.

Advantages

• Limited liability: Shareholders are only liable with their share capital.
• Raising capital: The Public Limited Company can raise capital relatively easily by issuing shares.
• Flexible ownership structure: Shares can be transferred easily.

Disadvantages

• High formation costs: The formation of a Public Limited Company is more complex and involves high costs.
• Strict regulation: The Public Limited Company is subject to strict regulations, particularly with regard to accounting and auditing.
• Complex structure: Decision-making processes are often slower and less flexible.

Formation costs

The formation of a Public Limited Company usually costs between CHF 1'500 and CHF 10'000depending on the complexity of the formation and the notary fees.

Conclusion: The right legal form for your company

The choice of the right legal form depends on many factors: Business risk, capital requirements, number of parties involved, liability issues and long-term growth objectives. Sole proprietorship and general partnerships are well suited to smaller, lower-risk businesses that want to start up without major administrative expenses. For companies with higher liability risks or high-growth ambitions limited liability companies and Public Limited Company offer the necessary legal security and flexibility.