Legal forms of business in Switzerland: Everything you need to know to choose the best option

Switzerland is known for its thriving economy and successful businesses. Whether you are a first-time entrepreneur, an experimented entrepreneur or a foreign investor, it is important to understand the different legal forms of business in Switzerland in order to choose the one that best suits your situation.

Here are the main legal forms of business in Switzerland:

1. Sole proprietorship

The sole proprietorship is the simplest and most common form of business in Switzerland. It is often chosen by beginners who want to start a small business without too many formalities. In this type of business, the owner is responsible for all debts and obligations of the business. In other words, there is no legal separation between the business and the owner.

The sole proprietorship is easy to set up and does not require a minimum capital. However, it presents significant risks for the owner, who may lose his or her personal assets in the event of bankruptcy.

2. General partnership (GP)

A general partnership is a form of business in which two or more people join together to carry out a business activity. In a SNC, each partner is responsible for the debts and obligations of the business. The profits of the business are divided among the partners according to their shareholding.

The SNC is relatively easy to set up and does not require a minimum capital. However, it also presents significant risks for the partners, who are liable for all the debts of the business.

3. Swiss Limited liability company (Sàrl/GmbH)

The limited liability company is a form of business in which the owners are only liable to the extent of their capital contribution. This means that the debts and obligations of the company are separate from those of the owners. The owners of a GmbH are called “partners” and their liability is limited to the amount of their capital contribution.

The Swiss LLC is the most common form of company in Switzerland. It offers some protection to the owners and makes it easier to raise funds. However, the creation of a limited liability company requires a minimum capital of CHF 20,000 and involves more complex administrative formalities than sole proprietorships or partnerships.

4. Swiss Joint Stock (SA/AG)

The public limited company is a form of company in which the owners are shareholders and the management is carried out by a board of directors. In an SA/AG, the debts and obligations of the company are also separated from those of the owners. The shareholders are only liable to the extent of their capital holding.

The SA/AG is often used by SMEs and listed companies. It offers great flexibility in raising funds, but requires a minimum capital of CHF 100,000 and is a complex administrative structure. Shareholders also have voting rights, which depend on the number of shares they hold.

One of the advantages of the legal form of a public limited company (SA/AG) in Switzerland is that the names of the shareholders do not have to be published in the commercial register. This means that shareholders can remain anonymous, unlike other legal forms of business where the owners must be registered in public documents (Sàrl/GmbH).

This confidentiality can be an advantage for shareholders who prefer not to be publicly associated with a company, or for companies that do not want to reveal their ownership structure to competitors or other interested parties.

However, it is important to note that the names of the company’s directors must be registered in the commercial register, which means that this information is publicly available. In addition, the shareholders must be registered with the company itself, which means that the company will have information about the identity of its shareholders.

It is also important to remember that shareholder confidentiality is not absolute. Swiss courts may require disclosure of shareholder information in certain circumstances, such as criminal investigations or court proceedings.

In summary, although the SA/AG offers the possibility of keeping the names of shareholders confidential in the commercial register, it is important to take into account other factors that may affect shareholder confidentiality.

5. Limited Partnership (LP)

The limited partnership is a form of business in which there are two types of partners: general partners and limited partners. The general partners are liable for the debts and obligations of the company, while the limited partners are only liable for the amount of their capital contribution. The limited partners have no right to participate in the management of the company.

The SCS is often used in sectors where it is common to use outside investors, such as real estate or investment funds. However, it is less common than other legal forms of business in Switzerland.

In Switzerland, there are several legal forms of business, each with its own advantages and disadvantages. The choice of legal form will depend on several factors, such as the size of the business, the objectives of the entrepreneur and the complexity of the legal structure. It is important to understand the different legal forms of business in Switzerland before starting a business or investing in an existing business. If in doubt, it is recommended to consult an expert Swiss fiduciary for professional advice tailored to your situation.

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