Company types in Switzerland

The most common types of company are the public limited company, Ltd (AG), the limited liability company, LLC (GmbH), the general partnership, and the sole enterprise. This summary provides you with an overview of these four company types.

Company types in Switzerland

Public limited company, Ltd (AG):

The public limited company, Ltd. (AG), is an important and popular legal structure in Switzerland. Foreign companies often use this legal form when establishing a subsidiary. An Ltd. (AG) is a corporation with a legal entity whose liabilities are covered exclusively by its own assets. The base capital, determined in advance, is divided into shares. The Ltd. (AG) is not only the ideal structure for large companies, it is also suitable for small and medium-sized companies. It is the most commonly used legal form for holdings and financial companies.

Requirements:

• Minimum capital: CHF 100,000.--

• Number of persons: at least one shareholder and one member of the board of directors, whereby these may be the same person.

• At least one shareholder with authorization to sign has to reside in Switzerland

Advantages:

• Widely anonymous for investors

• Limited liability

• Simple transfer of shares

Disadvantages:

• Costs

• Minimum Capital

Foundation costs: CHF 3,500 − 7,000 (including entry in the commercial register)

Limited liability company (GmbH):

A limited liability company, LLC, (GmbH) is a company with an own legal entity formed by at least one or more individuals or companies with a predetermined capital (nominal capital). Each partner participates by paying in an initial share of the capital. The partner's liability is limited to the predetermined nominal capital.

Requirements:

  • Minimum capital: CHF 20,000.--
  • Number of persons: at least one shareholder and one executive director, whereby these may be the same person.
  • At least one executive director has to have his domicile in Switzerland

Advantages:

  • Low minimum capital
  • Limited liability

Disadvantages:

  • Duty of publication of share transfers

Foundation costs: CHF 1,750 − 4,500 (including entry in the commercial register)

General partnership:

A general partnership consists of two or more natural persons who together form a corporation to run a trade, manufacturing, or other commercial business. All partners are jointly liable, with no limitations towards the company's creditors.

Requirements:

  • Number of persons: a minimum of two natural persons.
  • Corporation must have a domicile in Switzerland (no residency required)

Advantages:

  • No minimal capital necessary
  • Flexible circumstances of the business relationship (distribution of profit, activity)

Disadvantages:

  • Jointly unlimited liability of the partners
  • Depending on the canton there are no child benefits or training allowances
  • No unemployment compensation

Foundation costs: CHF 1,250 − 4,000 (including entry in the commercial register)

Sole enterprise:

One-man businesses usually engage in trade, manufacturing or commerce business and have no legal personality. This legal structure is often chosen by young entrepreneurs wanting to establish a small business on their own. Everyone can start up a one-man business any time and start working right away. No dedicated seed capital is needed. However, the proprietor is liable for debts incurring from the one-man business with his personal assets.

A one-man business can easily be transformed into a limited liability company or a public limited company at a later point. It is the easiest legal structure to dissolve.

Main purpose of the sole enterprise:

  • One-man businesses (painter business, hair dresser, artist, etc.)

Requirements:

  • Number of persons: only one person can be the owner.
  • Owner must have a domicile in Switzerland (no residency required)

Advantages:

  • Enables uncomplicated, formless activity
  • Not bound to company law
  • No minimal capital required

Disadvantages:

  • Unlimited liability of the owner with his private assets
  • No partners can be added to the business
  • Depending on the canton there are no child benefits or training allowances
  • No unemployment compensation

Foundation costs: CHF 700 − 1,200 (including entry in the commercial register)

This article has been submitted by STARTUPS.CH 

Public limited company, Ltd (AG):

The public limited company, Ltd. (AG), is an important and popular legal structure in Switzerland. Foreign companies often use this legal form when establishing a subsidiary. An Ltd. (AG) is a corporation with a legal entity whose liabilities are covered exclusively by its own assets. The base capital, determined in advance, is divided into shares. The Ltd. (AG) is not only the ideal structure for large companies, it is also suitable for small and medium-sized companies. It is the most commonly used legal form for holdings and financial companies.

Requirements:

• Minimum capital: CHF 100,000.--

• Number of persons: at least one shareholder and one member of the board of directors, whereby these may be the same person.

• At least one shareholder with authorization to sign has to reside in Switzerland

Advantages:

• Widely anonymous for investors

• Limited liability

• Simple transfer of shares

Disadvantages:

• Costs

• Minimum Capital

Foundation costs: CHF 3,500 − 7,000 (including entry in the commercial register)

Limited liability company (GmbH):

A limited liability company, LLC, (GmbH) is a company with an own legal entity formed by at least one or more individuals or companies with a predetermined capital (nominal capital). Each partner participates by paying in an initial share of the capital. The partner's liability is limited to the predetermined nominal capital.

Requirements:

  • Minimum capital: CHF 20,000.--
  • Number of persons: at least one shareholder and one executive director, whereby these may be the same person.
  • At least one executive director has to have his domicile in Switzerland

Advantages:

  • Low minimum capital
  • Limited liability

Disadvantages:

  • Duty of publication of share transfers

Foundation costs: CHF 1,750 − 4,500 (including entry in the commercial register)

General partnership:

A general partnership consists of two or more natural persons who together form a corporation to run a trade, manufacturing, or other commercial business. All partners are jointly liable, with no limitations towards the company's creditors.

Requirements:

  • Number of persons: a minimum of two natural persons.
  • Corporation must have a domicile in Switzerland (no residency required)

Advantages:

  • No minimal capital necessary
  • Flexible circumstances of the business relationship (distribution of profit, activity)

Disadvantages:

  • Jointly unlimited liability of the partners
  • Depending on the canton there are no child benefits or training allowances
  • No unemployment compensation

Foundation costs: CHF 1,250 − 4,000 (including entry in the commercial register)

Sole enterprise:

One-man businesses usually engage in trade, manufacturing or commerce business and have no legal personality. This legal structure is often chosen by young entrepreneurs wanting to establish a small business on their own. Everyone can start up a one-man business any time and start working right away. No dedicated seed capital is needed. However, the proprietor is liable for debts incurring from the one-man business with his personal assets.

A one-man business can easily be transformed into a limited liability company or a public limited company at a later point. It is the easiest legal structure to dissolve.

Main purpose of the sole enterprise:

  • One-man businesses (painter business, hair dresser, artist, etc.)

Requirements:

  • Number of persons: only one person can be the owner.
  • Owner must have a domicile in Switzerland (no residency required)

Advantages:

  • Enables uncomplicated, formless activity
  • Not bound to company law
  • No minimal capital required

Disadvantages:

  • Unlimited liability of the owner with his private assets
  • No partners can be added to the business
  • Depending on the canton there are no child benefits or training allowances
  • No unemployment compensation

Foundation costs: CHF 700 − 1,200 (including entry in the commercial register)

This article has been submitted by STARTUPS.CH 

Further reading

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