Discover the various company structures available in Switzerland, including Stock Corporations (AG), Limited Liability Companies (GmbH), Partnerships, and more. Learn about the legal requirements, advantages, and steps to complete your company registration effectively. Get expert guidance to choose the best structure for your needs.
The one who would be interested to set up a business should know that company registration is essential, and corporate legislation can offer a variety of company structures, each with distinct legal and operational characteristics. Here at DGVM we can offer you a detailed description of what can expect the future business owner:
1. Stock Corporations (AG): These are popular for larger businesses and allow for the issuance of shares. They require a minimum share capital of 50’000CHF and provide limited liability to shareholders [1][2]. For company registration of an AG, you need to follow these steps:
- Choose wisely a Company Name: The name must be unique and end with “AG”[9].
- Open a share Capital Payment Account: Deposit at least CHF 50,000, which is part of the minimum share capital of CHF 100,000.
- Prepare Founding Documents: Draft the Articles of Association and other necessary documents, and have them notarized.
- Company registration with the Commercial Register: Submit all documents, including proof of share capital deposit. [1]
- Appoint Directors: At least one director must be a Swiss resident, which is essential for company registration. Meaning the person needs to have at least B permit. And now it possible for the people with S Status to register a company in Switzerland.
2. Limited Liability Companies (GmbH): Suitable for small to medium enterprises, they offer limited liability and require less capital than stock corporations (AG) [1][2]. For successful company registration of a GmbH in Switzerland, certain essential elements and procedures must be followed. Below our DGVM team collected for you a detailed overview of what needs to be included in the company registration process:
1. A GmbH requires a minimum share capital of 20,000CHF which must be fully contributed at the time of bank account opening. This should be an official transaction and preliminary Swiss bank make a strict compliance check of all the shareholders, the same applies to the AG.
2. Founders: At least one founder is necessary, who can be a natural or legal person. A single-member GmbH is permissible [11].
3. Articles of Association: This document must be notarized and should include:
– Company name (must include “GmbH”)
– Purpose of the company
– Registered address in Switzerland
– Share capital and contributions of each shareholder
– Management structure and rules for shareholder meetings[11].
4. Registration: The GmbH must be registered in the commercial register, which grants it legal personality. This involves notarization of the articles of incorporation and partnership agreement. And the submission of the requests to the commercial register. The expenses associated with registering in the commercial register differ based on the company’s legal structure. The duration for registration can range from 5 to 60 days, depending on the complexity and workload of the specific commercial register office involved [12].
5. Management Structure: The GmbH must have a management board, which can be appointed at the time of incorporation or later. The shareholders’ meeting serves as the highest decision-making body [14]. At least one member must reside in Switzerland.
6. Liability: The liability of shareholders is limited to their contributions to the company’s capital, protecting personal assets from business debts unless otherwise specified in the articles of association[13].
Both GmbH and AG structures provide limited liability to their shareholders, making them attractive options for entrepreneurs. The incorporation process involves specific legal requirements, including establishing a minimum capital, drafting articles of association, and registering with the appropriate authorities.
3. Partnerships: These include general and limited partnerships, where partners share liability and taxation responsibilities[15].
In Switzerland, there are three primary legal forms of partnership, each with distinct characteristics and implications:
Types of Partnerships:
1. Simple Partnership (einfache Gesellschaft):
– This is a contractual relationship between two or more parties who come together to achieve a common goal. It is often used for specific projects and is typically dissolved once the objective is achieved. The simple partnership does not have its own legal personality and cannot be registered in the commercial register.
2. General Partnership (Kollektivgesellschaft):
– A general partnership is formed by two or more individuals who operate a business together. All partners share unlimited liability for the debts and obligations of the partnership. This form is commonly used by small businesses, such as local craftsmen and service providers. General partnerships are registered in the commercial register, and partners are taxed individually on their share of the profits.
3. Limited Partnership (Kommanditgesellschaft):
– A limited partnership consists of at least one general partner with unlimited liability and one or more limited partners whose liability is restricted to their capital contribution. This structure allows for greater flexibility in funding, as limited partners can invest without being involved in management. Limited partnerships are also registered in the commercial register and are subject to similar tax treatment as general partnerships.
Legal Framework
The statutory basis for partnerships in Switzerland is primarily found in the Swiss Code of Obligations (CO), which outlines the formation, rights, and obligations of each partnership type. The partnerships are not considered separate legal entities, meaning that partners are personally liable for the debts incurred by the partnership, particularly in general and simple partnerships [15].
Key Considerations
– Liability: Partners in a general partnership face unlimited liability, while limited partners in a limited partnership enjoy limited liability.
– Formation: Establishing a simple partnership requires minimal formalities, while general and limited partnerships must be registered in the commercial register.
– Taxation: Partnerships are taxed transparently, meaning profits are taxed at the individual partner level, not at the partnership level.
Choosing the appropriate legal form for a partnership in Switzerland depends on various factors, including the nature of the business, the desired level of liability, and the partners’ investment preferences. Consulting with DGVM is advisable to navigate these options effectively[1][4].
4. Sole Proprietorships: Ideal for small businesses, with the owner bearing full liability[1][5]. You can just register it is on your own personal address and name the company after your own personal name.
5.Associations: In Switzerland, associations are a popular legal structure for various organizations, including those focused on cultural, social, and sporting activities. Here are the essential aspects that business owners should know about forming and operating an association in Switzerland:
Legal Framework
– Swiss Civil Code: Associations are governed by Articles 60 to 79 of the Swiss Civil Code. They are defined as organizations formed for a common purpose that is not primarily for profit.
– Legal Entity: An association is considered an independent legal entity, meaning it can own property, enter into contracts, and be liable for its debts. Members are generally not personally liable for the association’s obligations unless specified otherwise in the articles of association.
Formation Process
1. Founding Members: At least two individuals or legal entities are required to establish an association.
2. Articles of Association: The founding members must draft and approve written articles of association during a founders’ meeting. These documents outline the association’s purpose, governance structure, and operational rules.
3. Founders’ Meeting: This meeting is crucial for adopting the articles of association, electing board members, and documenting the establishment of the association. Minutes of this meeting should be recorded and signed.
4. Commercial Register: Associations must register with the commercial register if they conduct commercial activities or exceed certain thresholds in terms of total assets, sales revenue, or employee count.
Operational Considerations
– Management Structure: Associations typically have a general assembly (composed of all members) and a board of directors. The board is responsible for day-to-day operations and decision-making.
– Financial Management: Associations must maintain orderly accounts, especially if they are required to register in the commercial register. This includes preparing annual financial statements.
– Taxation: Non-profit associations may qualify for tax exemptions, but they must apply to the relevant tax authority to confirm their status. Associations engaged in commercial activities may be subject to corporate taxes [16].
Key Points for Business Owners
– Purpose and Goals: Clearly define the purpose of the association, as it must be aligned with the greater good and not primarily profit-driven.
– Membership: Ensure that there are enough founding members who are committed to the association’s goals.
– Legal and Financial Advice: It’s advisable to consult with legal and financial experts to navigate the complexities of forming and managing an association effectively.
– Compliance: Regularly review compliance with legal obligations, including potential registration requirements and financial reporting.
By understanding these key aspects, business owners can effectively establish and manage an association in Switzerland, leveraging its benefits for community-oriented or non-profit activities.
DGVM can provide valuable assistance with business registration in Switzerland. We can help prepare and review all necessary documentation required for business registration, ensuring everything is complete and accurate. We can advise on the most suitable business structure (e.g. LLC, corporation, partnership) based on your specific needs and goals. In addition to this, we can assist with checking name availability and reserving your desired business name. By handling the administrative details, our DGVM consultants allow you to focus on other aspects of launching your business.
Citations:
[1] Registering a Company – KMU Admin
[2] Company Formation in Switzerland – Regulated United Europe
[3] CIO Programme | Deloitte Switzerland
[4] Spotlight: Corporate Leadership in Switzerland – Lexology
[5] Setting Up a Company in Switzerland: Different Types of Companies
[6] Spotlight: Corporate Leadership in Switzerland – Lexology
[7] List of Legal Entity Types by Country – Wikipedia
[8] The Role of a CIO – Robert Walters Middle East
[9] Setting Up a Business in Switzerland | Expatica
[10] Commercial Register: How Does it Work? – KMU Admin
[11] Overview Swiss LLC GmbH – Grant Thornton
[12] Registering a Company – KMU Admin
[13] Limited Liability Company – KMU Admin
[14] Choosing Legal Structure: LLC Sarl – KMU Admin
