Posts tagged "types of Swiss companies"

Types of Business Entities in Switzerland 

Switzerland is a popular destination for businesses due to its stable political and economic environment, as well as its favorable tax laws. Several different types of companies can be formed in Switzerland, each with its own set of characteristics and requirements.

Generally speaking, Swiss civil law differentiates between partnerships (sole proprietorships, partnerships with limited liability, general partnerships) and legal entities (public companies, limited liability companies). Based on her or his activities and strategic objectives, a foreign investor can select the most appropriate type of company. Creating a company usually takes no more than three weeks, and it can often be accomplished online.

A sole proprietorship

Sole proprietors conduct this type of business, and it must be registered with the commercial register. To be registered, it must produce at least CHF 100,000 gross income per year. The owner is personally responsible for the company’s operation (there are no limits on his/her liability), and the company is subject to taxes. Small businesses commonly use this type of organization.

Individual Partnership (Einfache Gesellschaft)

There is a difference between an ordinary partnership and a limited partnership because the latter is based on a contract of association between two or more partners and does not have the legal status of a company.

Rather than the partnership itself being liable for taxes, each partner is personally liable. Each partner is responsible for his or her private assets in the event of business debt. Commercial registers do not accept ordinary partnerships. Business organizations using this form are typically used for short-term activities or specific projects (consortia, joint ventures, etc.).

General partnership (Kollektivgesellschaft KG)

As a result of a contract of association between two or more individuals, a general partnership is formed to operate a commercial enterprise. It is necessary to register a general partnership on the commercial register and give it a trading name.

The general partnership in itself is not a legal entity, although it can acquire rights, incur liabilities, and take judicial action. Partners are jointly and severally liable for debts not only on the capital of the partnership but also on their private assets. These companies can only be set up by individuals, and their liability is limited to their capital.

Company limited (Kommanditgesellschaft)

As with a general partnership, a limited partnership allows only one person to be held liable without limitations, while others are liable only up to their capital contribution. Partnerships with unlimited liability can only be formed by individuals, while partnerships with limited liability can also be formed by legal entities such as corporations.

GmbH or LLC (Limited Liability Company)

Legal entities with fixed capital are known as limited liability companies. 20,000 CHF is the minimum capital amount, and it must be paid in cash or kind in full. A minimum contribution of CHF 100 is required from each partner (individual or company). Non-Swiss citizens may be partners and managers. Except for appointing and dismissing management, directors and management of a limited liability company are entrusted with the same duties as those of a corporation. Managing the company without being appointed is the right and obligation of shareholders (principle of self-management). When a shareholder wishes to withdraw from the company, he or she may petition the court for permission to do so.

Public Company (Aktiengesellschaft, AG)

In Switzerland, public companies are the most common. A minimum of CHF 50,000 must be paid by the founders when the company is incorporated. Shares represent the company’s capital, which can be registered or bearer.

In conclusion

Switzerland offers a variety of options for businesses, from public limited companies to individual enterprises, each with its own advantages and disadvantages. The choice of the appropriate legal form depends on the specific needs and goals of the company. It is recommended that business owners consult with legal and financial experts before making a decision.