How To Set Up A LLC
A LLC is legally established when the notarized articles of association plus the application forms have been verified and published by the commercial register office. The low minimum share capital of CHF 20,000 means the LLC is becoming an increasingly popular option for one-person operations, making it among the most frequently chosen legal forms in Switzerland. Below you will find a summary of the key points.
Suitability
The LLC is particularly suitable for businesspeople wishing to keep the entrepreneurial risk and associated liability separate from their personal assets. Opting for a LLC as a legal entity allows participations in the company to be clearly defined in the form of shares and divided among founders, employees and investors.
Liability
In the case of a LLC the business risk lies within the legal entity, provided no negligent decisions are taken by executive officers. Otherwise liability is limited to the share or company capital.
Conversion
Conversion into an public limited company (plc) is possible via an auditor and his/her notary.
Commercial Register
Setting up a LLC is requires an entry in the commercial entry so that a new legal entity can be established. Formal content and amendments must always be updated with the respective commercial register office.
Advantages
The LLC offers a structure which is very close to that of an plc. The low share capital compared with that of an AG appeals mainly to persons who wish to exclude the liability attached to a sole proprietorship, but who do not necessarily prefer an plc.
Additional advantages:
- The choice of company name is free if it is followed by the letters LLC
- Assets are treated separately for tax purposes, plus greater flexibility
- Persons can participate in the company through shares
Disadvantages
Setting up a LLC and performing the associated administrative tasks is costlier than with a sole proprietorship.
Additional disadvantages:
- Double fiscal burden on the income and assets of both the company and the entrepreneur
- Partners are not anonymous
- Transferring share ownership is a more laborious process than with an plc and must be recorded in the commercial register
