How To Found A Public Limited Company
A public limited company is legally established once the notarised articles of association and application forms have been verified and published by the commercial register office. A public limited company makes it easier for people to have holdings in the company and keeps shareholders anonymous towards third parties. As a result, AGs are particular popular for start-ups that are on the hunt for funding or already have investors.
The key points are summarised below.
Suitability
The public limited company is particularly suited to businesspeople wishing to keep the entrepreneurial risk and associated liability separate
from their personal assets. In addition, the public limited company makes it possible for shares to be assigned without great outlay, making holdings or finding investors easier for employees.
Liability
In the case of public limited company the business risk lies with the legal entity, provided the directors and members of executive management have not taken any negligent decisions. Otherwise, liability is limited to the share capital. The share capital is a minimum of CHF 100,000, but just 50% of this needs to be paid up. In other words, if only 50% of the capital has been
contributed, the shareholders are personally liable for the remaining 50%.
Conversion
Public limited companies are rarely converted into different legal forms, but other legal forms are often created out of the AG if there are strategic restructurings.
Commercial Register
Setting up a public limited company requires an entry in the commercial register, so that a new legal entity can be established. Formal information and amendments must always be updated with the applicable commercial register office. No notification need be given for changes relating to the share register.
Advantages
The public limited company structure is particularly suitable for companies that want to ensure the flexibility to easily assign shares or that want to keep their shareholders anonymous.
Additional Advantages:
- Any company name can be chosen, to be followed by the letters “AG”
- The high share capital means higher credit quality
- People can participate in the company through shares
- Only the formal bodies of the company can be seen in the commercial register
Disadvantages
You need capital of CHF 100,000 to found a public limited company and it is more expensive than, say, a sole proprietorship.
Additional Disadvantages:
- Double tax burden on the income and assets of the company and the entrepreneur
- Greater administrative outlay Tags
