This article outlines five common Swiss business forms. Founders must choose a recognised form rather than create a hybrid. Understanding the options helps make the right decision, since changing form later often involves significant costs and time.
Sole proprietorship
A sole proprietorship is established by one person. It requires no starting capital and may be formed informally; commercial register entry becomes mandatory when annual turnover exceeds 100'000 CHF, though earlier entry is possible. The name must include the proprietor's surname. The main disadvantage is unlimited personal liability with private assets. A planned future sale or transfer is also more complicated than with a GmbH or AG.
General partnership
A general partnership suits small businesses with at least two natural persons. Commercial register entry is required for a commercial business. Like a sole proprietorship, it entails personal liability and more complex transfer. Naming is more flexible and invented names are allowed. It is particularly suited to small businesses closely linked to founders who do not want minimum capital requirements.
GmbH
GmbH means limited liability company. Liability differs from sole proprietorships and general partnerships: company capital generally answers for debts, unless the articles impose additional contribution obligations. Advantages include limited liability, minimum capital of 20'000 CHF and straightforward transferability. Disadvantages include double taxation and greater formation effort.
Company limited by shares
For a company limited by shares (AG), only company assets generally answer for debts, except where personal liability arises. The paid-in minimum capital may inspire greater commercial confidence. Disadvantages include minimum capital of 100'000 CHF, of which at least 50'000 CHF must initially be paid, and, as with a GmbH, double taxation.
Limited partnership
Limited partnerships play a smaller role in Switzerland. A limited partner, usually an investor, has subsidiary liability limited to an agreed amount. At least one general partner manages the business and has subsidiary, unlimited joint and several liability. Otherwise the structure resembles a general partnership.
Review the available legal forms before choosing the one suited to you and your business. We can advise you and assist with formation.