Types Of Legal Business Structures In Switzerland

If your company is considering opening a business or a branch office in Switzerland, it is important to know the types of legal business structures that exist in the country. There are specific national requirements for each business type including the minimum amount of funding capital the company must have, what percentage of business’ earnings must be set aside for a legal reserve and the number of employees needed for the establishment of a supervisory board.

Swiss Business Structures

The most common business types in Switzerland are:

  • Public Limited Companies
  • Limited Liability Companies
  • General Partnerships
  • Solo Enterprises

Public Limited Companies

Commonly known as AGs, which stands for Aktiengesellschaft, is a corporation that is owned by the shareholders. Aktiengesellschaft is the German word for corporation. This type of business structure is often used by foreign businesses establishing subsidiaries in Switzerland. The Swiss requirements for public limited companies are:

  • Minimum funding capital of 100,000 Swiss Francs (CHF)
  • There must be at least one shareholder and one supervisory board member.
  • One of the shareholders with signing authorisation must be a Swiss resident.

In addition, the shareholder and board member can be the same person and AGs have both a supervisory board, controlled by the shareholders, and a management board. At least five percent of the earnings must be set aside for an AG’s legal reserve.

Limited Liability Companies

In Switzerland, a limited liability company is referred to as a GmbH, which is Gesellschaft mit beschränkter Haftung in German meaning company with limited liability. This business structure is its own legal entity and can be formed by one or more persons or one or more companies. The requirements for GmbH’s are:

  • Minimum funding capital of CHF 25,000
  • If there are 500 employees or more, they must have a supervisory board.
  • There must be at least one shareholder and one executive director.

At least one of the executive directors of a GmbH must have a legal residence in Switzerland. The company must set aside at least five percent of their profits in a legal reserve.

General Partnerships

Two or more people who have formed a corporation can register as a general partnership. The corporation has to reside in Switzerland, but there is no residency requirement for anyone in the partnership. In this structure, all of the partners are jointly liable for the company’s debts and there is no limitation for the company’s creditors. In addition, there isn’t a minimum capital funding requirement for general partnerships.

Solo Enterprises

This is a company owned by one person and while there is not a capital funding requirement, the sole owner is responsible for all debts of the company and they can be taken from his personal assets. Anyone can establish a small business on their own and start working right away.

Prior to company registration in Switzerland, businesses that are required to have capital funding account must have put aside some of the money for their business. The percentage of funding required depends on the type of business your company is establishing.

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