Firms

Prerequisites

All citizens of the European Union can go on their own and open a company in Switzerland. Whether it is a commercial activity in one of the many cantons, a shop in Lucerne or a startup in Zurich, natural and legal persons, residents and foreigners, can at any time decide to set up a company, to become part of a company already existing and even to transfer an Italian company to Switzerland.

An Italian citizen who wishes to live in Switzerland and open a company can therefore do so without problems. Of course, there are also special cases: in the event that you decide to start a limited company (SA), it must be borne in mind that most of the members of the board of directors must have tax residence in Switzerland. Similar speech with the Limited Guarantee Company (SAGL), for which at least one of the directors must be resident in Switzerland.

Having clarified the concept of who, let’s move on to the how.

The first step is to tackle different phases:

• Market analysis
• The business plan (investment plan)
• The choice of an appropriate legal form
• Registration in the commercial register
• Intellectual property

In this article we focus in particular on the third phase, or the “choice of an appropriate legal form”: a lot will depend on whether you want to open a sole proprietorship, or look for a partner and go into business together. Not all legal forms are suitable for every business.

The right legal form for your business

Partnerships and corporations differ mainly in the assumption of risk. Anyone who wants and can assume the risks and the responsibility of the credits with his own assets, can simply register as an individual firm in the commercial register. Instead, entrepreneurs who start a business with colleagues will be more advantaged in setting up a general partnership or limited partnership.

Anyone who wants to take less financial risks can limit themselves to a certain amount by creating a capital company, i.e. a limited liability company (Sagl) or a limited company (SA). It is also possible that the entrepreneurial activity will take the form of an association or a cooperative society.

Here are some criteria for choosing the desired legal form:

• Capital: Formation expenses, capital requirements and minimum capital vary depending on the legal form. In particular, it is good to consider the capital needs for the current year and for the next three to five years.

• Risk / Liability: Generally, the greater the risk of the business or its financial commitment, the more recommended it is to choose a limited liability company.

• Autonomy: depending on the legal form, its range of action is more or less limited. It is therefore necessary to determine if the entrepreneur wants to work alone or with partners and if he prefers to integrate investors or partners into his business.

• Taxes: Depending on the legal form, the income and business substance of the business and owner are subject to tax separately or jointly. High profits resulting from corporations tend to be taxed less than those from partnerships or sole proprietorships.

• Social security: certain social insurances are compulsory, optional or non-existent depending on the legal form. The owner of a sole proprietorship, for example, is not insured against unemployment and can choose whether to join a pension fund voluntarily. In the case of SA or Sagl, however, the owner is also considered an employee and as such is socially insured.

The three most common forms for SMEs in Switzerland are: the sole proprietorship, the limited company (SA) and the limited liability company (Sagl). In addition, we also take into consideration the limited partnership.

Individual firm

It represents the simplest and cheapest form of business. It is particularly suitable for entrepreneurs who intend to start a small business themselves. For example, think of a shop and a commercial activity in general, or of those professionals such as lawyers and architects. If you choose to open a sole proprietorship, the person is required to be domiciled in Switzerland, therefore to have a valid residence and work permit.

Unlike joint stock companies, in sole proprietorships the entrepreneur is the sole owner of his business, deciding on its actions and projects, sources of financing and use of resources. In short, he is solely responsible for the debts of his company and is liable with the assets of his company and his staff. In the joint stock company, on the other hand, liability is unlimited for all shareholders. The debts of the company are guaranteed, in addition to the corporate assets, with their personal assets.

Anonymous Company (SA)

The anonymous company is made up of one or more persons, including legal ones, who obtain money by receiving quotas and shares. It is similar to the Italian joint stock company (S.p.a.) and represents the fastest and most effective solution for most entrepreneurs. It is no coincidence that it is one of the most used forms to open a business or to transfer part of the business, which is thus managed by the Swiss company.

The obligatory capital of the company (also called share capital) must amount to at least 100,000 francs. As many shareholders as they wish can participate in the share capital. The shares can be bearer and / or registered; their nominal value must amount to at least one cent.

At least one person with administrative duties must be domiciled in Switzerland and have a valid residence and work permit.

Limited Guarantee Company (Sagl)

The Limited Guarantee Company is a mixed form between limited companies and general partnerships. To be established it needs one or more natural and / or legal persons.

The initial share capital must amount to at least 20,000 francs, while the maximum capital may be up to 2,000,000 francs and as many shareholders as they wish can participate, registered as shareholders in the Commercial Register.

The par value of the shares of a limited liability company must amount to at least 100 francs (91 euros). The formation costs for an SAGL are slightly lower than for a limited company.

Limited partnership

It is a juridical form that needs only two natural persons to be constituted and begins with a social contract between the founders. At least one of the partners, the so-called general partner, is liable with his own private assets in an unlimited manner for the commitments of the company.

The other partners, the so-called limited partners, are liable only up to a specific contribution of assets, called limited share capital. The latter are not part of the company management, they only have limited control rights and are often subject to another share in profits and losses than general partners.

This type of company form is chosen when the sole proprietorship needs additional funds, but does not want to extend the management of the company to new members.