Which legal form is better suited for young entrepreneurs? GmbH and AG

When speaking of a public limited company (AG), one is principally referring to a corporate entity. In contrast to a limited liability company(GmbH), the relationship to the owners is less relevant.

The GmbH as a hybrid of a joint stock company and a limited partnership

The Swiss commercial code defines the GmbH (the Swiss version of a limited liability company) as a “personal capital company” (Swiss Code of Obligations Art. 772 Para. I).

Legal forms of companies in Switzerland

Under Swiss law, there are basically four legal forms of companies:

How many people are required in order to establish a GmbH (limited liability company)?

Under the new GmbH regulation (into force since 1 January 2008), a GmbH can be established by a single person (art. 775 of the Swiss Code of Obligations).

Establishing a GmbH (limited liability company) – does the manager have to be a shareholder at the same time?

No, under the applicable law, the manager of a GmbH must not necessarily be a shareholder of the company.

What is the allowed share capital amount for a Limited Liability Company (GmbH)?

The old Limited Liability Company (GmbH) right still provided the option to only pay in one half of the minimum share capital requirement of CHF 20'000.  Under the new law (in force since 1st January 2008), this is not possible any more.

Losses after the foundation – possibility of adjustment against future profits (GmbH or corporation (AG))

Losses of the first business years of a GmbH or a corporation (AG) may be carried forward and allocated against future profits. Normally, it is possible to carry forward losses of the last seven years.

Initial capital deposit on incorporation of an AG or GmbH: Is it necessary for the deposit to take place in Swiss Francs or is it also possible to use other currencies?

The initial capital of a GmbH (Swiss form of a limited liability company) or a AG (Aktiengesellschaft, Swiss form of a corporation), must not necessarily be deposited in Swiss Francs. Rather, it is possible to use euros or other currencies as well.

Formation liability for AG and GmbH / Founder’s and involved person’s liability

Founders, members of the administrative board and all people who participate in a corporation's formation process are subject to the formation liability in accordance with art. 753 of the Swiss Code of Obligations. This applies to the formation of a GmbH too. Formation liability means that all participants to the formation ...

Choosing the right legal form – two-person partnership – which legal form is best suited for a two-person partnership?

Question: I am a tailor and I would like to set up my own business. I was thinking that it would be reasonable to share a studio with a partner in order to halve the costs for rent, machines etc. How could I set up such a partnership? Were do ...