PLC or LLC, which legal form to choose?
When it comes to starting a business, many people ask themselves whether it is better to choose a public limited company (PLC) or a limited liability company (LLC). Although the two types of company are very similar, there are some differences to consider.
Similarities
The PLC and the LLC have several things in common. Both are corporations with their own legal personality. In both cases, it is the company that is liable, not the partners. In addition, both types of company are required to run double-entry bookkeeping.
Differences
One of the main differences between the PLC and the LLC is the capital requirement. While it is possible to found a LLC with a mandatory capital of CHF 20,000 (CO 773), the share capital of the PLC must be at least CHF 100,000 (CO 621). In addition, the share capital of a LLC must be fully paid up. In contrast, for the PLC, it is possible to establish a company with a partial payment of 20% of the nominal value of the shares, of which at least CHF 50,000 must be paid into the capital payment account.
In addition, the transparency of the company’s ownership is different. While the shareholders of a PLC are held anonymous, the entry in the commercial register of a LLC clearly indicates who owns how many shares. The name, registered address and place of origin of the shareholders of a LLC are published in the commercial register. In contrast, shareholders of a PLC are not. In the case of registered shares, a shareholder is considered to be someone who is entered in the share register (CO 686 V). The share register is, however, a private register which is kept by the board of directors and is in principle not open to public inspection.
The two legal forms also differ with regard to the transfer of shares. The shares of a PLC can be transferred by means of a written transfer agreement followed by an entry in the share register. In contrast, the transfer of shares in a LLC is more complex. The change of partners must be announced to the commercial register and then published by the commercial register. In addition to the registration, the sales contracts and the minutes of the general meeting must be submitted to the commercial register.
Finally, in the case of the PLC, there is a presumption that the board of directors is competent for all matters not assigned to the general meeting (CO 716). In the LLC, the principle of self-organisation applies, with all partners in principle exercising joint management (CO 809 I).
PLC vs. LLC: Conclusion
In summary, it can be said that the LLC and the PLC are very similar legal forms. The main differences are the amount of capital, the anonymity or public nature of the partners and the transfer of shares.
Do you have any innovative business idea you would like to make come true? Use STARTUPS.CH experts to become self-employed.
Get started as Mompreneur: www.mom-preneur.ch/en/home
Get started as Dadpreneur: www.dad-preneur.ch/en/home
Get started as Seniorpreneur: www.senior-preneur.ch/en/home
Get started as Youngpreneur: www.young-preneur.ch/en/home
