The Main Differences Between an LLC and a PLC
When choosing a legal structure for a business in Switzerland, two popular options are the Limited Liability Company (LLC) and the Public Limited Company (PLC), but with important differences. While these two entities share several similarities, there are some key differences that business owners should be aware of. Below is a summary of the most important distinctions.
Key Differences Between LLC and PLC
1. Minimum Capital Requirement and Payment
- LLC: The capital stock of an LLC is CHF 20,000, which must be fully paid up upon incorporation.
- PLC: The capital stock for a PLC is CHF 100,000, with the option to pay up only 20%, as long as the amount exceeds CHF 50,000. This allows more flexibility in fund-raising while maintaining solvency.
2. Minimum Nominal Value of Shares
- LLC: The minimum nominal value for shares is CHF 100.
- PLC: Shares in a PLC currently have a minimum nominal value of 1 cent. However, from 1 January 2023, this lower limit will be abolished, allowing values higher than zero.
3. Shareholder Obligations
- LLC: Shareholders may be subject to additional obligations, such as statutory ancillary performance or non-compete agreements.
- PLC: Shareholders are only legally required to pay up their shares and are not subject to additional obligations.
4. Capital Increase
- LLC: Only ordinary capital increases are permitted.
- PLC: In a PLC, capital may be increased through ordinary, authorised, or conditional increases. From 1 January 2023, a capital fluctuation band will be introduced, adding more flexibility.
5. Management Structure
- LLC: Follows a principle of self-organisation, where the partners typically manage the company.
- PLC: Management is vested in the board of directors, with shareholders having no direct management responsibilities.
6. Anonymity of Shareholders
- LLC: Shareholders’ names, domiciles, and share values are published in the commercial register, making share transfers public.
- PLC: Shareholders in a PLC can remain anonymous, and shares can be transferred without involving the commercial register.
7. Transfer of Shares
- LLC: The transfer of shares must be recorded in the commercial register, and may require consent from other shareholders.
- PLC: Share transfers are more flexible and can be done without the intervention of the commercial register.
8. Exclusion of Shareholders
- LLC: It is possible to exclude a partner via legal action.
- PLC: Shareholders generally cannot be excluded from the company.
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