The limited liability company (Sàrl) is one of the most common legal forms for small and medium-sized enterprises (SMEs) in Switzerland. It offers a flexible structure tailored to the needs of entrepreneurs, with liability limited to the contributions made by the partners. In this article, we will explore in detail the characteristics, advantages and obligations of the Sàrl under Swiss law. We will also look at the key steps involved in setting up and running a limited liability company in Switzerland.
The Sàrl is a legal entity distinct from its partners, giving it its own legal personality. It can therefore acquire rights and obligations, own property and take legal action.
The minimum share capital for a limited liability company in Switzerland is CHF 20,000, which must be fully paid up on incorporation. The share capital is divided into shares with a par value of at least CHF 100. Contributions in kind are also possible, provided they are valued by an approved auditor and mentioned in the articles of association.
A limited liability company may be formed by one or more individuals or legal entities, of Swiss or foreign nationality. Partners are liable for the company’s debts up to the amount of their contributions, which limits their personal liability.
A GmbH is managed by one or more managing directors, who may be partners or third parties. The managing partners are entered in the Commercial Register and have the power to represent the company in dealings with third parties.
One of the main advantages of the Sàrl is that partners “liability is limited to their contributions. In the event of bankruptcy or debt, the partners” personal assets are protected, provided they have not acted fraudulently or negligently.
The Sàrl offers great flexibility in terms of governance and decision-making. The articles of association can lay down specific rules on profit distribution, the transfer of shares or the powers of the managers, enabling the company to be adapted to the needs of the partners.
The Sàrl is often perceived as a more serious and professional structure than the sole proprietorship, which can facilitate access to credit and business partners.
Limited liability companies must keep accounts in accordance with Swiss standards, including a balance sheet, income statement and notes. The accounts must be kept for 10 years from the end of the financial year. LLCs are also required to submit their accounts to an approved auditor if they exceed certain sales, balance sheet or workforce thresholds.
A limited liability company must hold an annual general meeting to approve the accounts, appoint the managing partners and make other important decisions. The Articles of Association may lay down other rules concerning convocation, quorums and majorities.
The limited liability company must be registered with the Swiss Commercial Registry, which publishes certain information such as the company name, registered office address, share capital, managers and partners. Subsequent changes, such as the transfer of shares or a change of managing partners, must also be reported to the Commercial Register.
The Articles of Association define the company’s rules of governance and operation. They must be drawn up in writing and signed by all partners.
Partners must contribute the minimum share capital of CHF 20,000, either in cash or in kind. Contributions in kind must be valued by an approved auditor.
Once the articles of association have been signed and the capital contributed, the limited liability company must be registered in the Commercial Register. This is usually carried out by a notary, who verifies the conformity of the articles and the legality of the company’s incorporation.
The limited liability company must keep accounts and file tax returns with the cantonal and federal authorities. It is subject to income and capital tax, as well as VAT if its sales exceed CHF 100,000.
If the limited liability company employs staff, it must comply with Swiss labor law, such as minimum wages, paid vacations, working hours and conditions of termination. The LLC must also pay social security contributions for its employees and comply with occupational health and safety regulations.
The transfer of shares in a limited liability company is subject to certain conditions, such as approval by the other partners or entry in the Commercial Register. The articles of association may contain specific clauses to facilitate or restrict the transfer of shares.
The LLC is an attractive legal form for entrepreneurs in Switzerland, thanks to its flexibility, limited liability and credibility. However, it also entails certain obligations, particularly in terms of accounting, taxation and governance. Before setting up a limited liability company, it is important to understand its characteristics and legal implications, and to consult a lawyer or notary specialized in Swiss law for personalized advice. Once the limited liability company has been set up, rigorous management and a good knowledge of legal obligations will ensure the company’s success and longevity.