Setting up a limited liability company (LLC): the complete checklist

Question 1

Budget the start-up costs

Answer

The first step on the way to becoming a LLC is the budgeting of start-up costs. The minimum capital required is CHF 20,000. Then, using a detailed business plan, factor in every detail related to administrative costs and management fees. These include:

For advice on setting up a company: consulting fees from up to CHF 2,000;
Notary fees, which are related to the preparation of the start-up documents and can amount to between CHF 500 and CHF 2,000.

At SWISS COMPANY AG, setting up a LLC costs CHF 650, including start-up, consulting and notary fees.

A fee of CHF 500 to CHF 700 is charged for entry in the commercial register.

Question 2

Determine the company name

Answer

If you’ve chosen your company name, it will be automatically protected throughout Switzerland after registration in the commercial register. You are completely free to choose this company name, but you must add the legal form. The addition “GmbH” or “limited liability company” is therefore a mandatory part of the company name.

Question 3

Set the share capital

Answer

When setting up your GmbH, you must determine the share capital and the basic contribution of each co-owner. As soon as the participation of a co-owner in the initial capital reaches or exceeds one quarter (25 percent), the buyers or owners of the participation must notify the GmbH, who is the beneficial owner of the holding. It should also be noted: in order to be entitled to profits, each of the owners of the GmbH must be involved in the total capital with at least one parent share. The share capital (at least CHF 20,000) is divided into ordinary shares with a minimum value of CHF 100. You must deposit the share capital or contribute it in kind. Therefore, you need to choose a bank for the blocked account for the seed capital. It is only possible to release the capital if the company is registered in the commercial register.

Question 4

Name the management and the holder

Answer

You can set out on the adventure of setting up a GmbH alone or team up with other people. Therefore, it is necessary to build an impeccable organisation and to define the role of each individual. The articles of association may also regulate the management of the company in a different way; for example, by transferring the management of certain tasks to third parties.

Question 5

Draw up the notarial deed of incorporation

Answer

In order for your company to receive the status of a GmbH, a public notarisation of the founding decisions is required. If you write the statutes, they should be complete and contain the following points:

Company name;
Amount of share capital;
Purpose of your business;
Address of the company’s domicile;
The amount deposited by each of the holders (number and value);
Management;
Any contributions in kind.

Question 6

Designate the organs

Answer

There are different bodies to designate with the GmbH:

The most important body is the shareholders’ meeting. This appoints the management and approves the annual report. Its role also includes determining how the company’s profits or losses are used.
The management: This role can be taken by the founder himself or by a third party.
The audit body: If an employer employs more than 10 full-time employees on average per year, they must have their accounting checked by a certified auditor. As an independent body, the auditor verifies the annual accuracy of the accounts and is responsible for it. It also prepares a report, which will be submitted to the shareholders’ meeting.

It is mandatory to designate these bodies. In addition, it is also essential for your company to function properly. So it’s worth taking the time to organise yourself properly in relation to these issues.

Question 7

Organise the founding meeting

Answer

When setting up your GmbH, you must organise the founding meeting and then hold a meeting at least once a year. At these meetings, it is possible to amend the articles of association and to appoint or discharge the managing directors. In addition, the meeting also approves the annual financial statements and grants the discharge to the managing directors.

Question 8

Enter in the commercial register

Answer

After the public certification of the certificate of incorporation through a notary, it is necessary to have your company registered in the commercial register. After this registration, you will be assigned a company identification number (UID) from the Swiss Commercial Register.

Question 9

Register with the compensation fund (AHV, IV, EO)

Answer

It is mandatory to register all employees working in the GmbH with the compensation fund and to conclude contracts for the BVG and UVG with them. If you set up a GmbH, you are better protected than the self-employed. Because managers with a regular income are considered employees: they can therefore benefit from a normal company pension plan for employees. Because a GmbH has the status of an independent legal entity, it can be recognised very easily by Suva or the AHV in contrast to a sole proprietorship. That’s why it’s a great advantage to set up a corporation – think about it.

Question 10

Value Added Tax (VAT)

Answer

You are required to clarify your VAT liability. There are different approaches which depend on your business activity. No VAT obligation applies as long as your company has turnover in Switzerland lower than CHF 100,000 per year. If, on the other hand, you are subject to VAT, it is necessary to register with the Federal Tax Administration. Information can be found on their website.

Setting up a limited liability company (LLC): the complete checklist

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Advantages of a LLC

Disadvantages of a LLC

Checklist for setting up a LLC