Sole proprietorship, Sàrl, SA: which one to choose

The four forms, side by side

What you really risk

This is the one criterion that cannot be undone. As a sole proprietor or in a general partnership, you answer for the business's debts with your private assets, your savings, your vehicle, possibly your home. In an Sàrl or an SA, you in principle lose only what you contributed.

In a general partnership, liability is also joint: a creditor may claim the whole amount from one partner, who then has to turn against the others.

Limited liability is not an absolute shield. A member of an Sàrl who takes part in management may see their private assets engaged in case of gross negligence, and unpaid social contributions are a classic source of personal liability for managers.

What becomes public

The commercial register can be consulted by anyone, free of charge, on Zefix. The difference between forms is not trivial if discretion matters to you.

• Sole proprietorship, Your family name must appear in the business name
• General partnership (SNC), The partners appear in the register
• Sàrl (LLC), All members are entered in the register
• SA (Ltd), Only the board of directors is registered; shareholders remain anonymous

When registration becomes mandatory

An Sàrl and an SA are born from their registration: without the register, they do not exist. A general partnership must be registered in all cases.

The sole proprietorship is the only case where registration remains optional, up to CHF 100,000 of annual turnover, or until the activity is run in a commercial manner. Beyond that, it becomes mandatory.

The other forms, one line each

Four forms cover almost every new business. The six others exist, and the questionnaire lets you choose them, but nobody picks them by accident.

• Limited partnership, at least one partner with unlimited liability (the general partner) and at least one liable up to their contribution (the limited partner). No minimum capital, no notary.
• Partnership limited by shares, the same logic with capital divided into shares; notarial deed required. Rare.
• Cooperative, at least seven members to found it, one vote per head; notarial deed required. The form of collective projects and mutual-aid structures.
• Association, no notary; must register as soon as it runs a commercial activity. Not a form for carrying a trade for profit.
• Foundation, assets dedicated to a purpose, without members; notarial deed required, except family and ecclesiastical foundations. Supervised by the authority.
• Branch, not a company but the establishment of an existing Swiss or foreign company; registered where it is located, without a notary.

Two things people often forget

Your self-employed status is not decreed. It is recognised, or refused, by the AVS compensation office, on the basis of facts: several clients, your own premises and tools, the fact that you bear the economic risk. A refusal reclassifies you as an employee of your clients, with the corresponding contributions.

The form can be changed. Starting as a sole proprietor and later converting to an Sàrl is an ordinary path, and the new company's capital can be formed by contributing the existing business. Choosing today locks nobody in.