Selling, passing on or closing your business

Passing on rather than closing

A business that is running has value: a client base, a name, contracts, sometimes employees. Before closing, the question is worth asking: who could take it over?

• A Sàrl or an SA is passed on by selling its capital shares or its shares. The company carries on, with its contracts and its debts; only the owner changes.
• A sole proprietorship cannot be sold as such: you transfer your activity, assets and contracts to a buyer. If the buyer also takes over the debts, you remain jointly liable for three years (art. 181 CO).
• The successor may be a family member, an employee, a competitor or an investor. A handover is ideally prepared several years in advance.

Closing a sole proprietorship: a series of notifications

With no legal personality of its own, a sole proprietorship is closed through a series of notifications:

• Commercial register: request deletion, if the business is registered.
• AVS compensation office: report the end of your self-employed activity. If you stop working altogether before retirement age, you must keep contributing as a non-employed person.
• VAT: if you were registered, report the end of your VAT liability and file the final return. Assets you keep for yourself may be taxed at that point.
• Employees, lease, insurance, subscriptions: terminate them, respecting each contract's notice period.

The profit made on closing (sale of equipment, of the client base, accumulated reserves) is taxed. If you stop for good after age 55, or because of disability, it is taxed separately and at a reduced rate (art. 37b DBG/LIFD). Closing at 54 or at 55 can therefore change the bill: talk to a fiduciary before setting the date.

The official form is in French; the fields below fill it in for you.

Liquidating a Sàrl or an SA: three months at least, often a year

A company is not closed, it is liquidated. In order:

• Dissolution is decided by the partners' or shareholders' meeting, then entered in the commercial register. The company carries on, under its name followed by the words “en liquidation” (in liquidation).
• A liquidator, often the manager or the director, completes current business, collects receivables, sells the assets and pays the debts.
• A call to creditors is published in the Swiss Official Gazette of Commerce (SOGC/FOSC). Since 2023, a single publication is enough.
• The balance is distributed among the partners or shareholders, but not before one year after that call. The period drops to three months if a licensed audit expert certifies that all debts have been paid.
• Deletion is then requested from the commercial register. This is the legal end of the company.

The deletion letter, for a sole proprietorship as for a liquidated company, is prepared with the form in the previous section.

An over-indebted company cannot be liquidated this way: its debts exceed what it owns, and the law then requires notifying the court. That is the bankruptcy route.

After deletion: ten years of records

Accounting books and supporting documents must be kept for ten years, even once the business has been deleted from the register. For a liquidated company, the liquidators designate the safe place where they are kept. A tax audit or a question from a former client can still come up.