A limited liability company (SARL) (Art. 772–827 CO) is a combination of a public limited company and a partnership. It is one of the most common legal forms in Switzerland.
A SARL is a commercial company with its own legal personality and a low start-up capital, which is particularly suited to SMEs and family-owned firms. It is a mixture of a public limited company and a partnership. There are over 207'000 SARL entities in Switzerland.
A SARL is established at the time of its entry in the Commercial Register. As in the case of a public limited company, the authentication of its establishment must be notarized. The founders of the firm must declare its establishment by means of an official deed, draw up its articles of association, convene the shareholders’ meeting and appoint an auditor.
Each shareholder holds at least one share in the share capital. A written agreement drawn up between the parties concerned is sufficient in order to transfer shares. An official deed is no longer required.
A minimum share capital of CHF 20,000 (Art. 773 CO) must be contributed in the form of either cash contributions or contributions in kind. The joint and several liability of the shareholders ceases to apply once the share capital is fully paid up. Contrary to the provisions of the previous law governing SARLs, there is no longer an upper limit for the share capital. The minimum contribution per shareholder, in cash or in kind, amounts to CHF 100 (Art. 774 CO); there are no longer any restrictions governing the number of shares per shareholder. The owners of the shares must be entered in the Commercial Register by name.
The term “limited liability” may cause some confusion, as the company is fully liable for its debts. Given that the share capital must be fully paid up, the personal liability of each shareholder is not invoked unless an obligation to make an additional payment or provide an ancillary service has been written into the articles of association.
This obligation is intended only to cover balance sheet losses, to allow for the continuation of the firm's business or for cases defined in the articles of association. The total amount of additional payments must not exceed twice the nominal value of the share owned by a particular shareholder (Art. 795 CO).
Preconditions for establishment of the company
One or more natural persons and/or legal entities are required for the establishment of a SARL. As in the case of a public limited company, a SARL may be founded and operated by a single individual.
The choice of corporate name is unrestricted but the addition of “SARL” is compulsory (in full or in its abbreviated form). In addition, the business name must differ significantly from any other business name already registered in Switzerland.
As in the case of a public limited company, a SARL must call upon the services of a state-approved auditor. The auditor checks the accuracy of the accounts each year and draws up a report for the shareholders’ meeting. SARLs are obliged to keep proper accounts and present the latter in accordance with the rules set forth in the Swiss Code of Obligations (Art. 957 et seq. CO).
Start-up costs and taxes
The start-up costs for a SARL are slightly lower than those for a public limited company, but they are higher than those of a partnership.
The establishment of a SARL requires an equity contribution of at least CHF 20,000. In addition to this basic capital, consultancy fees concerning start-up methods amounting to between CHF 600 and CHF 2,000, notarial fees relating to memoranda of association of between CHF 700 and CHF 2,000 as well as fees for registration in the Commercial Register of CHF 600 (provided that the share capital does not exceed CHF 200,000) also apply. Moreover, the founder must pay a tax referred to as “stamp duty” amounting to 1% of the share capital if the latter exceeds CHF 1,000,000.
Further information can be obtained from: