Jurisdiction for an engineering firm

When several persons establish a company, it is necessary to draw up a shareholders’ agreement to prevent disputes from arising.

Who creates what?

With three work colleagues, a Swiss citizen started an engineering firm.

Business area/target group

Specialization in construction planning. Project and construction management as a service for general contractors, architects and institutional contracting authorities.

Selected legal structure/financing

The entrepreneurs started a limited company (SA) with a share capital of CHF 400,000, paid in full by the four parties. The four entrepreneurs privately funded the start-up phase.

Thus far, no external/foreign funds have been invested.

The business contractor must be sure to take the following into consideration:

Legal structure

With his or her three colleagues, the entrepreneur founded a limited company.  Since several parties are involved in the business, clear terms and conditions must be established through a shareholder agreement.

This type of contract governs the relationships between the shareholders outside the bylaws and is therefore not required by law. There are no "agreement templates" because the terms and conditions vary from one company to another.

But the shareholder agreement should, nevertheless, contain the following:

  • Right of purchase, purchase option, purchase obligation, etc.
  • Right of recovery
  • Type of agreement (e.g. headcount vs. per share)
  • Agreement on the composition of the board of directors
  • Veto rights, clause for asset position
  • Replacement

Value-added tax

Small business owners generally expect annual revenue of CHF 500,000.

Consequently, this limited company must be registered with the Swiss Federal Tax Administration (FTA) within 30 days after the start of the tax period (Art. 66, LTVA - Federal Act on Value-Added Tax). 

Taxes

When the limited company is established, it is generally necessary to pay the stamp duty (issue fee) if capital stock exceeds CHF 1 million (tax-free amount) (Art. 6, LT - stamp duty law). The four small business owners create CHF 400,000 in equity. Consequently, they will not pay stamp duty.

Import/export

The company received an order from abroad to conduct a feasibility study. Since this order is for the export of services and not goods, it is not subject to the provisions on exports.


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Do you want to start a small business/engineering firm?
If so, follow the “Nine steps to setting up your own business.”

Last modification 03.07.2018

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