Creation of a Sole Proprietorship in Switzerland

A sole proprietorship, also known as a sole proprietorship, is a business operation without its own legal personality. The owner of a sole proprietorship acts in his/her own name and personally bears the risk of liability.

• Suitable for one-person businesses such as flower, jewelry or hairdressing businesses as well as for artists
• No minimum capital required
• Owner must have a domicile in Switzerland (no residence requirement)
• Unlimited liability with personal assets

How much does it cost to incorporate an sole proprietorship, and how long does it take for the sole proprietorship to be registered?

The cost of incorporating a sole proprietorship often costs up to CHF 1'000. With IFJ, the legally and notarially executed incorporation costs a maximum of CHF 200. If you open the business account with the banking partner PostFinance, the incorporation costs only CHF 100.

Not to forget: Thanks to further well-known partners, you receive additional startup deals that completely cover your incorporation costs and support the start of your company.

These additional third-party costs apply to every sole proprietorship formation:

• Commercial registry office CHF 150 - 250
• Signature certification CHF 20 - 50

How long does it take to incorporate a sole proprietorship in Switzerland?

On average, the incorporation of a sole proprietorshiptakes 2 - 4 weeks. Depending on the canton and the workload of the offices, this can vary.

How is a sole proprietorshipformed?

The Company Name of a sole proprietorship?

• Plasterer Meier
• Carpentry Peter Keller
• Cosmetic Lena Zuber

Any company name may be a fanciful name, contain details that serve to describe the persons mentioned therein or indicate the nature of the company. The company name must correspond to the truth and must not cause any deception (prohibition of deception) or contradict any public interests.

How do I register my sole proprietorshipin the commercial register?

What insurance is needed for a sole proprietorship?

Your sole proprietorship must be registered with the compensation office (social insurance) if your earned income exceeds CHF 2'300. You will normally receive a registration form from your responsible SVA. In addition to AHV, IV and EO, ALV, pension fund and accident insurance are also compulsory.

Further insurances are of central importance for sole proprietorships. It's important that the different needs are analyzed and tailored solutions are created. An overview of what insurances might be necessary for your new company can be found at www.ifj.ch/durchstarten/versicherungen.

Experts from Helvetia are available for personal consultation.

Who is liable in a sole proprietorship?

The owner is personally liable without limit with their private assets.

Accounting in a sole proprietorship

A sole proprietorship whose turnover is less than CHF 500'000 must keep at least one set of accounts that only include income, expenditure and assets.

A sole proprietorship that generated sales of at least CHF 500'000 in the last financial year is obliged to keep books and accounts in accordance with the rules defined in the Swiss Code of Obligations (OR 957).

Taxation of sole proprietorships in Switzerland

Owners of a sole proprietorship are liable to pay tax on their entire income and assets from business and private activities.

A sole proprietorship cannot be passed on as such and generally ends with the exit or withdrawal of the entrepreneur. The new person who succeeds then establishes a new sole proprietorship. In material terms, all or part of the business operations are sold by transferring the assets and liabilities.

The dissolution of a sole proprietorship takes place in several steps and can be easily initiated online through the digital legal service of IFJ.

Advantages:

• All that is required is an entry in the commercial register. This is mandatory if the business is run in a commercial manner and the annual turnover exceeds CHF 100'000.
• It is not necessary to pay in a fixed share capital.
• The shareholders can take on the role of directors themselves.
• Economic double taxation of profits can be avoided.

Disadvantages:

• The personal liability of the business owner is unlimited.
• The ownership shares are more difficult to transfer than with a corporation.
• Partnerships, including sole proprietorships, have more difficult access to the capital market.
• The protection of the company name is limited in terms of territory.
• Anonymity is not possible due to the necessary entry by name in the commercial register.

Choosing to start a sole proprietorship means opting for a business structure where one person is solely responsible for management and financial obligations. This legal form is ideal for individual entrepreneurs and freelancers who desire full control over their business activities and wish to directly benefit from profits and decisions. With our assistance in establishing your sole proprietorship, you can rely on professional guidance to help turn your entrepreneurial goals into reality.

Our online service for founding your sole proprietorship is designed to make your journey into self-employment easier. Through our secure digital platform, you can easily establish your sole proprietorship online, without complex administrative barriers or the need to travel. You retain full control over the process and can rest assured that each step complies with legal requirements.

Switzerland, particularly the cities of Zurich, Basel, Bern, Geneva and Lugano offers an attractive economic environment for setting up your general partnership and positions you advantageously in dynamic and diverse markets. We help you navigate the local business landscape and ensure that your general partnership in Switzerland takes full advantage of all available opportunities. Our in-depth knowledge of local specifics enriches your project and turns the establishment of your general partnership in Aargau, Thurgau, Fribourg, Valais or Lucerne into a lasting success.

In addition to setting up sole proprietorships, we offer a wide range of complementary services covering all necessary aspects for the development and management of your business. Whether it's tax consulting, risk management strategies, or accounting services, our team is equipped to provide comprehensive support. Establishing your sole proprietorship with our help is not just about getting started; we are committed to providing continuous support to ensure the long-term success and growth of your business.