What impact does a company’s legal form have?

No matter whether a sole-trader, general partnership, LLC or PLC, choosing the right legal form is one of the most important decisions to be made when establishing a company. Your company’s legal form will dictate a number of things, for example capital requirements, accounting obligations, liability, taxes and insurance. 

Most new company founders opt to become a sole-trader, public limited company (PLC) or limited liability company (LLC).

  • Setting up as a sole-trader is straightforward and does not require a minimum investment. If the company goes bankrupt, the owner is liable with their own private assets.
  • A public limited company (AG) allows owners to exclude personal liability. This legal form also has a good reputation with the general public. 
  • The LLC (GmbH) has become the most popular legal form for companies in Switzerland. As is the case for PLCs, shareholders are not personally liable in the event of bankruptcy.

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