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.