Set Up Limited Liability Company (GmbH)

It is not a surprise that with a limited liability company (GmbH) the owners only undertake limited liability (share capital, not their assets).

A limited liability company, LLC (GmbH) is a company that has a juridical person established by more than one individual or companies with a specific capital (nominal capital). Every associate takes part by compensating a starting share of the money. The responsibility of the associate is restricted to particular symbolic capital.

By comparison to the Swiss “Aktiengesellschaft (AG)” that demands a sum of CHF 100,000, such that more than half of it is compensated to establish it, the owners are to supervise and act on behalf of the company. The person-oriented essence of the GmbH is also demonstrated in the necessary registration of the stockholders in the commercial register.
The GmbH may be characterized as a trading company with an individual corporate body in which one or more real or legal persons take part. It is responsible for its commitments to the scope of the company assets. Every company member takes part in the nominal capital by making at least one capital subsidy. The sections of association may require responsibilities to make further financial and material contributions. The applicable rules may be obtained in art. 772 – 827 of the Swiss Code of Obligations.

The main features of the GmbH are follows:

The key characteristic of the GmbH:

  • A minimum of one founder is mandatory. They can be citizens or non-citizens of Switzerland. Also, they can be either a person or corporate bodies.
  • The money which is registered is distributed into shares and should be equal to at least CHF 20K. Payment in cash is mandatory; otherwise, it will be compensated by grants in sort.
  • Responsibility is restricted to the capital of the company.
  • Forming GmbH requires the official, notarial process to be formed. The GmbH gets its corporate body after it completes registration in the commercial register. 
  • The legal entities of the GmbH are meeting of the shareholders as the senior administrative board, the management board as the operational body and the treasurer, in case there is one, as the account-monitoring organ.
  • Every executive director has the right to act on behalf of the company, except if the articles of association specify differently. More than one executive director can act on behalf of the company. What is more, the minimum one resident of Switzerland has to act on behalf of the company.
  • Typically, you can choose any name for your company. The only requirement is that the term “GmbH” should be included in the title.
  • It is necessary for GmbH to hold accounts of the company. Double entry accounting with balance records, an operational or gains, and losses account and an inventory is essential.
  • A regular review is necessary for a public corporation (mainly if it is recorded in the Stock Exchange) and for a corporation that surpasses two of the following limits in two consecutive fiscal years: total balance sheet of CHF 20M, sales of CHF 40M, and an average of 250 core working stuff over the year.
  • Small and medium-sized companies that do not surpass the limits as mentioned above are put through restricted scrutiny (inspection). Those companies that have less than 10 core working stuff over the year are able to opt out the restricted investigation (investigation) totally in case all shareholders approve this process.

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