Ltd. vs. LLC. in Switzerland: The Key Differences
In the context of Swiss commercial law, the Limited Company (Ltd.) and Limited liability company (LLC.) represent two predominant corporate forms. This article explores the key distinctions between them, offering an overview of their characteristics, requirements, and legal and tax implications. A thorough understanding of these differences is essential for those wishing to engage in business activities in Switzerland, as they determine the structure, shareholder liability and regulatory obligations of the two corporate forms. Be prepared to explore which one best suits your business needs and how this choice can affect the success of your business activities.
Limited Company (Ltd.)
The Limited Company (Ltd.) is one of the most prestigious and common legal forms in Switzerland. By starting a Limited Company you can deliver the most solid and reliable image. Ltds are the right choice for those who think big and want to integrate shareholders while maintaining their anonymity. Here are some of its main features:
Minimum Share Capital: An Ltd. requires a minimum share capital of at least 100’000 Swiss francs. At least 50’000 francs of the capital must be paid in (or 20% of the total capital) at the moment of the incorporation.
Shareholders: Shares can be tradable and listed on the stock exchange, making this legal form suitable also for large enterprises. The anonymity of shareholders is guaranteed. Shareholders can be either natural persons or legal entities.
Administration: Ltds are required to appoint a board of directors and an external auditor. Administration is separate from share owners, which provides greater protection for investors.
Limited Liability: Shareholders of an Ltd. are not personally liable for the debts of the company, but only up to the amount of their investments.
Limited Liability Company (LLC)
The Limited Liability Company (LLC) is a more flexible legal form suitable for smaller businesses. Limited Liability Company is a flexible solution that limits liability to each partner’s invested capital share. One of the main benefits of limited liability companies (LLC) compared to limited companies (Ltd) is that entrepreneurs can invest less capital while still being able to integrate partners and limit their personal risks.
Here are some of its main features:
Minimum Share Capital: The LLC requires a minimum share capital of CHF 20'000, which must be fully paid in at the moment of the incorporation.
Partners: The partners of an LLC are visible and therefore registered in the commercial register of the canton in which the company is located. Partners may be natural persons or legal entities.
Administration: LLC are required to appoint a management and possibly an external auditor. The administration of the company is separate from the owners of the shares, which offers greater protection to investors.
Limited Liability: Shareholders of a LLC. are not personally liable for the debts of the company, but only up to the amount of their investments.
Conclusions
The choice between an Ltd. and a LLC. will depend on your specific needs and the size of your business. Ltds are best suited for large businesses with significant capital and a large number of shareholders, while LLCs are ideal for smaller businesses with fewer owners and a simpler decision-making structure. Whether it is an Ltd. or an LLC., the important thing is to make an informed and strategic decision, based on the specific business circumstances and objectives, to ensure long-term success and sustainability.
More information on the two legal forms can be found in the following articles:
𝘛𝘩𝘪𝘴 𝘣𝘭𝘰𝘨 𝘢𝘳𝘵𝘪𝘤𝘭𝘦 𝘥𝘰𝘦𝘴 𝘯𝘰𝘵 𝘤𝘰𝘯𝘴𝘵𝘪𝘵𝘶𝘵𝘦 𝘭𝘦𝘨𝘢𝘭 𝘢𝘥𝘷𝘪𝘤𝘦, 𝘪𝘵 𝘪𝘴 𝘱𝘳𝘰𝘷𝘪𝘥𝘦𝘥 "𝘢𝘴 𝘪𝘴" 𝘢𝘯𝘥 𝘮𝘢𝘬𝘦𝘴 𝘯𝘰 𝘤𝘭𝘢𝘪𝘮 𝘵𝘰 𝘤𝘰𝘮𝘱𝘭𝘦𝘵𝘦𝘯𝘦𝘴𝘴 𝘰𝘳 𝘢𝘤𝘤𝘶𝘳𝘢𝘤𝘺. 𝘛𝘩𝘦𝘳𝘦 𝘪𝘴 𝘯𝘰 𝘸𝘢𝘳𝘳𝘢𝘯𝘵𝘺 𝘰𝘳 𝘭𝘪𝘢𝘣𝘪𝘭𝘪𝘵𝘺 𝘰𝘯 𝘵𝘩𝘦 𝘱𝘢𝘳𝘵 𝘰𝘧 𝘏𝘰𝘰𝘱 𝘸𝘪𝘵𝘩 𝘳𝘦𝘨𝘢𝘳𝘥 𝘵𝘰 𝘪𝘵𝘴 𝘤𝘰𝘯𝘵𝘦𝘯𝘵. 𝘐𝘵 𝘪𝘴 𝘦𝘹𝘤𝘭𝘶𝘥𝘦𝘥 𝘵𝘰 𝘵𝘩𝘦 𝘦𝘹𝘵𝘦𝘯𝘵 𝘱𝘦𝘳𝘮𝘪𝘵𝘵𝘦𝘥 𝘣𝘺 𝘭𝘢𝘸. 𝘜𝘴𝘦 𝘪𝘴 𝘢𝘵 𝘺𝘰𝘶𝘳 𝘰𝘸𝘯 𝘳𝘪𝘴𝘬. 𝘐𝘧 𝘯𝘦𝘤𝘦𝘴𝘴𝘢𝘳𝘺, 𝘭𝘦𝘨𝘢𝘭 𝘢𝘥𝘷𝘪𝘤𝘦 𝘴𝘩𝘰𝘶𝘭𝘥 𝘣𝘦 𝘴𝘰𝘶𝘨𝘩𝘵.
