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LIMITED LIABILITY COMPANY

A limited liability company (Sàrl in French, GmbH in German) is a distinct legal entity in which one or more persons or companies come together in a new firm with predetermined nominal capital. Each member takes equity in the company by contributing to its capital, and the company‘s liability is limited to the amount of the registered capital. The Sàrl (GmbH), in contrast to the SA (AG), needs no audit revision. However, the Sàrl (GmbH) does not have shares, but the so-called social quotas, the holders of which are enrolled in the Registry of Commerce. In this sense the Sàrl (GmbH) does not guarantee the anonymity of its holders.

The formation of a limited liability company is somewhat simpler than a corporation. However, the procedure is largely similar to that of setting up a joint stock company. The nominal capital must be at least 20’000.- CHF. There are no limitations on foreign owners,  but a Sàrl must provide at least one partner (does not have to be a Swiss citizen) with residence in Switzerland. This partner should be registered as the managing director in the Trade Register.

Advantages of the Sàrl as a legal form are:

• Limitation of liability to the company‘s assets
• Simple inheritance arrangements
• Lower capital requirement
• Only one founder is required
• No annual audit revision required

Disadvantage of the Sàrl as a legal form is :

• All owners are filed publicly with their full name and nationality.