Setting up a limited liability company is subject to certain rules

Setting up a limited liability company is subject to certain rules

"Two friends and I would like to set up a limited company. However, I have no idea how this works. Can you shed some light on this for me?"

Jean, Bernex

A limited liability company is a personal capital company formed by one or more natural persons or commercial companies. The share capital is set by the Articles of Association and may not be less than CHF 20,000. The company's debts are guaranteed by the company's assets and not by the partners' personal wealth, which is one of the special features of this type of company, unlike, for example, a general partnership.

Under the Swiss Code of Obligations, a company is formed by a deed in which the founders declare that they are creating a limited liability company, draw up the Articles of Association and appoint the governing bodies.

The first stage therefore involves finalising the company's articles of association, the contracts between the founders, and the preparatory acts for paying up the share capital. This phase consists essentially of discussions and negotiations on the essential points, particularly the Articles of Association, which must be dated and signed by all the founders. Unanimous agreement is therefore required.

The second step is to register the company with a notary. This is known as the incorporation meeting, at which the deed of incorporation of the company is signed by all the founders. This deed can be drawn up by any notary in Switzerland, not necessarily the one where the company has its registered office. If any of you are unable to attend, you may be represented by a duly authenticated written power of attorney. At this meeting, the founders clearly and unanimously declare their intention to set up a limited liability company, draw up the definitive text of the Articles of Association and appoint the company's governing bodies. The prior agreement of the persons designated is required here. The subscription of shares is also carried out, which is an individual act for each founder, unlike the others. The partners must pay a contribution corresponding to the issue price of their shares. Each partner's share in the company's capital determines the extent of his rights and obligations.

Finally, to complete the formation of the limited liability company, it must be entered in the Commercial Register. It is only at this point that the company acquires legal personality.

For further details that cannot be covered in these columns, it would be wise to consult a notary; if you do not know one, the Chamber of Notaries (tel: 022/310.72.70) will be able to guide you.