The Société à Responsabilité Limitée (Sàrl) is a popular legal structure for small and medium-sized enterprises (SMEs) in Switzerland. This form of business offers flexibility and is well-suited to the needs of entrepreneurs, with liability limited to the contributions made by its members. This article provides a detailed look at the characteristics, benefits, and obligations associated with a Sàrl under Swiss law, as well as the key steps for creating and managing such a company in Switzerland.
Characteristics of a Sàrl under Swiss law
Legal personality
A Sàrl is a separate legal entity from its members, giving it its own legal personality. This allows the company to acquire rights and obligations, own property, and engage in legal proceedings.
Share capital
The minimum share capital for a Sàrl in Switzerland is CHF 20,000, which must be fully paid up at the time of the company’s formation. The share capital is divided into shares with a nominal value of at least CHF 100. Contributions in kind are also permitted, provided they are appraised by a licensed auditor and specified in the company’s articles of association.
Members
A Sàrl can be established by one or more individuals or legal entities, whether Swiss or foreign. Members are only liable for the company’s debts up to the amount of their contributions, thereby limiting their personal liability.
Management body
The management of a Sàrl is carried out by one or more managers, who may be members or third parties. These managers are registered in the Commercial Register and have the authority to represent the company in dealings with third parties.
Benefits of a Sàrl under Swiss law
Limited liability
One of the main advantages of a Sàrl is the limitation of members’ liability to their contributions. In cases of bankruptcy or debt, members’ personal assets are protected, as long as they have not acted fraudulently or negligently.
Flexibility
A Sàrl offers significant flexibility in terms of governance and decision-making. The articles of association can include specific rules regarding profit distribution, the transfer of shares, or the powers of managers, allowing the company to be tailored to the members’ needs.
Credibility
A Sàrl is often seen as a more serious and professional structure compared to a sole proprietorship, which can facilitate access to credit and business partners.
Obligations of a Sàrl under Swiss law
Accounting
Sàrls are required to maintain accounting records in compliance with Swiss standards, including a balance sheet, income statement, and notes. These records must be kept for 10 years following the end of the financial year. Sàrls must also have their accounts audited by a licensed auditor if they exceed certain thresholds in terms of revenue, balance sheet total, or workforce.
General meeting
An annual general meeting of members must be held to approve the accounts, appoint managers, and make other important decisions. The articles of association may stipulate additional rules regarding notices, quorums, and majorities.
Commercial register
A Sàrl must be registered in the Swiss Commercial Register, which makes certain information public, such as the company name, registered office address, share capital, managers, and members. Subsequent changes, such as the transfer of shares or changes in management, must also be declared to the Commercial Register.
Creating a Sàrl under Swiss law
Drafting the articles of association
The articles of association set out the company’s governance and operational rules. They must be written and signed by all members.
Capital contribution
Members must contribute the minimum share capital of CHF 20,000, either in cash or in kind. Contributions in kind must be appraised by a licensed auditor.
Registration with the commercial register
After the articles of association are signed and the capital is contributed, the Sàrl must be registered with the Commercial Register. This process is typically handled by a notary, who ensures that the articles of association comply with legal requirements and that the company’s formation is lawful.
Managing a Sàrl under Swiss law
Accounting and taxation
A Sàrl must keep accounting records and file tax returns with both cantonal and federal authorities. It is subject to corporate income tax and capital tax, as well as VAT if its annual turnover exceeds CHF 100,000.
Employee relations
If a Sàrl employs staff, it must comply with Swiss labor laws, including minimum wage requirements, paid leave, working hours, and termination conditions. The company must also contribute to social security schemes for its employees and adhere to health and safety regulations.
Transfer of shares
The transfer of shares in a Sàrl is subject to certain conditions, such as the approval of other members or registration in the Commercial Register. The articles of association may include specific clauses to facilitate or restrict the transfer of shares.
A Sàrl is an attractive legal structure for entrepreneurs in Switzerland due to its flexibility, limited liability, and credibility. However, it also involves certain obligations, particularly in terms of accounting, taxation, and governance. Before setting up a Sàrl, it is essential to fully understand its characteristics and legal implications and to seek advice from a lawyer or notary specialized in Swiss law for personalized guidance. Once the Sàrl is established, diligent management and a good understanding of legal obligations will ensure the company’s success and longevity.
