What is the commercial register entry for a sole proprietorship?
The commercial register entry makes your sole proprietorship officially visible. The commercial register is a state-run registry that discloses legally relevant information about companies. It serves legal certainty and the protection of third parties (Art. 927 Abs. 1 OR).
The following information in particular is registered for a sole proprietorship:
the company name, i.e., the business name
the business identification number, if available
headquarters and legal domicile
legal form
purpose of the company
the owner
persons who are authorized to represent the company
This information is determined for sole proprietorships from Art. 38 HRegV.
Important to note: A sole proprietorship does not only come into existence through the commercial register entry. In principle, you can already run a sole proprietorship as soon as you are self-employed and active with an orientation toward long-term income. Therefore, for a sole proprietorship, the entry is not the "birth" of the company, but rather makes it legally visible to the outside world. Accordingly, the Federal Supreme Court states that a sole proprietorship can exist even before being registered in the commercial register (BGer 4A_23/2014 E. 2.1.1).
When is the commercial register entry for a sole proprietorship mandatory?
The commercial register entry for a sole proprietorship is mandatory if a natural person runs a business and this business has generated a turnover of at least CHF 100,000 in the last financial year (Art. 931 Abs. 1 OR).
A business is an independent economic activity aimed at long-term income (Art. 2 lit. a HRegV). Therefore, it is not about one-off occasional transactions, but about an activity that is geared toward repeated revenues.
In practice, this means:
You are self-employed.
Your activity is aimed at earning an income.
You do not conduct the activity just once or on a purely occasional basis.
Your turnover reached at least CHF 100,000 in the last financial year.
If these requirements are met, you must have your sole proprietorship registered in the commercial register at the place of establishment (Art. 931 Abs. 1 OR). The place of establishment does not necessarily have to be your private residence. What matters is where you actually practice your economic activity and where your business presents itself to the outside world.
What applies to liberal professions and agriculture?
An important exception applies to liberal professions and agriculture. Members of liberal professions and farmers only have to register despite a CHF 100,000 turnover if they run a business conducted in a commercial manner (Art. 931 Abs. 1 OR).
Liberal professions include, for example, doctors, dentists, architects, engineers, lawyers, or notaries. In such activities, the personal relationship with the customer, patient, or client is often paramount.
However, this changes if the operation is organized in a highly entrepreneurial manner. The Federal Supreme Court assesses on a case-by-case basis whether the pursuit of economic efficiency comes to the fore compared to the personal relationship. Indications of this can be, for example, a larger organization, several employees, planned advertising, high turnovers, special financing issues, or a structure that is strongly oriented toward profitability (BGer 4A_526/2008 E. 4.2).
An example: A small personal consulting practice can be assessed differently than a large practice with numerous employees, long opening hours, heavy marketing, and significant organizational effort. Therefore, turnover alone is not always the whole answer for liberal professions and agriculture.
Am I allowed to register my sole proprietorship voluntarily?
Yes. Sole proprietorships that are not obliged to register may register in the commercial register voluntarily (Art. 931 Abs. 3 OR).
This is particularly relevant if your turnover is still below CHF 100,000 but you want to present yourself more professionally. A voluntary commercial register entry for a sole proprietorship can make sense if you work with business clients, want to build trust, or want your company name to be protected.
However, the voluntary entry is not just a marketing step. It also brings legal consequences. Therefore, before registering, you should know not only the benefits but also the obligations.
What are the advantages of a commercial register entry for a sole proprietorship?
The commercial register entry brings above all visibility, trust, and a certain protection of the company name.
More trust in business transactions
A commercial register entry shows business partners, banks, suppliers, and customers that your sole proprietorship is officially registered. Third parties can look up who is behind the company, where its headquarters are located, and who is authorized to represent it.
This is particularly helpful in B2B business. Many business partners want to know who they are dealing with legally. The commercial register creates transparency here because it discloses legally relevant facts and thus serves legal certainty (Art. 927 Abs. 1 OR).
Protection of the company name locally
Another advantage is the protection of your company. The registered and published company name is basically for the exclusive use of the authorized person (Art. 956 Abs. 1 OR).
For sole proprietorships, this protection is geographically limited. A sole proprietorship registered in the commercial register may not be used by any other business owner in the same location (Art. 946 Abs. 1 OR). Claims arising from unfair competition are reserved with respect to sole proprietorships in another location (Art. 946 Abs. 3 OR).
Professional appearance towards banks and authorities
A registered sole proprietorship often appears more professional in business transactions. For banks, landlords, suppliers, or larger clients, the extract from the commercial register is a simple document to verify the existence, headquarters, and representation of the sole proprietorship.
Legally, it is particularly important that the entry creates clarity. The HRegV stipulates that for a sole proprietorship, among other things, the company name, headquarters, purpose, owner, and authorized representatives must be registered (Art. 38 HRegV).
Clearer separation in external presentation
A sole proprietorship is not a separate legal entity like an LLC or stock corporation. Legally, you remain directly responsible as the owner. Nevertheless, the commercial register entry helps in everyday life to structure your business appearance more clearly.
Customers and business partners see what company name you operate under. Contracts, offers, and invoices can be processed consistently under this name. This does not replace a limitation of liability, but it creates more order in business transactions.
What duties and disadvantages does the registration bring with it?
The commercial register entry of a sole proprietorship does not only have advantages. It also brings costs, formal obligations, and debt collection consequences.
Fees and change notifications
Anyone who prompts a decision or service from a commercial register authority must generally pay a fee (Art. 1 Abs. 1 GebV-HReg). This also applies to registrations and subsequent changes.
If registered facts change, such as address, purpose, or authorized representatives, this information must be updated. This involves administrative effort and can trigger additional fees.
Bankruptcy proceedings instead of debt collection by seizure
A particularly important consequence concerns debt collection law. Anyone registered in the commercial register as the owner of a sole proprietorship is subject to debt collection through bankruptcy (Art. 39 Abs. 1 Ziff. 1 SchKG).
The Federal Supreme Court emphasizes that the formal commercial register entry is decisive for this. Anyone who remains registered remains, in principle, subject to bankruptcy proceedings, even if the business activity has already ended (BGer 4A_23/2014 E. 2.1.1).
This is not a minor detail. In bankruptcy proceedings, a single asset is not simply seized. Rather, in principle, the entire seizable asset base is included in bankruptcy proceedings. For a sole proprietorship, this is highly relevant because there is no separation between business assets and private assets as there is with a corporation.
No limitation of liability
The commercial register entry does not change the fact that you as the owner of a sole proprietorship are personally liable. A sole proprietorship is not a separate legal entity. Debts from business activities can therefore affect your private assets.
The entry makes your business more visible and professional, but it does not protect your private assets. If limitation of liability is a key issue, you should check whether an LLC or stock corporation is a better fit.
Accounting obligations remain dependent on turnover
Many founders believe that the commercial register entry automatically leads to full double-entry bookkeeping. This is not true across the board.
Sole proprietorships must keep comprehensive accounts and financial reporting if they have achieved at least CHF 500,000 in sales revenue in the last financial year (Art. 957 Abs. 1 Ziff. 1 OR). Sole proprietorships with less than CHF 500,000 turnover only need to keep records of revenue and expenditure as well as the asset situation (Art. 957 Abs. 2 Ziff. 1 OR).
The commercial register entry is therefore important, but the accounting obligation for sole proprietorships is additionally based on the turnover limit of CHF 500,000.
What must the company name of a sole proprietorship contain?
In the case of a sole proprietorship, the essential content of the company name must consist of the family name of the owner. The first name can be included, but does not have to be (Art. 945 Abs. 1 OR).
For example, an addition describing the activity is permitted, as long as it does not create a misleading statement. An addition suggesting an association is not permitted (Art. 945 Abs. 3 OR). A sole proprietorship must therefore not present itself as if it were an LLC, stock corporation, or other partnership.
Examples of typical company names:
Situation | Example |
|---|---|
Name with activity | Müller Gartenbau |
First name and last name | Anna Keller Design |
Fictional element with family name | Keller Studio Nord |
Not suitable for a sole proprietorship | Keller & Partner LLC |
The family name must be clearly recognizable. If other family names appear in the company name, it must be clear which name belongs to the owner (Art. 945 Abs. 2 OR).
How does the registration process work in practice?
The sole proprietorship is registered with the commercial register office at the place of establishment. When registering, supporting documents only need to be submitted if the facts to be registered do not already emerge from the registration application or if other regulations require this (Art. 37 Abs. 1 HRegV).
If your sole proprietorship has already been assigned a business identification number, you must state this in the application (Art. 37 Abs. 2 HRegV).
In practice, you should clarify the following in particular before registering:
What exactly should the company name be?
Where is the headquarters or legal domicile located?
What purpose should the company have in the commercial register?
Who is the owner?
Are there other persons with signing authority?
After registration, the relevant information becomes visible to the public. This makes your sole proprietorship easier to verify for business partners, banks, and authorities.
Conclusion: When is a commercial register entry worth it?
The commercial register entry of a sole proprietorship is mandatory as soon as your business has achieved a turnover of at least CHF 100,000 in the last financial year. For liberal professions and agriculture, it additionally depends on whether the activity is conducted in a commercial manner (Art. 931 Abs. 1 OR).
Below this threshold, registration is voluntary. It can be worth it if you want to appear more professional, build trust, protect your company name locally, or work with larger business partners.
At the same time, you should know the consequences. Registration costs fees, changes must be reported, and as a registered owner you are subject to debt collection through bankruptcy (Art. 39 Abs. 1 Ziff. 1 SchKG). Most importantly, the commercial register entry does not protect your private assets. For that, you would need a different legal form, such as an LLC or stock corporation.
Frequently Asked Questions about the commercial register entry of a sole proprietorship
Do I have to register my sole proprietorship as soon as it is founded?
No. In principle, a sole proprietorship can exist even before being registered in the commercial register. The entry becomes mandatory in particular when your business has generated a turnover of at least CHF 100,000 in the last financial year (Art. 931 Abs. 1 OR).
Can I register even with a turnover below CHF 100,000?
Yes. Sole proprietorships that are not subject to registration have the right to register voluntarily in the commercial register (Art. 931 Abs. 3 OR).
Does the commercial register entry protect my company name Switzerland-wide?
For sole proprietorships, the entry protects the company name in the same location. Another person may not use the same sole proprietorship there (Art. 946 Abs. 1 OR). For broader protection, a trademark may make sense.
Do I have to keep double-entry bookkeeping after registration?
Not automatically. Sole proprietorships only have to keep comprehensive accounts and financial reporting from a turnover of CHF 500,000 in the last financial year (Art. 957 Abs. 1 Ziff. 1 OR). Below that, simplified bookkeeping of income, expenditures, and asset situation is sufficient (Art. 957 Abs. 2 Ziff. 1 OR).
