What does digital company formation mean in Switzerland?
A digital company formation does not always mean that the entire process is completed entirely online. In practice, it usually means that you prepare the formation data digitally, generate forms online, bundle administrative registrations and can submit certain steps electronically.
Among other things, the federal government provides the online portal EasyGov for this purpose. There, founders can record administrative steps centrally. Depending on the legal form, this includes registrations with the commercial register, the AHV compensation fund, VAT and accident insurance.
Legally crucial, however, remains the commercial register. It records and publishes important facts about companies and serves to ensure legal certainty and the protection of third parties (Art. 927 Abs. 1 OR). This means: only the register entry makes certain information publicly verifiable, such as the company name, registered office, purpose and persons authorized to represent the company.
Which legal form is the easiest to set up online?
As a rule, the sole proprietorship is the easiest to handle digitally. Anyone who sets up a sole proprietorship does not establish their own legal entity, but acts in business as a natural person. A minimum capital is not required for this.
A sole proprietorship must be entered in the commercial register if it achieved revenue of at least CHF 100'000 in the last financial year (Art. 931 Abs. 1 OR). Below this threshold, registration is in principle voluntary (Art. 913 Abs. 3 OR). For sole proprietorships, additional supporting documents must only be submitted with the application if the facts to be entered do not already emerge from the application or other regulations require this (Art. 37 Abs. 1 HRegV).
For a LLC or stock corporation, the process is more formal. Both legal forms require a public deed. The stock corporation is established by the founders declaring in a public deed that they are founding a stock corporation, specifying the articles of association and appointing the governing bodies (Art. 629 Abs. 1 OR). The same basic principle applies to the LLC (Art. 777 Abs. 1 OR). That is why, although you can prepare a LLC or stock corporation online, you cannot simply set one up completely with a click.
How does the online process work step-by-step?
The digital process starts with the basic data. You determine which legal form you want to choose, what the company should be called, where its registered office is, what purpose it pursues and who should have signing authority. For a LLC or stock corporation, capital, ownership structures, governing bodies, articles of association and auditing issues are added.
Thereafter, the documents are prepared. For a sole proprietorship, this is primarily about the application for the commercial register, if registration is necessary or desired. For sole proprietorships, the company name, corporate identification number, registered office, legal domicile, purpose, owner and persons authorized to represent the company, among other things, are entered in the commercial register (Art. 38 HRegV).
For a stock corporation, the public deed, the articles of association, declarations of acceptance by the members of the board of directors, if applicable, documents relating to the auditors and, in the case of cash contributions, a bank confirmation, among other things, must be submitted for formation (Art. 43 Abs. 1 HRegV). For a LLC, the requirements are similar, in particular with a public deed, articles of association, if applicable, declarations of acceptance by the managing directors, auditing documents and a bank confirmation for cash contributions (Art. 71 Abs. 1 HRegV).
This is followed by notarization in the case of LLC and stock corporation. The company is then registered in the commercial register. The stock corporation must be registered at the place of its registered office (Art. 640 OR). The same applies to the LLC (Art. 778 OR). The stock corporation only acquires legal personality when it is entered in the commercial register (Art. 643 Abs. 1 OR). The LLC also acquires its legal personality through registration (Art. 779 Abs. 1 OR).
What else do you need for a LLC and stock corporation?
If you want to set up a company online in Switzerland and choose a LLC or stock corporation, you above all need clarity regarding capital, articles of association and organization.
For the LLC, the share capital is at least CHF 20'000 (Art. 773 Abs. 1 OR). For the stock corporation, the share capital is at least CHF 100'000 (Art. 621 Abs. 1 OR). For both legal forms, the capital must be clearly declared during the formation process and, in the case of cash contributions, proven via a bank confirmation, unless the bank is already named in the public deed (Art. 43 Abs. 1 lit. f HRegV, Art. 71 Abs. 1 lit. g HRegV).
Another point is the audit. Under certain conditions, small companies can opt out of the limited audit. For a stock corporation, this is possible with the consent of all shareholders if the company does not have more than ten full-time positions on an annual average (Art. 727a Abs. 2 OR). For the LLC, the provisions of company law regarding the auditor apply accordingly (Art. 818 Abs. 1 OR).
How important is the company name?
The company name is more than branding. It must be legally permissible. In principle, any company may contain descriptive details or fanciful names, as long as it is true, not misleading and does not contradict any public interest (Art. 944 Abs. 1 OR).
In the case of a sole proprietorship, the family name of the owner must be part of the company name (Art. 945 Abs. 1 OR). In addition, no suffix may be used that implies a company relationship (Art. 945 Abs. 3 OR). A sole proprietorship should therefore not look as if behind it is a LLC, stock corporation or several shareholders.
For LLC and stock corporation, the choice of company name is more free. Commercial companies can basically choose their name freely, but must state the legal form (Art. 950 Abs. 1 OR). In addition, the name of a commercial company must be clearly distinguishable from all company names of commercial companies and cooperatives already registered in Switzerland (Art. 951 OR). The Federal Supreme Court assesses distinctiveness based on the overall impression. Particularly characteristic elements such as fanciful names can carry great weight (BGer 4A_125/2019 E. 2.1).
A name check before starting a business is therefore always worthwhile. The commercial register does not check every conceivable risk of confusion in the market for you.
Can the commercial register registration be done electronically?
Yes, electronic registrations are generally provided for. The Commercial Register Ordinance explicitly regulates electronic transactions with the commercial register authorities (Art. 1 lit. c HRegV). Electronic registrations must be signed with a qualified electronic signature with a qualified electronic time stamp (Art. 18 Abs. 4 HRegV).
This is important because "prepared online" and "legally submitted electronically" are not the same thing. Depending on the canton, legal form and formation model, notarizations, notary steps or paper documents may still play a role. Particularly for LLC and stock corporation, the practical process therefore depends heavily on how the notary's office, bank and commercial register work together.
How long does it take to set up a company online?
The duration depends heavily on the legal form, the quality of the documents and the workload of the offices involved. A simple sole proprietorship is usually prepared faster than a LLC or stock corporation. For corporations, there are capital payment, bank confirmation, articles of association, notarization and commercial register examination.
The legal logic is clear: the commercial register is based on an registration, and the facts to be registered must be proven (Art. 929 Abs. 2 OR). If information is missing, documents do not match or the name is problematic, the process can be delayed.
Anyone who wants to set up a company online in Switzerland should therefore not wait until the desired start date to begin preparing the documents. It makes sense to clarify the legal form, the company name, the purpose, the ownership structures and the signing rights early on.
What are the most common mistakes in digital foundation?
The most common mistake is assuming that online entry already replaces foundation. For sole proprietorships, the digital process can be very lean. For LLC and stock corporation, however, public notarization remains the central step of establishment (Art. 629 Abs. 1 OR, Art. 777 Abs. 1 OR).
A second mistake is verifying the company name too late. Especially for LLC and stock corporation, the company name must be clearly distinguishable (Art. 951 OR). Anyone who has already prepared a logo, domain and website before the company name is legally checked risks extra effort.
A third mistake concerns the roles in the company. Already at the foundation stage, it must be clear who is a partner, board member, managing director or signatory. This information later appears in the commercial register, for example for the stock corporation under Art. 45 Abs. 1 HRegV and for the LLC under Art. 73 Abs. 1 HRegV.
If you need support with the topic of company formation, Jurata is always happy to help you.
Conclusion: Online foundation is possible, but not for every legal form in the same way
Starting a company online in Switzerland is well possible today, but the degree of digitization depends heavily on the legal form. The sole proprietorship is the less complicated. The LLC and stock corporation can be prepared digitally, but still require public notarization, proof of capital and registration in the commercial register.
Those who prepare properly save time. Crucial are the suitable legal form, a permissible company name, complete documents and a realistic understanding of the process. This way, digital company formation does not turn into a form marathon, but a structured start to self-employment.
