Which legal form is suitable for a consulting company?
For many consulting firms, three legal forms are particularly suitable: Sole proprietorship, LLC, and stock corporation. The right choice depends less on the label than on your specific starting point. The decisive factors are liability, capital requirements, external impact, growth, and administrative complexity.
The sole proprietorship is often the simplest solution if you start alone, need little investment, and the risk remains manageable. No legal minimum capital is required. In return, you are personally liable. Legally, you are not separated from your company. If you run a business as a natural person and achieved a turnover of at least CHF 100'000 in the last financial year, you must register your sole proprietorship in the commercial register. Below this threshold, voluntary registration is possible (Art. 931 Abs. 1 OR, Art. 931 Abs. 3 OR).
The LLC is often attractive if the consulting company needs to project a more professional appearance or if you want to limit your private risk. The share capital is at least CHF 20'000 (Art. 773 Abs. 1 OR). The LLC is established by public deed, with the founders determining the articles of association and appointing the corporate bodies (Art. 777 Abs. 1 OR). It must be entered in the commercial register at its registered office (Art. 778 OR) and acquires its legal personality upon registration (Art. 779 Abs. 1 OR).
The stock corporation is more suitable if you have larger growth plans, want to take on investors, or need a particularly strong separation between the private individual and the company. The share capital is at least CHF 100'000 (Art. 621 Abs. 1 OR). The stock corporation is also established by public deed, with articles of association, share subscription, and appointment of corporate bodies (Art. 629 Abs. 1 OR). It only acquires legal personality through entry in the commercial register (Art. 643 Abs. 1 OR).
As a rule of thumb: Anyone who wants to start a consulting firm and starts alone with low risk should first look into a sole proprietorship. If you want to place greater emphasis on liability, external impact, and clear structures, you should look into an LLC. The stock corporation usually makes sense when partnerships, investors, or larger growth plans play a role.
What does the legal form mean for the company name?
In the case of a sole proprietorship, the essential content of the company must consist of your family name, with or without first names (Art. 945 Abs. 1 OR). A fantasy name alone is therefore not sufficient. Additions are possible as long as they do not falsely suggest a corporate relationship (Art. 945 Abs. 3 OR).
With the LLC and stock corporation, the choice of name is freer. Commercial companies can basically choose their company name freely, but must state the legal form (Art. 950 Abs. 1 OR). In addition, the name of a commercial company must differ significantly from all already registered names of commercial companies and cooperatives in Switzerland (Art. 951 OR).
The name is particularly important for a consulting company because trust and specialization often develop right from the first contact. A name should therefore not only be legally permissible but also make clear what you stand for.
What bookkeeping does a consulting company need?
The bookkeeping obligation depends heavily on the legal form and turnover. Legal entities, especially the LLC and stock corporation, are subject to the obligation to keep accounts and present financial statements (Art. 957 Abs. 1 Ziff. 2 OR). Sole proprietorships and partnerships must keep full accounts and present financial statements if they have achieved a turnover of at least CHF 500'000 in the last financial year (Art. 957 Abs. 1 Ziff. 1 OR).
A sole proprietorship with a turnover of less than CHF 500'000 must at least keep accounts of income, expenditure, and assets (Art. 957 Abs. 2 Ziff. 1 OR). That sounds simple, but it still means: collecting receipts, documenting business transactions traceably, and cleanly separating private and business expenses.
Bookkeeping must record business transactions fully, truthfully, and systematically. In addition, supporting documents are required for individual posting transactions, clarity, appropriateness, and verifiability (Art. 957a Abs. 2 OR). Business books, accounting records, business reports, and audit reports must be kept for ten years (Art. 958f Abs. 1 OR).
Particularly with a consulting company, many typical bookkeeping topics arise in the very first months: software subscriptions, travel expenses, further training, external freelancers, marketing costs, home office shares, and customer invoices. Anyone who records these cleanly from the start saves a lot of effort later. If you need support with bookkeeping, Jurata is always happy to help you further.
When does value added tax become relevant?
Value added tax is particularly important for consulting companies because consulting is usually a service rendered for payment. In principle, anyone who operates a business regardless of legal form, purpose, and profit intention, and provides services in Germany, or has their registered office, place of residence, or permanent establishment in Germany, is liable for tax (Art. 10 Abs. 1 MWSTG).
However, anyone who achieves less than CHF 100'000 turnover from taxable services within one year in Switzerland and abroad is exempt from the obligation to pay value added tax (Art. 10 Abs. 2 lit. a MWSTG). For many new consulting companies, this means: turnover planning is not only relevant for business management but also for tax purposes.
It is important not to wait until the end of the year to look at the threshold value. Anyone who can foresee that the consulting company will grow rapidly should plan for value added tax early on. Otherwise, offers, invoices, prices, and accounting will have to be adjusted later under time pressure.
What contracts does a consulting company need?
Anyone who wants to start a consulting company should not only think about the commercial register and accounting. The most important operational protection often lies in the customer contract. Consulting is usually a matter of trust. This is exactly why it should be clear in writing what is owed and what is not.
A contract is created by the matching mutual expression of intent by the parties (Art. 1 Abs. 1 OR). For many consulting mandates, the simple mandate is the natural legal starting point. In the case of a mandate, the mandatary undertakes to carry out the transactions or services assigned to him in accordance with the contract (Art. 394 Abs. 1 OR). Remuneration is owed if it is agreed upon or customary (Art. 394 Abs. 3 OR).
This is central to consulting: In many mandates, the consultant does not owe a guaranteed economic success, but rather diligent action. The mandatary is liable for the faithful and careful execution of the assigned transaction (Art. 398 Abs. 2 OR). The Federal Supreme Court has held with regard to expert services that a mandate exists if the accuracy of the result cannot be objectively guaranteed (BGE 127 III 328 E. 2c).
It can be different if a clearly measurable work result is owed. Under a contract for work and services, the contractor undertakes to produce a work and the customer to pay remuneration (Art. 363 OR). A specific concept, a report, or a technical deliverable can, depending on the content, have elements of a contract for work and services. What is decisive is therefore not the title of the contract, but what is actually promised.
What should be regulated in the consulting contract?
A good consulting contract should clearly state what services you perform, what cooperation the client owes, how the fee is calculated, and what results can be expected. Particularly important is the distinction between consulting, implementation, and success guarantee.
For example, if you develop a strategy, you should not unintentionally guarantee the market success of this strategy. If, on the other hand, you deliver a specific report, a training concept, or a process documentation, it should be clear when this service is deemed to have been rendered.
Equally important are regulations on confidentiality, data protection, rights of use to documents, expenses, payment terms, termination, and liability. Particularly for recurring mandates, a framework agreement with individual service descriptions is worthwhile. In this way, cooperation remains flexible without every detail having to be renegotiated every time.
Which mistakes happen particularly often during foundation?
A common mistake is choosing the legal form based only on the incorporation costs. Although the sole proprietorship is simple, it can seem unsuitable in the case of higher risks or larger clients. Conversely, an LLC is not automatically better if you start very small and have hardly any liability risks.
A second mistake is doing bookkeeping too late. Many founders only collect receipts when the tax return approaches. It is better to work from day one with a separate business account, clear invoice numbers, and clean filing.
A third mistake concerns contracts. Anyone who only relies on emails, offers, or verbal agreements often has trouble proving exactly what was agreed upon in the event of a dispute. Especially with consulting services, whose success is not always objectively measurable, a good contract creates clarity.
Conclusion: Start lean, but structure cleanly
A consulting company in Switzerland can be built up comparatively leanly. Nevertheless, you should clarify the most important basics early on. The sole proprietorship is often suitable for a simple start, while the LLC offers more structure and a stronger separation between the private individual and the company. The stock corporation is primarily a topic for larger plans, shareholdings, or investors.
For accounting, the following applies: The cleaner you work from the start, the easier taxes, value added tax, annual financial statements, and growth will be. For contracts, the same applies. A clear consulting contract not only protects against disputes but also makes your offer more professional.
Anyone who wants to start a consulting company should therefore not wait until the first problems arise. Legal form, accounting, and contracts are not formalities. They are the foundation for turning expertise into a stable business.
Frequently asked questions about founding a consulting company
Do I absolutely need an LLC for a consulting company?
No. A consulting company can also be run as a sole proprietorship. An LLC is particularly interesting if you want a clearer legal structure, a more professional external image, or a stronger separation between the private individual and the company.
Do I have to register my sole proprietorship in the commercial register immediately?
Not always. A natural person must register their sole proprietorship if they run a business that achieved a turnover of at least CHF 100'000 in the last financial year (Art. 931 Abs. 1 OR). Below this threshold, voluntary registration is possible (Art. 931 Abs. 3 OR).
When do I need double-entry bookkeeping?
Sole proprietorships must keep full accounts and present financial statements if they achieved a turnover of at least CHF 500'000 in the last financial year (Art. 957 Abs. 1 Ziff. 1 OR). LLCs and stock corporations are, as legal entities, basically obliged to keep accounts and present financial statements (Art. 957 Abs. 1 Ziff. 2 OR).
Is a consulting contract more of a mandate or a contract for work and services?
Many consulting contracts are legally mandates because diligent action and not a guaranteed success is owed (Art. 394 Abs. 1 OR, Art. 398 Abs. 2 OR). If, on the other hand, an objectively verifiable work is promised, contract for work and services law can become relevant (Art. 363 OR).
