Have you decided to create a limited company (SA)? You are asking yourself: “but how do I do it”? This practical guide from the Lawrence team will help you!
In short, there are 8 (9 depending on the case) steps to take.
Step 1: Intellectual Property
Your company was born out of one of your ideas. Long before the company is even created, it must be protected to make sure that no one steals it and that you can collect the profits that are due to you.
An idea can be protected through a patent, trademark, design or intellectual property registration. The application must be made to the Swiss Federal Institute of Intellectual Property to guarantee the protection of your idea in Switzerland.
For more information, we have written another article dealing in more detail with the protection of ideas and trademarks (see article)!
Step 1, validated! Let’s go to step 2.
- The legal form
In this article, we will consider that the form chosen is the SA. If you do not know which structure to choose for your company, we invite you to read this article on Lawrence’s blog (see article).
What do you need to consider when setting up a limited company?
- Drawing up a budget
The foundation of a public limited company is expensive and requires a founding capital of CHF 100’000. As with any company, a financial plan must then be drawn up for the first few years of the corporation’s existence, so that everything can be put in place. The creation of a budget is an imperative and essential step in the process of founding a corporation.
- The company name
Determining a company name validated by the commercial register allows the following steps to be taken and ensures the creation of the company.
- The share capital
As a corporation is a capital company, it is essential for it to have proper control over its capital and shares. Thus, the capital will have to be deposited in a bank pending the creation of the company. Once the corporation is created, this capital will be paid up and can be used.
It is also imperative to clarify the situation of the shareholders, the pillars of a corporation. This is done through a shareholders’ agreement, a document establishing their rights. We explain what the shareholders’ agreement is in this article: (see article)
- Organs of the SA
The law requires that a public limited company has a Board of Directors, auditors and signatories. It is important to appoint the members of these bodies and to register them with the competent authority, the Commercial Register.
- Drawing up documents
A corporation is legally required to draw up a memorandum of association and articles of association. They must be submitted to the Commercial Register and authenticated by a notary.
Once these aspects have been covered, you can apply to have the company entered in the Commercial Register.
- The Commercial Register (CR)
Registration in the CR is mandatory for SAs. This registration protects the name of the company and makes public all the information concerning it (its address, its field of activity and the name of its director).
- Social insurance
If you hire employees (in a public limited company, the owner is also considered an employee), you have to take into account social insurance. Your company will have to register with the AHV compensation fund, as well as draw up contracts in connection with the UVG and LLP (accident and provident insurance). The corporation will have to pay a certain amount to the 1st, 2nd and 3rd pillar of its employees.
Value added tax is a tax on consumption, which is included in the prices of goods and services. Companies will have to pay this tax to the state and register with the register of VAT taxable persons.
Here are the VAT rates in Switzerland:
– Standard rate: 7.7% (cars, watches, jewellery, clothing, alcohol, services)
– Special rate: 3.7% (nights in hotel, breakfast included)
– Reduced rate: 2.5% (Food, books, newspapers, medication, everyday objects)
In principle, every company is subject to value added tax. If you have any questions about whether or not your company is subject to VAT, please read our article on this subject: (see article)
A company is subject to 4 types of taxes:
- Stamp duty
- Corporate income tax
- Capital tax
- The property tax
It is quite possible to optimize these taxes; a lawyer can assist the corporation in these steps. It is also important to make sure that the functioning is understood, and that the corporation works with a person in charge of this.
- The employees
The owner of a SA is considered as an employee.
When creating a SA, various regulatory elements must be established.
- Employment contracts;
- Working hours of employees;
- Salaries and their payment;
- Vacation pay;
- Termination procedure;
- Security and social insurance.
- Tax benefits
In some cases, the company may benefit from tax advantages if :
- It contributes to job placement (of unemployed people for example);
- It is a regional initiative, such as a communal fund;
- It enables the development of the economic condition of a rural, border or mountain area.
- Import and export
If your SA imports and/or exports goods, it is important to find out about free trade agreements, fees and customs procedures applicable to the countries with which it collaborates.
We will be honest: setting up a SA is a long and costly process. This checklist may seem daunting, but a good approach will make it child’s play! Do not hesitate to contact the competent authorities or a specialised lawyer.
Soliciting a lawyer is often a simple and practical solution, allowing you to relieve yourself of a considerable burden and save precious time. Lawrence can assist you at every stage of the creation of your company!