How to create a Sàrl?

A limited liability company (Sàrl) is a distinct legal entity in which one or more natural persons or legal entities participate. Each member takes equity in the company by contributing to its capital.  In order to successfully create such an entity, the law imposes some specific requirements (art. 772-827 CO).

Conditions and specificities

 

As the foundation of a limited liability requires a relatively low minimum capital (CHF 20’000.-), such companies are increasingly preferred over corporations in Switzerland.

The members’ liability is limited to the amount of the registered capital, which must be fully paid in. This means that, in principle, the members of the Sàrl cannot be held responsible for the company’s debts and obligations.

The company may choose its name freely, but the addition “Sàrl” is mandatory.

Individuals or legal entities contributing to the capital of the company do not have shares, as in a corporation, but a capital contribution. An assignment of a capital contribution must be done in writing and requires the consent of the member’s general meeting (Art. 785-786 CO).

The name, address and place of origin of company members, together with the number and the nominal value of their capital contribution must be entered in the Commercial Register (art. 791 I CI).

Except for large companies, the accounts must be reviewed by an auditor in a limited audit (art. 727a I CO). However, companies having not more than ten full-time employees on annual average may be dispensed from having their accounts audited (art. 727a II CO).

 

The company is established when the founder members declare by public deed that they are founding a limited liability company, lay down the articles of association and appoint the management bodies (art. 777 I CO). In order to be duly incorporated, the company must be registered in the Commercial Register at the place where it has its seat (art. 778 CO).

The main steps to establish a Sàrl are the following:
• choose a business name and check its availability;
• choose a domiciliation for the company;
• open an escrow account to deposit the capital amount (min. CHF 20’000.-);
• choose the management bodies and the auditor (if necessary);
• draft the article of association;
• hold the incorporating meeting before a public notary;
• file the documents to the Commercial Register.

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