The sole proprietorship

Setting up a sole proprietorship is straightforward and requires no minimum investment. Sole proprietorships are companies without their own legal personality.

Many new entrepreneurs who start a micro or small business choose this legal form to begin with.

One of the biggest advantages of a sole proprietorship in Switzerland is that no minimum capital is required. In contrast to corporations such as the LLC or the PLC, which require a certain amount of share capital, a sole proprietorship can be founded without any financial entry hurdle.

This makes the sole proprietorship particularly attractive for founders who have limited financial resources but still want to realize their business idea.

The sole proprietorship is suitable for a wide range of business activities. Whether in trade, commerce, the service sector or the IT industry - the sole proprietorship can be used flexibly.

However, it is important that the business activity is entered in the commercial register if the annual turnover exceeds CHF 100,000. The sole proprietorship is then legally recognized and can officially participate in economic life.

As the name suggests, a sole proprietorship is founded and managed by one person. The owner is also the managing director and bears full responsibility for the company. However, employees can be hired to support the company.

However, the legal and financial responsibility remains with the owner, who is also liable with his or her private assets.

A major advantage of the sole proprietorship is that it is simple and inexpensive to set up. There are no complicated formalities or high fees to pay. In addition, there is no obligation to keep double-entry books or publish annual accounts, which reduces the administrative burden.

Another advantage is the owner's complete freedom to make decisions, as there are no co-partners or shareholders.

One of the main disadvantages of a sole proprietorship is the unlimited liability. The owner is liable for the debts and liabilities of the company with all of his or her private assets. This can threaten the existence of the company in the event of financial difficulties. It can also be more difficult to raise capital, as banks and investors are often more reluctant to finance sole proprietorships.

Finally, the ability to grow and expand may also be limited, as all entrepreneurial decisions and responsibilities rest on one person.

In summary, it can be said that sole proprietorships in Switzerland offer an easy way to start your own business. However, it is also associated with certain risks and restrictions that need to be carefully weighed up.