RSM – Setting up a company – Some tips and practical considerations
You want to start your own business and you have a number of questions about the process of setting up your company ? Indeed, it is true that this process can involve various stakeholders (Swiss public notary, bank, trade register, etc.) and can require rigor and organization in the preparation of documents to finalize the said incorporation and launch quickly its own activity on the market. When setting-up all your future company’s structure, it may be important to consider certain elements that may have an impact on how your company will work, allow you to reduce (or even avoid) some costs and finalize the creation process as soon as possible. Thus, it may be important to consider number of issues and requirements in the process of setting up your company which will be listed in this article.
Before starting the formal steps, it is necessary to have a global vision of the company’s set-up, particularly in relation to the purpose, activity, company name, etc. Subsequently, various legal and tax aspects will have to be considered, for which it is recommended to consult professionals, particularly in relation to the following points :
Location of the company
If you don’t have a clear idea of where to locate your company, it may be useful to consider the tax situation in different Swiss cantons. Indeed, each canton has its own tax legislation (in particular the tax rate at cantonal and municipal level), so it is recommended to consider the specificities of the authorities in order to determine the most adapted location for your future company.
Form of the company
It may be useful to discuss your requirements in order to identify the ideal structure (company or branch), as well as the legal form of the company (partnership or limited liability company) by analyzing the advantages and disadvantages of the different options (anonymity, credibility, minimum capital, tax rate, etc.). It is important to note that the steps to be taken may be different depending on the structure chosen.
Depending on the structure and legal form chosen, the requirements for the capital structure of the company differ. The minimum capital and the nominal value of the shares are not the same for a corporation, a limited liability company or a branch office.
Types of contribution
The amount of the share capital and the contributions made must be included in the company’s articles of association. The contributions may consist of cash, in-kind or asset recovery. In the case of a contribution-in-kind or recovery of assets, additional documents are required before the company can be registered in the trade register (contribution contract, foundation report, audit certificate of the accredited auditor). In addition, the assets contributed must meet certain requirements to be accepted as contributions in kind. Note that changes in this respect will come into force on 1 January 2023 (Our article of last March already presented you some legislative changes related to the Ltd).
Audit of the financial statements (opting-out)
For unlisted and medium-sized companies, the annual accounts will be subject to a limited audit instead of an ordinary audit (no exceeding, in two successive financial years, two of the three values provided for Art. 727 CO). However, if the company employs less than ten full-time employees, the company may waive the limited audit with the approval of all shareholders/partners. In such a case, it will be required to fill in an opting-out declaration so this this decision can be notified to the trade register when the company is established.
Possibility of a long financial year
During the year of the company’s foundation, the entrepreneur has the choice between a short financial year which ends at the end of the first fiscal year (often 31 December) or a long financial year which ends at the end of the following fiscal year. This option is only available for the year of the foundation and avoids certain costs, such as the closing of accounts and the filing of a tax return during the first year. However, the tolerance regarding the maximum duration of the first financial and tax year may vary from one canton to another.
Various specific clauses
It may be advisable to consider specific clauses during the process of setting up your company, as these must be provided for in the company’s articles of association to be applicable. This is particularly the case of clauses restricting the transferability of shares (Art. 685a CO), condition capital increase (Art. 653 CO) or preferred shares (which may concern the social rights of the shareholder, i.e. in connection with the exercise of voting rights, or property rights such as the right to the payment of an additional dividend). Thus, reviewing these different clauses with professionals could help avoid the costs of amending your company’s articles of association at a later stage (notary, GA, etc.) if these specific clauses were to be incorporated at a later stage. Note that changes in this respect will come into force on 1 January 2023 (Our article of last March already presented you some legislative changes related to the Ltd).
During the set-up process, it will be necessary to contact various stakeholders and professionals (notary, bank, etc.) in order for them to provide various documents required for the creation of your company (requisition to the trade register, certificate of deposit to name just a few). After contacting these various parties, you will need to collect a certain amount of information and documents concerning the partners/shareholders of the future company and the members of the board of partners/administration of the company. Such information may relate to both the identity and the signing authority granted to these persons. It is also important to note that the information/documents to be collected when setting up a company will vary depending on the identity of the shareholders (natural person or legal entity, Swiss or foreign). The documents may also have to comply with a particular form depending on the case (apostilled or legalized documents).
The assistance of our experts in this process allows us to ensure the completeness of your file in the preparation of the required information/documents and to limit possible delays in the creation of your company.
The above points show that it may be important to consider certain elements during the creation process as these will have a more or less considerable influence during the life of your company.
The various departments of RSM Switzerland are at your service to assist you during this process in connection with the creation, but also during the following stages by our various services and advice in the tax field (tax and VAT returns, domiciliation, etc…), accounting (establishment of financial statements, quarterly reporting, bookkeeping, etc.) and auditing.