Setting up a sole proprietorship in Switzerland: pros and cons

The sole proprietorship is the simplest legal form for setting up a company in Switzerland. This form of company is particularly suitable for individuals who want to set up a business with no partners and with little capital outlay.

If the sole proprietorship is not the right legal form for you, take a look at the advantages and disadvantages of the LLC or the PLC.

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Setting up a sole proprietorship: advantages

• Low start-up costs: The sole proprietorship is the most cost-effective legal form, as there is no minimum capital requirement and no high notary fees or commercial register entries are incurred, except in certain cantons.

• Simple formation process: The formation process is straightforward and requires little bureaucracy. You can set up your sole proprietorship in just a few steps, without having to overcome complex administrative hurdles.

• Full control: As the business owner, you have full control over all business decisions and do not have to coordinate with other shareholders. This makes managing the business much easier.

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Setting up a sole proprietorship: disadvantages

• Unlimited liability: One of the biggest disadvantages of a sole proprietorship is the unlimited liability. This means that you are liable not only with your business assets but also with your personal assets. In the event of insolvency, this can endanger your livelihood.
  

• Limited financing options: Since a sole proprietorship involves only one person and the capital comes solely from the owner, it is more difficult to attract external investors or lenders. This can limit growth potential.

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Conclusion

The sole proprietorship is a cost-effective and uncomplicated legal form for sole traders in Switzerland. It is particularly suitable for entrepreneurs who want to start up without a lot of initial capital. However, you should be aware of the risks, especially personal liability.

Do you want to set up your sole proprietorship in an uncomplicated way? Startups.ch will support you every step of the way.

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