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How to find the right legal form for your company

19.02.2026

You’ve been giving the matter some thought: your idea, your customers, and maybe you’ve even created a business plan. Now you are faced with a decision that suddenly feels big: the legal form. Sole proprietorship, limited liability company, private limited company or something else entirely? Anyone setting up a company in Switzerland is confronted at an early stage with the question of what legal form suits their specific situation.

At a glance

  • Choosing a legal form is one of the first important decisions when setting up a company, and it continues to have an impact long after the start.
  • It influences how much personal liability you bear, what costs you incur and how much responsibility you assume.
  • There is no generally correct legal form. The decisive factor is what suits your personal situation, your perception of risk and your plans.
  • People who deal with retirement planning, growth and collaboration at an early stage make more sustainable decisions.

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Why choosing a legal form has so much to do with your life

The legal form is more than just a formal shell for your company. It plays a role in determining

  • whether or not you are personally liable,
  • how high your fixed costs will be at the outset,
  • your social insurance status and
  • how flexibly you can grow or take on partners later on.

Particularly in the early stages of setting up a company, the lines between business-related and personal questions are blurred. You might have a family. Perhaps you are setting up your company while still employed elsewhere. You may be making a conscious decision to start small, or you may already be thinking about growth.

All of these factors matter – and that is precisely why this decision often feels so big.

These questions will help you to make a decision

Before considering individual legal forms, it is worth taking a look at your personal situation. The right legal form is not determined by rules, but by realistic considerations. The costs of setting up a company in Switzerland also play a role – due to starting capital, ongoing obligations or administrative costs, for example, which vary depending on the legal form.

These questions will help you to arrange your thoughts:

  • How much risk am I able and willing to take?
    Am I prepared to be held personally liable – or do I need a clear separation?
  • How important is financial security to me?
    Keywords here are retirement planning, social insurance and predictability.
  • Am I starting out on my own or with a team?
  • How fast do I want to grow?
    Do I intend to keep it small or should I plan bigger?
  • How much administrative workload is realistic for me?

Many of these questions are asked by company founders not just once, but several times during the course of their self-employment. Once you have the answers in mind, it becomes considerably easier to determine the appropriate legal forms.

An overview of the main legal forms

People setting up a company in Switzerland have various legal forms to choose from. Each has its strengths and limitations. The decisive factor is which one best suits your goals and your everyday life.

Sole proprietorship is the simplest and most common legal form in Switzerland. It is particularly suitable if you are setting up your own company and your business model has manageable risks.

You don’t need any starting capital, you can get started informally and you’re very flexible. At the same time, however, this freedom also means responsibility: you are liable with your private assets.

Typically suitable for you if ...

  • you are starting out on your own,
  • you want to get started quickly and easily, and
  • your financial risk is manageable

The link will open in a new window Go to the article: How to set up a sole proprietorship

The general partnership is a partnership for two or more people. It is suitable if you want to run a company together and know each other well.

All partners are jointly and severally liable with their private assets. This requires trust, clear agreements and, ideally, a written contract.

Typically suitable for you if ...

  • you are setting up a company with one other person or a small team,
  • you want to share responsibility and
  • the business remains manageable.

As the term “limited liability company” indicates, your private assets are clearly separated from the company. As a rule, you are only liable with regard to the company’s assets. For this, you need a nominal capital of at least 20,000 francs and must take a more formal approach, for example with articles of association and notarial certification. A limited liability company is suitable if your business is growing, involves greater risks or involves several people.

Typically suitable for you if ...

  • you want to limit private risk,
  • you value structure and liability and
  • you are collaborating with partners.

A private limited company is the most formal legal form. It offers a high level of credibility and clear structures and is particularly suitable for larger projects or investor models.

The capital requirements are higher, as is the administrative burden. On the other hand, liability is clearly regulated and participation can be structured flexibly.

Typically suitable for you if ...

  • you are thinking bigger from the outset,
  • you want to raise capital, and
  • professionalism and scalability are key.

Comparing legal forms: liability, costs and responsibility

When it comes to the right legal form, direct comparison can help. After all, many differences only become apparent when liability, costs and responsibility are laid out side by side.

The following table shows you the differences between the most common legal forms in Switzerland so that you can better assess what suits your situation.

Comparative table: legal forms in Switzerland

Comparison criterion Sole proprietorship General partnership Limited liability company Private limited company
Comparison criterion
Number of founders
 Sole proprietorship
1 person
 General partnership
At least 2 people
 Limited liability company
1 or more people
 Private limited company
1 or more people
Comparison criterion
Legal form
 Sole proprietorship
Natural person
 General partnership
Partnership
 Limited liability company
Legal entity
 Private limited company
Legal entity
Comparison criterion
Liability
 Sole proprietorship
Unlimited with private assets
 General partnership
Jointly liable with private assets
 Limited liability company
Limited to company assets
 Private limited company
Limited to company assets
Comparison criterion
Minimum capital
 Sole proprietorship
None
 General partnership
None
 Limited liability company
CHF 20’000
 Private limited company
CHF 100’000 (min. CHF 50’000 paid in)
Comparison criterion
Startup costs
 Sole proprietorship
Very low
 General partnership
Low
 Limited liability company
Medium (notary, articles of association)
 Private limited company
Higher (notary, articles of association)
Comparison criterion
Administrative obligations
 Sole proprietorship
Low
 General partnership
Low to medium
 Limited liability company
Medium
 Private limited company
Higher
Comparison criterion
Suitability for growth
 Sole proprietorship
Limited
 General partnership
Limited
 Limited liability company
Good
 Private limited company
Very good
Comparison criterion
Typically suitable if …
 Sole proprietorship
you want to set up the company flexibly on your own
 General partnership
you want to run a manageable business together
 Limited liability company
you are looking for security and structure
 Private limited company
you are looking for investors or planning strong growth

What many company founders underestimate

During the startup phase, the focus is often on the idea: the market, the range of products and services, the first customers. By contrast, the choice of legal form seems to be a mere formality, something that you simply have to do.

What many people don’t realize until later is that this decision will stay with you for longer than you think. For example, it affects whether you are personally liable, how you manage your retirement planning or how much effort is required to change the legal form subsequently.

A typical startup situation

Tom starts out as a sole proprietorship because he wants to get started quickly. Orders come in, the business grows. It is only later that he realizes that personal liability and the lack of retirement solutions are increasingly becoming a burden for him. Changing to a limited liability company is a sensible move, but it does involve administrative work, which he would have liked to have planned for earlier.

Next step: from decision to implementation

Finding the right legal form for you is an important milestone. The next step is to implement it in concrete terms – step by step.

PostFinance supports company founders and startups during this phase. On our overview page, you will find bundled information, practical tools and suitable offers to help you start your journey to self-employment.

Your start to self-employment. Our support.

Your start to self-employment. Our support.

Find out more

The most frequently asked questions about choosing the right legal form:

  • The most important legal forms in Switzerland include sole proprietorship (Einzelfirma), general partnership (Kollektivgesellschaft), limited liability company (GmbH) and private limited company (AG).

  • The sole proprietorship is the most straightforward, but it does come with personal liability.

  • No. In the case of limited liability companies and private limited companies, liability is generally limited to the company’s assets.

  • In principle, it is possible to change legal form – for example, from a sole proprietorship to a limited liability company. This requires a formal incorporation process (e.g. notarization, articles of association, entry in the commercial register) and, depending on the target structure, a transfer of assets or conversion. The change therefore entails a high administrative and financial burden.

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