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Founding a sole proprietorship

You want to found a sole proprietorship? Our checklist and templates will help you.

The answer in detail

Everything about the topic of founding a sole proprietorship

Our checklist and sample text will show you all you need to know about founding a sole proprietorship including its registration in the commercial register.

What is a sole proprietorship?

A sole proprietorship is a company that exists as soon as a person takes up a business activity. A sole proprietorship does not have its own legal personality, meaning the natural person can be held liable with their own private and business assets. For this reason it is not like a corporation (AG) or limited liability company (GmbH) where there is a company through which all contracts are made and which can be held liable with its assets. Here, there is no difference between the private individual and the business activity.

What are the advantages of a sole proprietorship?

  • You do not need any defined starting capital.
  • Founding the company is quick and easy.
  • The earnings can go directly to the business owner.
  • The decision-making processes are quick thanks to simple business management and accounting.

What are the disadvantages of a sole proprietorship?

  • You can be held liable with your personal assets.
  • Raising additional capital for the company is more difficult.

What does it mean to initiate debt collection proceedings against a sole proprietorship?

Owners of sole proprietorships are generally deemed to be self-employed. They must register with the responsible compensation fund. They are not insured in the event of unemployment, do not have mandatory accident coverage, and are not subject to mandatory occupational pension coverage.

What name can I choose for my sole proprietorship?

By law, the name of the company must include the name of the owner. To avoid misunderstandings and a dispute regarding the name, it is worth clarifying in advance, whether a similar name already exists.

Where is the sole proprietorship domiciled?

It is domiciled where the company has its premises, or if it does not have any, then at a c/o address.

Do I have to enter my sole proprietorship in the commercial register?

The entry is voluntary, and only mandatory from annual sales of CHF 100,000. If the company is entered in the commercial register, then the name enjoys greater protection and the owner is subject to enforcement proceedings leading to bankruptcy. A voluntary entry can be reasonable to lend greater credibility to the company if it operates internationally, for example.

What do I need to keep in mind with regard to accounting?

Up to annual sales of CHF 500,000, only single-entry bookkeeping is required. Above that amount requires ordinary commercial accounting.

Is my sole proprietorship subject to value-added tax?

Only from annual sales of CHF 100,000. 

Below, you will find a checklist for founding a sole proprietorship and a template for entering the company in the commercial register, as well as additional legal information.

Important documents
Allgemeine rechtliche Hinweise zur GrĂ¼ndung eines Einzelunternehmens
Checkliste GrĂ¼ndung eines Einzelunternehmens
Vorlage Handelsregisteranmeldung