Starting a business
Company purpose in Switzerland: how to write it, with examples
The corporate purpose describes what your Swiss company intends to do. Known as the but social in French, it appears in the articles of association and the commercial register. Start with the products or services you will actually sell, add related activities you genuinely plan to develop, and check any licensing requirements before finalising the wording.
By Romain Prieur · Swiss certified accountant
At a glance
Key takeaways
- The corporate purpose describes business activities; it is different from the company name and its marketing mission.
- A useful clause is clear enough to identify the business and flexible enough for realistic development.
- Registration does not authorise a regulated activity. Licences and professional qualifications must be checked separately.
- Changing the purpose of a Swiss LLC or corporation requires the appropriate corporate decision, a notarised amendment and registration.
What is a company’s corporate purpose?
The corporate purpose, also called the objects clause, sets out the activities of the company. In French-speaking Switzerland, you will see but social or objet social. Here, “social” refers to the company: it does not mean a charitable or social-impact mission.
The Swiss Code of Obligations requires a purpose in the articles of association of a corporation (SA/AG) and a limited liability company (Sàrl/GmbH). It helps shareholders, banks and other parties understand the business. It also matters when assessing the transactions that fall within the company’s powers of representation.
| Item | Illustrative example | Function |
|---|---|---|
| Registered company name | Atelier des Rives Sàrl | Identifies the legal entity |
| Corporate purpose | Design, manufacture and sale of furniture | Describes its activities |
| Marketing promise | Spaces designed to last | Communicates a customer benefit |
“Becoming the trusted partner of Swiss businesses” expresses an ambition, but does not explain what the company sells. Name the work you will perform.
How to draft your corporate purpose in four steps
1. Identify the main activity
What will the company invoice, to whom and for which products or services? “Consulting” says little. “Consulting in organisation and IT project management” makes the business easier to identify.
2. Add related activities already planned
A software developer may also provide maintenance, user training and software licensing. These activities belong together. Adding vehicle trading or restaurant operations merely because they might be useful one day makes the project harder to understand.
3. Remove unnecessary commercial details
A particular customer, temporary product name or specific software platform can make the clause too narrow. Describe the category of work. A change of tool should not, by itself, make your articles outdated.
4. Have the legal wording reviewed
Give your adviser or notary a practical description, the planned developments and any potentially regulated activities. They can assess supplementary clauses without losing sight of the main business. In Geneva, the filing is normally prepared in French: these English examples help you explain your project, but are not a substitute for the final wording in the filing language.
Three examples of corporate purpose clauses
These examples are starting points for discussion. They are not articles ready for signature and do not guarantee acceptance of a particular filing.
IT consulting and software services
“The company’s purpose is to provide IT consulting, software development and maintenance, and training relating to the use of such software.”
This identifies the services without tying the company to a particular technology. If hardware sales or data hosting are also planned, discuss whether they should be expressly included.
Furniture trading
“The company’s purpose is the purchase, sale, import and distribution of furniture and interior furnishing accessories.”
Trading is not the same as manufacturing. If the company will make furniture itself or provide installation services, explain this rather than assuming the activity is obvious.
Communications agency
“The company’s purpose is to provide communications consulting, content creation and the design of printed and digital communications materials.”
Event organisation or media buying may warrant additional wording. The clause should follow the business model, rather than an automatic list of industry keywords.
Depending on the project, supplementary wording may cover related transactions, investments in other companies or branches. Such wording supports the main purpose; it does not replace a clear description of it.
How broad should the purpose be?
A very narrow purpose can require amendments as the business evolves. An excessively vague one can complicate discussions with banks, partners and authorities. Ask whether someone unfamiliar with your work could understand what you intend to sell.
| Starting wording | Potential problem | How to improve it |
|---|---|---|
| All consulting and all trading | No identifiable core business | Name the sector and services |
| Maintenance of one customer’s software | Tied to a single contract | Describe the relevant software maintenance activity |
| Operation of a hair salon | Clear, but future activities need consideration | Add product sales or training if genuinely planned |
You do not need to list every incidental purchase. Renting an office or buying equipment can fall within transactions implied by the business. A substantial change of direction, however, deserves a fresh review of the purpose. Explain necessary technical terms and avoid an accumulation of unexplained abbreviations.
Does registration allow every activity listed?
No. Commercial registration does not replace a licence, professional qualification or sector-specific obligation. For example, certain financial services require FINMA authorisation or another appropriate regulatory status. Including “asset management” in the purpose does not give the company permission to start providing that service.
The same distinction applies to activities requiring a cantonal permit. Prepare two separate lists: what the business plans to do, and what it must obtain before doing it. Do not copy regulated activities from another company’s entry without checking whether that company holds authorisations or has an organisation you do not have.
When checking a company’s registration, distinguish its corporate purpose from its Swiss UID business identification number.
When must the purpose be changed?
Review the registered wording before launching a new activity, acquiring another business or substantially changing the business model. A closely related development may already be covered; an unrelated line of business requires closer examination.
For a Swiss LLC or corporation, a change of purpose involves a decision by the competent shareholders’ meeting, a notarised amendment to the articles and an entry in the commercial register. The applicable legal and statutory majorities must be respected. It is not simply an online correction to a contact detail.
Afterwards, check the information held by the bank, insurers and relevant authorities. If the company name refers to the old activity, consider whether it remains appropriate and non-misleading. A new purpose does not automatically require a new company name.
Your preparation checklist before incorporation
Prepare answers to these five prompts and send them with your proposed purpose:
- Our main source of revenue will be…
- We will sell these products or services to…
- We also plan to develop…
- These activities may require a licence or professional qualification…
- For now, our project does not include…
The final prompt helps remove activities added without a clear reason. Ask the future shareholders to review the description, especially where some will invest without managing the business.
Keep the purpose consistent with the articles and the description supplied to the bank for the capital deposit account. Then plan the share capital and follow the steps for forming a Swiss LLC or setting up a Swiss corporation.
The activities you describe also help you assess which business insurance policies to arrange before trading.
Frequently asked questions
Can a Swiss company have several activities in its purpose?
Yes. Describe them clearly and identify the main activity before adding related activities. A long list of unrelated sectors does not automatically offer better protection and can make the actual business harder to assess.
Must the purpose mention Geneva or Lausanne?
The registered office is addressed separately. You do not need to restrict the purpose to a city simply because the business starts there. Discuss a territorial restriction only if it is relevant to the project.
Can I copy a purpose from Zefix?
Existing entries can help you understand sector terminology. Their registration does not show that the wording fits your business, licences or future transactions. Use them to prepare questions, then have your own clause adapted.
Does every new activity require amended articles?
No. It may already fall within the current purpose. Compare the registered wording with the planned work. If an amendment is needed for an LLC or corporation, follow the corporate decision, notarisation and registration procedure. Check licences and insurance separately.
Sources and further reading
About the author
Romain Prieur
Romain is a Swiss certified accountant, entrepreneur and partner at Karpeo in Geneva. He supports business owners with company formation, accounting and taxation. He is also a co-founder of Entreprendre.ch.
A clear purpose for your Swiss company
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