Sàrl or SA in Switzerland: LLC vs corporation explained

Swiss LLC vs SA: comparison table

A Swiss LLC is not a US LLC, and an SA does not have to be publicly listed. Both have legal personality. An LLC can be a substantial business, while an SA may have just one shareholder. Business size alone does not determine the right choice.

If you are still considering self-employment or a partnership, start with our comparison of Swiss business structures.

Capital: what do you need to contribute?

An LLC requires CHF 20,000, fully contributed at incorporation. SA founders subscribe at least CHF 100,000. Paid-up capital must reach both 20% of every share’s nominal value and CHF 50,000 in total.

Unpaid SA capital remains due. Incorporating with CHF 50,000 paid into a CHF 100,000 company does not permanently reduce the shareholders’ obligation to CHF 50,000.

For example, two founders with CHF 35,000 available may be able to establish an LLC with CHF 20,000 capital, provided they can also cover fees and working capital. That cash amount alone does not meet an SA’s minimum paid-up requirement. Conversely, having CHF 150,000 does not mean an SA is compulsory: an LLC can also receive substantial funding.

Share capital funds the company; it is not a fee paid to the notary. After incorporation and the bank’s release procedure, it can be used for legitimate business activities. Assess incorporation expenses and the operating budget separately.

Does liability differ between an LLC and an SA?

In both structures, company assets generally answer for company debts. The company’s liability is not capped at the CHF 20,000 or CHF 100,000 registered as capital.

Separate legal personality does not remove every private obligation. A founder may remain liable under a personal guarantee, for unpaid subscribed capital or for a breach of their duties as a manager or director.

An LLC’s articles can also impose additional contribution or ancillary performance obligations within the statutory limits. Read these provisions before subscribing for or buying membership interests.

Your risk assessment should cover the articles, guarantees and responsibilities actually undertaken. Choosing an SA does not shield a director who culpably breaches their duties.

Ownership disclosure and transferring shares

In an LLC, members and their holdings are entered in the Commercial Register. A transfer of membership interests requires a written agreement and generally approval by the members’ meeting, subject to permitted provisions in the articles. Changes requiring publication must be reported.

In an SA, shareholders are generally absent as such from the public extract. Board members and authorised signatories are listed. Someone may therefore be publicly visible as a director without their shareholding being disclosed there.

Public privacy is not anonymity. Company registers, bank checks and beneficial ownership identification requirements still apply. Founders or owners may also be identifiable through documents accessible to entitled persons.

The new Swiss legislation on transparency of legal entities is scheduled to enter into force on 1 October 2026. It introduces a federal beneficial ownership register and reporting obligations, with transitional deadlines starting on that date. Review the applicable requirements when forming or administering the company. Federal announcement of 12 June 2026 (French).

SA shares often provide a convenient framework for investment and exits, but transfers are not always unrestricted. Statutory, contractual and legal restrictions can apply. In either form, a shareholders’ or members’ agreement can address pre-emption rights, exits and deadlocks.

Day-to-day management and administration

An LLC is run by managers. The default legal framework involves members in management, but the articles can organise this differently. Professional management is possible; every member does not have to work in the business daily.

An SA has a board of at least one director. Operational management can be delegated within the legal framework. A director may also run the business actively: a board need not be remote from daily operations.

Both forms must be capable of valid representation by a person resident in Switzerland: a manager or director for an LLC, or a board member or director for an SA. The signing arrangements must make the required representation effective.

Both require full accounts and annual financial statements. Audit requirements depend on the statutory conditions. An opting-out from the limited audit may be possible where the conditions are met; it does not remove accounting obligations. See our Swiss company accounting services.

Is an SA more tax-efficient than an LLC?

Not simply because it is an SA. Both are taxed as legal entities. The canton, municipality, taxable profit and relevant rules determine the company’s taxes.

Individual owners are separately taxed on their income, including salaries and dividends, and on their wealth according to their circumstances. Distributions can create economic double taxation, with relief mechanisms where their conditions are met.

Remuneration must reflect actual work and circumstances. Replacing salary with dividends is not a freely available way to eliminate social insurance contributions. Tax and social insurance treatment must be consistent.

Compare the same operating profit and personal cash needs, then include bookkeeping, payroll, pension arrangements and recurring costs. Otherwise, an apparent advantage may come from different assumptions rather than the legal form.

VAT follows the activity and liability rules, not a special SA advantage. Our VAT services cover both structures.

Which structure fits your project?

You are starting a services business with active co-founders

An LLC may offer an appropriate structure with a more accessible minimum capital and a focus on members. Agree on roles, significant decisions and exits. Lower initial capital does not replace a good founders’ agreement.

You expect investors and repeated changes in share capital

Consider the SA carefully. Its shares often make investment arrangements easier to structure. This does not guarantee investors or a successful funding round. The business case and investment terms remain essential.

You are a solo founder concerned about image

Both forms allow one owner. Find out what your customers and funders actually require. An SA does not guarantee financial strength, and an LLC is not automatically a barrier to growth.

Before deciding, write down four answers: how much capital can you contribute, who will own the business, who will manage it, and how is ownership likely to change?

Can you convert an LLC into an SA later?

Yes, subject to the legal conditions. Conversion requires preparation covering capital, documents, accounts and tax implications, with the professionals involved.

Do not assume a later conversion will be immediate or cost-free. If an equity investment is expected soon, compare forming an SA now with forming an LLC and converting later.

Equally, there is no need to establish an SA solely for a hypothetical funding round. Balance present needs and a plausible future. When ready, explore LLC formation or SA formation with Karpeo.

Related practical guides

For the next steps, review capital requirements and use of funds, opening a capital deposit account and the articles of association checklist.

Frequently asked questions