When you start a business in Switzerland, one of your first decisions is which activities it will carry out. The corporate purpose, also known as the company’s objects or purpose clause, describes these activities. For a Swiss LLC (Sàrl/GmbH) or limited company (SA/AG), it appears in the articles of association and the commercial register.
How do you draft a clear clause, cover several activities and leave room for growth? Here are practical explanations and examples you can adapt to your Swiss business.
Defining your corporate purpose: the essentials
- Describe your activity: the products or services you offer and the industry in which you operate.
- Allow for planned developments: keep the wording flexible enough to cover activities you genuinely intend to pursue.
- Check industry requirements: some activities require a licence or professional qualification.
- Plan for future changes: changing the purpose of a Swiss LLC or limited company requires an amendment to its articles and a commercial register entry.
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Corporate purpose: definition and importance
What is a company’s corporate purpose?
A corporate purpose describes the activities a company intends to carry out. It helps members, shareholders and third parties understand its business. In everyday English, a company’s “purpose” can also mean its mission or commercial objectives, such as growing sales. Here, we mean the legal description of its activities, called the but social in French and Zweck in German.
The purpose forms part of the articles of association of a Swiss LLC or limited company. It differs from the registered company name, which identifies the business.
Why does the wording matter?
A clear purpose clause gives the founders a shared framework. It identifies the planned activities, supports the incorporation paperwork and helps explain the business to banks and partners. Appropriate wording also accommodates foreseeable developments without requiring an amendment every time your offering changes.
How to choose and draft your corporate purpose
You probably already have a list of services or products you want to offer. Use that list as your starting point, then specify the fields in which your company will operate.
Describe your main activities
Will you work in hospitality (in French), construction, hairdressing or consulting? State what the company will actually do. For consulting, specify whether you mean business management, IT or communications, for example.
Use clear language
Your purpose clause should be easy to understand. For registration in French-speaking Switzerland, use clear French wording; an English working draft helps you explain your project but should be adapted to the language accepted by the relevant cantonal register. Explain useful technical terms or abbreviations in brackets.
Look at existing purpose clauses
You can look up companies in your industry on Zefix, Switzerland’s central business name index. Existing clauses provide useful drafting examples. Adapt them to your own activities, plans and any licensing requirements.
Can one company have several different activities?
Yes. A purpose clause can cover activities in different fields. For example, a business might offer online retail, hairdressing and cleaning services. Describe each activity clearly and ensure it reflects a genuine business plan.
Also tell your business insurers (in French) about every activity you carry out. The risks and insurance cover required can differ between activities.
The NOGA code and your main activity
The General Classification of Economic Activities (NOGA) classifies businesses and establishments by their main economic activity. It is used in particular in the Federal Statistical Office’s Business and Enterprise Register.
A NOGA code and a corporate purpose serve different functions. The purpose describes the planned activities; NOGA reflects the unit’s main economic activity. Adding a secondary activity to the purpose therefore does not automatically change its classification.
Your insurance providers (in French) may use industry classifications when assessing your business and pricing cover. The important practical point is to declare your actual activities accurately; a code alone does not define all the risks covered by a policy.
When developing a new activity, also review its tax obligations and expected social insurance contributions. These expenses feed into your cost calculations (in French). If you need help reviewing these issues, our accounting team can support you.
Should your purpose be specific or broad?
Describe your field clearly while leaving room for planned developments. Expressions such as “consulting” or “services” need an explanation of the sector concerned.
Take a business selling handmade scented candles. If it also plans to sell decorative objects or furniture, it can use wording that covers those products. This avoids limiting its corporate purpose to a single item in the catalogue.
If you need to join an organisation to obtain industry certification, ask whether the clause must contain specific wording. Have the final draft checked before signing the articles of association.
Corporate purpose examples for different industries
Here are four sample clauses to adapt to your planned services. These English examples explain the meaning; final registration wording should be prepared in the appropriate local language. Activities requiring a licence need a separate check.
Restaurant and hospitality business
The company’s purpose is the operation of food and beverage establishments, including restaurants, cafés and bars. It may also provide catering and meal delivery services and organise culinary events.
Purpose of a holding company
The company’s purpose is the acquisition, holding, management and disposal of interests in other businesses. It may also provide administrative and consulting services to companies in which it holds an interest.
Construction business
The company’s purpose is the provision of construction, renovation and fit-out work. It may also provide construction project management and supply building materials.
Business services company: digital marketing example
The company’s purpose is the provision of digital marketing services, including the creation and management of online advertising campaigns, website development, search engine optimisation and social media management. It may also provide training and digital communications consulting.
Depending on the project, an additional clause can cover related transactions, branches or investments in other businesses. It should remain consistent with the company’s activities.
Changing your company’s corporate purpose
If you already have a Swiss LLC or limited company, you can change its purpose to add activities or move into another field. First reread the existing clause: a new service may already fall within its wording.
As with other changes to your company, formalities apply. Where an amendment is needed, the competent members’ or shareholders’ meeting must approve it with the required majority. The amendment to the articles is recorded in a public deed and entered in the commercial register (in French). Our article on the application to register a company amendment (in French) explains the formalities for different types of changes (in French).
Moving into an entirely different business
A major change of direction may also call for a review of your company name. If it refers to the previous activity, check that it remains accurate and does not mislead third parties.
For example, a company called “XXX Painting & Renovations Sàrl” that now works exclusively in digital marketing should review its registered name. A purpose amendment does not automatically require a name change: it depends on the name and the new activity.
Is your business evolving?
Entreprendre.ch handles purpose amendments, from drafting the updated articles to following up registration. The package costs CHF 490 excluding VAT, including notary fees; commercial register fees are additional.
Watch in French
How do you change a company’s corporate purpose?
Romain Prieur explains what to consider when updating your company’s activities. This video is in French.
Final checklist: a purpose clause that fits your business
Review the draft with your co-founders. You can also consult an expert to check the wording. This final review can uncover a missing activity, an overly narrow clause or an industry requirement.
- A recognisable main activity: readers understand which products or services you offer.
- Planned developments covered: the clause includes the additional activities you intend to pursue.
- Clear vocabulary: technical terms and abbreviations are explained.
- Licensing requirements checked: you understand the conditions for carrying out regulated activities.
- Consistent information: banks and insurers receive an accurate description of your business.
- A reviewed final draft: the text has been checked before the incorporation documents are finalised.
Choosing the purpose is one of the decisions to make before incorporation. You will find the remaining steps in our article on forming a Swiss LLC.
Frequently asked questions about corporate purpose
What do but social and objet social mean?
Both French expressions refer here to the description of a company’s activities. In Switzerland, but is the term commonly used in French-language articles of association and commercial register entries. English equivalents include corporate purpose and company objects.
Where can I find a Swiss company’s purpose?
You can read it in the commercial register (in French). For a Swiss LLC or limited company, it also appears in the articles of association. Existing clauses can help you prepare your own draft.
Does a sole proprietorship need articles of association?
A sole proprietorship does not have articles of association like an LLC or limited company. If you plan to become self-employed in Switzerland, you will describe your activity in the relevant applications. This includes its description in the commercial register if the business is registered.
Can one company carry out several activities?
Yes. The purpose can cover several activities, including different fields. Describe them clearly, check any operating requirements and tell your insurers about the activities actually carried out.
Can the purpose be changed after incorporation?
Yes. For an LLC or limited company, this requires approval by the competent meeting, an amendment to the articles in a public deed and registration in the commercial register. Our purpose amendment service can help you through the process.
What if my actual activities go beyond the registered purpose?
Compare your new activities with the current wording to determine whether an amendment is needed. Also check the relevant licences and insurance cover (in French) before continuing those activities.
Does changing the purpose automatically change the NOGA code?
NOGA classification depends on the unit’s main economic activity. Simply broadening the purpose does not automatically lead to a new classification. If the main activity actually changes, the classification details should be checked.
A corporate purpose tailored to your business
Tell us which activities you intend to carry out. Entreprendre.ch helps you put them into words and form your company. After incorporation, our accounting services provide ongoing support with running your business.
Romain Prieur is a Swiss-qualified accountant and founder of Entreprendre.ch. With more than ten years of experience in auditing and supporting Swiss businesses, he advises entrepreneurs on company formation, accounting and taxation.
