Before submitting your business formation documents, take time to settle a few decisions: what you sell, how much you can commit, how you will work with your co-founders and which obligations apply to your activity.
This checklist helps you prepare. It brings the important questions forward, so you can approach incorporation with a clear project before filling in forms or signing a lease.
At a glance
- Test demand and your price. Interest in an idea does not yet establish a viable business.
- Compare legal structures based on liability, ownership, costs and how you want the business to operate.
- Separate the legal capital requirement, formation fees and the cash needed to launch.
- Check the name, registered office, permits and your right to work before making major commitments.
- If you have co-founders, agree on workloads, signing authority, decision-making and departures.
- Prepare social insurance registration, accounting and invoicing now, even if some formalities will be completed after incorporation.
1. Test your idea and find your first clients
Describe your offer in one sentence: whom do you help, with what service, to achieve which result and at what price? A simple explanation will help you test it with people who might actually buy.
Ask potential clients about their habits, difficulties and budget. A prototype, demonstration or first assignment can provide concrete information. If you start selling, you must already comply with the obligations and permits that apply to the activity.
A first order is a useful signal, but it does not yet prove profitability or consistent demand. Compare the time spent, the costs and what the client is willing to pay.
- Define your priority customer and the need you address.
- Identify competing solutions and reasons to choose your offer.
- Test a price as well as an idea.
- Record uncertain assumptions and your next test.
2. Choose a suitable legal structure
A sole proprietorship requires no minimum capital, whether or not it is entered in the commercial register. It belongs to one person, who is personally liable for its debts. Eligibility for simplified accounting depends on the legal conditions.
An LLC (Sàrl/GmbH) requires at least CHF 20,000 in fully paid-up capital. It can have one or several members and has assets separate from those of its owners. Personal guarantees and liability arising from management duties still need to be considered.
A limited company (SA/AG) requires at least CHF 100,000 in share capital, with at least 20% of each share paid up and at least CHF 50,000 paid up in total. It may suit certain financing or business transfer plans, but its image alone should not drive the choice.
Read our comparison of Swiss legal structures before deciding. A tax comparison should consider salary, profit, dividends, social contributions and the canton. The partial taxation rate for dividends under direct federal tax does not, on its own, describe all cantonal taxes.
- Decide who will own the business and who will work in it.
- Compare liability and annual running costs as well as formation costs.
- Clarify the founder’s social insurance status.
- Check residence and work rights where your circumstances require it.
3. Finance the launch
The legal capital requirement is not your complete start-up budget. A service business without premises and a fully equipped workshop have different expenses. List purchases, formation fees, fixed costs and the gap between invoicing and payment.
Allow for your own income too. A business can be close to breaking even without yet providing enough for its founder to live on. Build at least one less favourable scenario: slower sales, a late-paying client or an unexpected purchase.
If you contribute assets to the capital, check the conditions for contributions in kind. If you borrow, calculate repayments while allowing realistic remuneration for the founder’s work.
- Obtain quotations for major expenses.
- Separate formation fees, capital and operating needs.
- Include taxes and social contributions in cash outflows.
- Decide the maximum amount you are prepared to lose.
- Document family loans and advances from co-founders.
4. Prepare your formation documents
Search for your proposed name in Zefix and similar trade marks in Swissreg. An exact-match search will not identify every risk of confusion: also examine similar names and the activities concerned. Reserving a domain name does not protect a trade mark. Our article on choosing a Swiss company name explains what to check.
Choose the municipality of the registered office and a valid address. For business premises, check permitted use, the lease and any work required. A domiciliation address does not replace an operating permit or a physical presence where the activity requires one.
For an LLC or SA, prepare the purpose, capital, governing bodies and articles of association for the notarised deed of incorporation. Our article on forming a Swiss LLC covers the required documents. A sole proprietorship does not follow the same incorporation procedure.
An LLC or SA must be represented in accordance with the law by a person resident in Switzerland: a managing officer or director for an LLC, and a board member or director for an SA (Art. 814 para. 3 CO (in French) and Art. 718 para. 4 CO (in French)). This residence requirement does not replace an assessment of the founder’s right to work.
- Check the name, similar trade marks and your preferred domain.
- Choose the registered office and document the address.
- Confirm the permits required for your services and premises.
- Prepare identity documents and details of the people involved.
- Define a purpose consistent with the planned activity.
5. Agree the rules with your co-founders
Who contributes money? Who works in the business, for how many hours and at what pay? Who can sign a contract? What happens if someone leaves, becomes ill or wants to sell their stake?
These discussions can feel awkward between friends or former colleagues. They become much harder once the business has made commitments. A members’ or shareholders’ agreement, coordinated with the articles of association, can address many of these questions. It is not a legal requirement for every business.
A 50/50 ownership split requires a plan for deadlock. Giving someone 51% does not automatically resolve every disagreement: some decisions require other majorities or may be subject to specific rights.
Signing authority must also be distinguished from internal rules. A spending limit agreed between co-founders may not be enforceable against a third party acting in good faith.
- Set roles, working time and remuneration.
- Define signing authority and decisions to be made jointly.
- Agree a procedure for resolving disagreements.
- Plan departures and how ownership interests will be valued.
- Clarify ownership of creative work and tools contributed to the business.
6. Organise administration
Identify the AHV compensation office, insurance cover and accounting arrangements appropriate to your status. AHV, known as AVS in French, is Switzerland’s old-age and survivors’ insurance. For a sole proprietorship, prepare the evidence needed for your AHV application for self-employed status. Assess VAT liability based on your supplies and forecasts. The general CHF 100,000 threshold does not mean you should wait a full year before considering it.
Prepare a suitable bank account, reliable invoicing, a system for filing supporting documents and a professional contact address. Assign responsibility for deadlines. If an accounting firm is involved, agree what you will send it and how often.
Digital tools for entrepreneurs (in French) can simplify the work, provided the setup matches your needs. You do not need to automate everything before your first sale.
- Identify social insurance registrations and cover to activate.
- Assess VAT liability.
- Prepare quotation and invoice templates.
- Organise supporting documents, access rights and backups.
- Choose a launch date compatible with the required permits.
Once these points are settled and the business is formed, use our checklist of ten actions after incorporation. It covers getting the business operational and managing your first deadlines.
What to settle before you commit
Not every unchecked box has the same consequences. A logo can evolve after your first client; a missing permit or insufficient funding can prevent the business from opening. Rank the outstanding points by their effect on your timetable.
| Decision | Useful evidence before committing |
|---|---|
| There are potential customers | Targeted conversations, accepted quotations or a documented sales test |
| The launch can be financed | A budget of funding needs and sources, followed by monthly cash flow |
| The activity is permitted | Conditions confirmed by the competent authority, with decisions obtained where required |
| The premises are suitable | Permitted use checked, works costed and a lease compatible with the project |
| The co-founders agree | Roles, contributions, remuneration, decisions and departures discussed in writing |
| You are entitled to carry out the activity | Employment contract, residence status and applicable professional rules checked |
Example: forming an LLC does not fully fund the launch
In this illustrative example, two co-founders put together CHF 20,000 in LLC capital. They plan CHF 12,000 of equipment purchases and CHF 6,000 of launch expenses. After these payments, only CHF 2,000 would remain, before any additional funding, for rent, insurance and the months when client receipts are low.
That balance alone does not establish that the project can be financed. Suppose operating payments total CHF 4,000 per month, including all outflows assumed in this example. Here is how a delay in receipts affects the first two months, without new funding:
| Cash flow in CHF | Month 1 planned | Month 2 planned | Month 1 delayed | Month 2 delayed |
|---|---|---|---|---|
| Opening cash | 2,000 | 1,000 | 2,000 | −2,000 |
| Receipts | 3,000 | 6,000 | 0 | 3,000 |
| Payments | −4,000 | −4,000 | −4,000 | −4,000 |
| Closing balance | 1,000 | 3,000 | −2,000 | −3,000 |
The delayed scenario shows an additional funding need of at least CHF 3,000 by the end of month two, before any safety margin. Payment dates within each month also need checking. A negative balance represents funding to find; it does not mean an overdraft is already available.
Before signing, the co-founders can postpone a purchase, reduce initial expenses or confirm an additional source of funds. Their cash flow budget must then use their actual figures, including remuneration, social contributions and taxes.
Test a less favourable start too
Rework the budget with a delayed opening, slower sales and a major client paying late. Identify the first month when cash becomes negative. You will then know how much funding is needed or which expense to adjust.
Finally, set a decision point: which evidence must be in place before signing the lease, ordering equipment or moving to full-time work in the business? This makes preparation concrete without requiring perfect knowledge of the future.
Knowing when to launch
The checklist makes risks visible and next steps clear. You do not need to predict everything, but you should understand how to earn your first revenue, meet commitments and finance payment delays. Incorporation can then rest on a prepared project, with a structure suited to how the business will actually operate.
Frequently asked questions
Is a business plan compulsory?
It is not a legally required document for every business formation. A lender or certain administrative procedures may require one. Even a simple plan helps you test demand, costs and cash flow.
Can one person form an LLC?
Yes. One person can be the sole member and managing officer, provided the representation and residence requirements are met. The company has its own obligations even when there is only one founder.
Do I need a notary?
Yes, to incorporate an LLC or SA. Setting up a sole proprietorship does not require a notarised deed of incorporation.
How much should I budget for formation?
Request a quotation for your chosen legal structure and circumstances, then add excluded fees and operating needs. Our article on Swiss LLC formation costs explains the main expense categories.
Sources and references
A question about your business?
Review your situation and the next steps with Entreprendre.ch.
Romain Prieur is a Swiss certified public accountant and the founder of Entreprendre.ch. With more than ten years of experience in auditing and supporting businesses in Switzerland, he advises entrepreneurs on company formation, accounting and taxation.
