How to Establish a PLC: A Step-by-Step Guide

Whether the legal form of a PLC is right for you is a very individual question. Below, we list some advantages and disadvantages that can help in your considerations.

One of the main advantages of this legal form is certainly the limited liability and the associated risk reduction. You are therefore not liable with your personal assets, but solely with the share capital. Another advantage lies in the potential anonymity of the shareholders. This option particularly appeals to international investors. Furthermore, the founders of a PLC can keep more details about their finances and ownership confidential compared to other legal forms. Only PLCs listed on the stock exchange are required to publish their annual financial statements.

The disadvantages of a PLC are the relatively high establishment costs and the high share capital. Additionally, there is double taxation, as both the PLC and the shareholder are taxed.

Requirements for Establishing a PLC

To establish a PLC, the minimum share capital must be CHF 100,000. Of this amount, at least half must be fully paid up. If the value of the existing share capital is higher, at least 20% must be paid in, but not less than CHF 50,000. The shares can be divided into bearer or registered shares.

A PLC can only be founded by a natural or legal person who is resident in Switzerland. If additional shareholders join over time, no separately certified authentication is required.

Legal Basis

The legal basis for a PLC is the Swiss Code of Obligations (Art. 620-763 CO).

Establishment Costs

In addition to the costs for the notary, which can vary greatly, fees for registration in the commercial register are also incurred. These also vary but can be estimated at around CHF 600 for a capital of CHF 100,000.

If you entrust the entire document preparation to a professional (lawyer, trustee, or bank), you should expect to pay around CHF 2,000 to CHF 5,000. Even if you take care of everything yourself, you should still have the registration reviewed by the commercial register office. In terms of cost, this amounts to approximately CHF 200 to CHF 300. If you are particularly pressed for time, the task force pre-examination will cost around CHF 350 per hour.

Procedure for Establishment

Below, we explain some important points for establishing a PLC.

Selection of the Company Name

With the company name, you can generally let your creativity run wild. Even fantasy names are allowed. Of course, all legal principles must be observed.

All company names must always end with the designation "AG" (PLC in German). They must also ensure that the name does not already exist in Switzerland and is not registered in the commercial register. This can be checked through the central company index of the Registries of Commerce of Switzerland (www.zefix.ch). If the designation is intended to include a geographical, national, or territorial designation, caution is advised. This includes names of existing locations or mountains and designations such as "Worldwide" or "Swiss." The name must not mislead or be confusing about the company's activities. Clarify this in case of doubt with the commercial register office beforehand.

Furthermore, the name must not sound too similar to already existing trademarks or company names. The Swiss Federal Institute of Intellectual Property (IPI) is the first point of contact for trademark questions. The electronic database for Swiss entrepreneurs can be accessed via www.swissreg.ch. For foreign founders, the counterpart is the World Intellectual Property Organization (WIPO), which can be accessed at www.wipo.int. Please note that comprehensive consultations by the institutes may be subject to fees. In case of doubt, however, it is better to be on the safe side.

Establishment of Corporate Bodies

A PLC requires a clear structure and clear positions for the shareholders. Therefore, it is necessary to appoint a board of directors and an authorized person for management. These are usually also authorized to sign.

Choice of Bank

A PLC requires a blocked account and a business account. Choosing the right bank is significant and should be discussed extensively among the shareholders in advance.

Selection of the Auditing Firm

If it is a PLC subject to auditing, you must also select an auditing firm. A PLC in Switzerland can make use of the so-called "Opting Out" if it employs no more than 10 full-time positions per year. In this case, you do not need to select an auditing firm.

Determination of Share Capital or Contribution in Kind

A PLC can be founded in two different ways: either through a cash payment of the capital or through a contribution in kind. The cash payment must be deposited into the blocked account at this stage. Subsequently, the shareholder receives the necessary certificate.

Those opting for a contribution in kind (qualified establishment) have it slightly more complicated. Then, the party and the PLC must first conclude a contribution in kind agreement.

Entry in the Commercial Register and Documents to be Submitted

This is the most important step. After registration in the commercial register, your PLC is officially established.

After your PLC has been registered and thus established, you are obliged to submit the following documents to the commercial register office.

• Commercial register application
• Public deed
• Articles of association
• Declaration I (Stampa), II (Lex-Friedrich)
• If the obligation to audit is waived: Declaration of waiver of an audit (It must be drawn up and submitted by the top management or administrative body.)

Checklist: How to Establish a PLC

Below, we have compiled a checklist for you. This provides an overview of the steps before and after establishing a PLC.

• Internal Decision Making
• Clarification of all legal and insurance-related questions and compatibilities
• Development of a business plan and cost budgeting
• Selection of the company name (if necessary, clarification with the commercial register office) and determination of the domain
• If necessary, securing the name/logo through the Swiss Federal Institute of Intellectual Property (IPI)
• Determination of share capital or contribution in kind
• Determination of corporate bodies and responsibilities
• Registration with the commercial register office (only then is your PLC officially established)
• Payment of the share capital into the blocked account
• Preparation of founding documents
• Pre-examination of these by a notary and the commercial register office
• Drafting of the articles of association
• Drafting of the deed of incorporation and, if necessary, other required documents
• In case of auditing requirement: Request for acceptance by the auditing firm
• Convening of the founding meeting
• Release of the share capital payment amount at the bank (do not forget the commercial register excerpt)
• Issuance of share certificates and proof documents, opening of the share register
• Compliance with bookkeeping obligations
• Conclusion of mandatory insurances for pension fund (OP) and accident insurance (OAI and NOAI)
• Application for the VAT number (Federal Tax Administration)
• Conclusion of further insurances (liability insurance, property insurances, etc.)
• Registration with the Swiss Compensation Office (SVA Zurich)
• Registration of employees with the Old-Age and Survivors' Insurance Compensation Fund (OASI) - Attention, even you as the founder are legally considered an employee

Legal advice from a lawyer specializing in corporate law

If you have sufficient financial means, establishing a PLC is a good choice for you. However, keeping an overview of the necessary legal steps is not easy. Therefore, it can be invaluable to have a good expert by your side from the beginning.

A lawyer specializing in corporate law will support you along this comprehensive path and reveal where pitfalls may lie. GetYourLawyer is happy to assist you in finding a suitable specialist. Once you have described your concerns, you will receive up to three offers from suitable attorneys.