• One owner
• Unincorporated
• Personal income tax on profits
• Unlimited liability
• No capital requirement

Often referred to as a sole trader, a sole proprietorship is an unincorporated business with just one owner who pays personal income tax on profits earned. Any debts or losses incurred cannot be shared with other individuals. It is the cheapest and easiest business structure to establish, with the individual legally responsible for all aspects of the business. There is no dedicated capital requirement.

Simplest and most cost-effective structure, but comes with full personal liability for business debts.

• Two or more owners
• Shared responsibilities and liabilities
• Unlimited liability

A general partnership is a business arrangement whereby two or more individuals agree to share responsibilities, assets, profits, financial and legal liabilities of a jointly owned business, granting unlimited liability.

Allows for shared management and resources, but all partners are fully liable for business debts.

• Own legal entity
• Limited liability for partners
• Minimum capital: CHF 20,000
• At least one shareholder and one executive director

A GmbH is a company with its own legal entity formed by at least one or more individuals or companies with a predetermined capital (nominal capital). Each partner participates by paying in an initial share of the capital. The partner's liability is limited to the predetermined nominal capital. Minimum capital of CHF 20,000 is required and there must be at least one shareholder and one executive director who may be the same person; at least one executive director must have his domicile in Switzerland.

Offers limited liability protection with lower capital requirements compared to AG. Suitable for small to medium-sized businesses.

• Own legal entity
• Limited liability for shareholders
• Minimum capital: CHF 100,000
• At least one shareholder and one board member

An AG is a corporation with a legal entity whose liabilities are covered exclusively by its own assets. The base capital, determined in advance, is divided into shares. Minimum capital requirement of CHF 100,000 with at least one shareholder and one member of the board of directors who may be the same person; at least one shareholder with authorisation to sign must reside in Switzerland.

Suitable for larger businesses or those planning to go public. Offers the highest level of credibility but requires more capital and formalities.

• Zefix
• Federal Statistics Office

Corporate information is available at Zefix: www.zefix.ch

Company identification can be executed via the Federal Statistics Office: www.bfs.admin.ch

Use Zefix for comprehensive corporate information and the Federal Statistics Office for company identification.

• Zefix
• Private reporting agencies

You can obtain information on the financial state of affairs for companies and industry at Zefix. There are also numerous private reporting agencies offering credit checks.

Combine Zefix data with reports from private agencies for comprehensive financial information.

• Credit reports
• Online services

Normally you find this information in a credit report. Credit reports are offered as a service online.

Utilize online credit report services to check for existing judgments against businesses.

• Contracts
• Invoices
• Statement of account
• Complete contractual documentation
• Proof of conversations

As a minimum you will need:

• Copies of the contracts;
• Copies of the invoices;
• A clear statement of account indicating the payments and credit notes that have been booked regarding the outstanding invoices.

In the case of a regular lawsuit procedure, copies of the complete contractual documentation should be available, starting with contracts, orders, order confirmations, delivery notes, and invoices. Every part of the trading relationship should be provable by documentation.

In case of dispute, proof of the conversations between you and your debtor should also be kept and provided to the lawyers. In the case of oral negotiations, you will need the visit or negotiation reports and the names of the witnesses.

Maintain comprehensive documentation for all business transactions to ensure legal enforceability. Keep records of all communications, including oral negotiations.

• Generally allowed under Swiss law
• Operates as reservation of seller's right to avoid contract

Retention of title clauses are generally allowed under Swiss law however, according to the Swiss Supreme Court, such clauses continue to operate as a reservation of the seller's right to avoid the contract, if the buyer is late in payment and has already received the goods while it was obliged to pay before receipt of the goods (Article 214(3), Swiss Code Of Obligations (SCO)).

Consider including retention of title clauses in contracts, but be aware of their specific interpretation under Swiss law.

• Mandatory warning notice
• Specific content requirements
• Two-week notice period

A warning notice to the debtor is mandatory before filing any enforcement claims. The warning notice should include:

• Creditor name and overview of the claim
• The total amount of the claim, including penalties (interest)
• Payment method required
• A warning that the claim will be enforced through the enforcement authority in case the claim is not settled by the required date
• Information on how to dispute the claim

If this measure has been taken and the payment still has not been made after the two-week notice period (according to the law), the creditor may file for enforcement.

Always send a comprehensive warning notice before initiating legal proceedings. Ensure all required information is included and allow for the two-week notice period.

• Interest is negotiated between parties
• Standard legal interest rate: 5%
• Debt collection costs applicable to debtor

Interest is a negotiated cost between debtor and seller. Interest charges should be included within signed contracts, otherwise the standard legal interest rate of 5% is applied.

Similarly, any debt collection costs are also applicable to the debtor and are calculated by the Swiss Debt Collection Union.

Include interest rates in contracts to avoid defaulting to the standard 5% rate. Be aware that debt collection costs can be charged to the debtor.

• 10 years from the date on which a debt falls due
• 5 years for quick settlement cases

Quick Settlement Cases (5 years):

• Claims on rent, interest or other periodic payments
• Claims by tradesmen, craftsmen and for medical treatment
• Claims relating to sale of foodstuffs and accommodation payments
• Claims relating to work of legal counsel and notaries
• Claims from employees

Limitation periods are a matter of substantive civil law, most of which are found in the Code of Obligations (CO).

Be aware of the different limitation periods for various types of claims. Act within the appropriate timeframe to preserve your right to legal action.

• Licensed, neutral third party aids settlement
• Mediator has no decision-making powers
• Court can confirm settlement on joint application

Consider ADR methods as potentially faster, cheaper, and more private alternatives to court proceedings. Be aware of the option to use mediation in place of mandatory conciliation hearings.

• Parties submit dispute for settlement if stated in contracts
• Parties must agree on dispute settlement
• Arbitration court judgment granted enforcement clause

• Pre-legal actions required
• Collections authority involvement
• Regular lawsuit option

Pre-legal actions must be executed before entering into legal proceedings. The collections authority, called "Office des Poursuites" or "Betreibungsamt" notifies the debtor of a summons ("Zahlungsbefehl") to pay the debt within 20 days or to appeal ("Rechtsvorschlag") within 10 days.

In the absence of payment or appeal, the creditor can request the debt collections office to attach the debtor's assets, or a bankruptcy petition can be filed. The costs of this part of the legal proceedings cannot be charged to the debtor.

A regular lawsuit is initiated either after the debtor opposes the summons, or in complex cases. In this situation, a summons is served on the debtor and a conciliation hearing is scheduled. The parties may then exchange written submissions to court on which a judgement is based and notified to the parties in a further hearing.

Understand the two-step process: pre-legal actions through the collections authority, followed by potential regular lawsuit. Be prepared for different timelines and procedures based on the debtor's response.

• Unopposed cases: 4-6 months
• Execution: Additional 6+ months
• Ordinary proceedings: 1-3+ years

In a case where no opposition is provided, cases may take between four to six months. Execution on these cases could take a further six months or more.

Ordinary proceedings can last from one to three years or even longer, subject to the case.

Be prepared for potentially lengthy legal processes, especially for contested cases or during the execution phase.

• Lawyers' fees: Hourly rates
• Court costs: 5-10% of claim value
• Losing party typically bears costs

In Switzerland, lawyers' fees are charged hourly and are subject to the seniority of the individual handling the case.

Court costs are often representative of around 5-10% of the claim value depending on the case.

In the event where the debtor loses their defence, the costs of the case are charged to the debtor. The exception is the lawyer's fees which would be charged at the decision of the judge.

Consider potential costs when deciding to pursue legal action. Be prepared for high lawyer fees, but understand that a significant portion of costs may be recoverable if successful.

• Set aside opposition
• Attachment of goods
• Bankruptcy proceedings
• Performance-related judgments

The creditor party may begin enforcement proceedings through a request to the court to set aside any opposition the defendant raised against the payment summons. In doing so, they order the continuation of enforcement through the attachment of goods (for natural persons) or bankruptcy proceedings (for individuals).

Performance related judgements are enforced under the Code on Civil Procedure and must also be requested in summary proceedings with the enforcement court at the place of residency or registered address of the company.

Be aware of different enforcement options based on the type of debtor and judgment. Follow the appropriate procedures for setting aside opposition and continuing enforcement.

Insolvency proceedings aim to settle the debts of creditors equally through:

• Liquidation of the assets of the debtor company
• Collection of any income of bankrupt sole traders

Understand the insolvency process, including:

• The importance of timely proof of debt lodging
• The role of the preliminary liquidator and trustee
• The 30-day deadline for lodging proof of debt
• The possibility of receiving a certificate of loss for invalid claims

1. Insolvency filing
2. Preliminary liquidator appointed to check asset sufficiency
3. If assets are sufficient, insolvency proceedings begin
4. Trustee appointed (usually the preliminary liquidator)

• Lodge proof of debt with Bankruptcy Office ("Konkursamt")
• Deadline: Usually 30 days from bankruptcy declaration
• Trustee oversees claims
• Invalid claims rejected; creditors receive certificate of loss ("Verlustschein")

• Debtor can request moratorium and composition ("Sursis concordataire" or "Nachlaßstundung")
• Judge examines restructuring plan, financial accounts, trading account, and bookkeeping affairs
• Trustee appointed to control activities and track inventory
• Initial 6-month moratorium, extendable up to 2 years

Be aware of the moratorium option and its implications:

• Possibility of restructuring
• Extended timeline (up to 2 years)
• Creditor voting on repayment composition
• Potential for limited payout (around 25% of debt value)

• Creditors must lodge claims for trustee review
• Trustee proposes repayment composition
• Approval requires:
  • 2/3 of claim value, OR
  • 1/4 of creditors representing 3/4 of claim value
• Court ratifies accepted proposal

• Duration: 1-5 years for insolvency proceedings
• Moratorium payout: Usually around 25% of debt value

The duration of insolvency proceedings can vary significantly, lasting from 1 to 5 years depending on the complexity of the case and the chosen procedure.

In moratorium cases, creditors should expect limited payouts, typically around 25% of the original debt value.

Prepare for potentially lengthy proceedings and limited recoveries, especially in moratorium cases.