Differences between LLC and Corporation: Which legal form is better for you?
The choice between LLC and corporation is one of the most important decisions when setting up a company in Switzerland.
It is not just a question of a formal legal form. It is about capital, liability, investors, growth and public image.
If you clearly understand the differences between GmbH and AG, you can choose your structure strategically and over the long term.
LLC vs. Corporation: The most important differences
Both the limited liability company (LLC) and the joint stock company (Corporation) are legal entities. This means that, in principle, only company assets are liable.
The key differences lie in capital requirements, ownership structure, flexibility, and governance.
Minimum capital
LLC: The minimum capital is CHF 20,000 and must be paid in full.
Corporation: The share capital amounts to CHF 100,000, of which at least CHF 50,000 must be paid up upon incorporation.
If you start with limited capital, the LLC is often the more pragmatic way to start.
Liability
In principle, only company assets are liable for both legal forms. Your private assets remain protected as long as there are no breaches of duty.
As far as liability is concerned, there is therefore little difference between LLC and corporation .
Ownership structure
LLC: The shareholders are publicly visible in the commercial register.
Corporation: Shareholders do not appear in the commercial register. This creates more discretion.
If anonymity or flexible participation models are important to you, the corporation offers advantages.
Transfer of shares
LLC shares: The transfer is more formally regulated and generally requires the approval of the shareholders.
Corporation shares: Shares can be transferred much more easily, which makes the corporation more investor-friendly.
This difference is particularly decisive when it comes to growth and raising capital.
When is a LLC a better fit?
An LLC is particularly suitable if you
- Establishing a classic SME
- Start with manageable capital
- No complex investor structure is planned
- Want a stable and transparent ownership structure
- For many owner-managed companies, the GmbH is a solid and efficient solution.
When does an Corporation make more sense?
An corporation is often the better choice if you
- Would like to grow strongly
- Want to involve investors
- Would like to make investments flexible
- Emphasises a strong public image
- Want to scale up in the long term or expand internationally
The corporation offers more structure for raising capital and growing.
Common mistakes when choosing between LLC and Corporation
Many founders underestimate
- the future demand for investors
- increasing capital requirements
- Governance differences
- public image vis-à-vis banks and business partners
A wrong choice can later lead to complex restructuring.
Decision-making questions for orientation
Before you decide, you should check
- How much capital is realistically available?
- Am I planning external investors?
- How flexible should the ownership structure be?
- What public image do I want to achieve?
- How important is scalability for my business model?
These questions usually lead very clearly to the appropriate legal form.
Conclusion: LLC or Corporation ?
The differences between LLC and corporation lie less in liability than in strategy, capital structure and growth prospects.
The LLC is efficient, transparent and ideal for traditional SMEs.
The corporation is more structured, investor-friendly and designed for scaling.
The right choice is not a formality. It is a strategic decision that shapes your entrepreneurial future.
