Sole proprietorship, Sàrl or SA: what you are really committing

Montants et règles vérifiés au 29 septembre 2026.

The choice of legal form is often made in five minutes, on a single criterion: what costs least at the start. The real criterion lies elsewhere: if something goes wrong, who pays, and with what.

The forgotten question: what your debts can reach

As a sole proprietor, there is no separation between the business and you. An unpaid supplier, a client claiming damages, a commercial lease terminated too late: your business creditors can seize your savings, your car, your share of your home, and bring debt enforcement proceedings against you personally.

In a Sàrl or an SA, the company alone is liable for its debts, with its own assets. You risk your initial investment, not your house.

It is the difference that weighs most, and the one people look at least when choosing.

The four main forms, side by side

A general partnership brings together two or more people. It offers no more protection than a sole proprietorship: each partner is liable for the partnership's debts with their personal assets, once the partnership has been pursued without success.

The risks of a sole proprietorship, in practice

• Your private assets are exposed: all the debts of the business are yours, without limit.
• Once entered in the commercial register, you can be declared personally bankrupt, with all your assets.
• Your spouse may be affected: depending on the matrimonial property regime, household assets may be reached.
• Self-employed status is not automatic: the AHV/AVS office examines it, especially if you work mainly for a single client. If it is refused, your client becomes your employer, with the corresponding contributions.
• No unemployment insurance if the business stops.
• A business that is hard to sell or pass on, since it is one and the same as you.

The sole proprietorship has its advantages: no capital, few formalities, lighter accounting. It suits a modest, diversified consulting activity with no liability risk. As soon as the stakes grow, it costs more than it saves.

When a Sàrl or SA is the right choice

• Your activity makes you liable towards third parties: property management, coordinating contractors, advice, building work.
• You sign significant or long-term contracts (lease, leasing, subcontracting).
• One client accounts for most of your turnover.
• You plan to hire, take on a partner or sell one day.

Between the two, the Sàrl is enough in the vast majority of cases: CHF 20,000 of capital, which remains available to the company once it is registered. The SA is mainly justified by confidentiality of the shareholding, several investors or a planned succession.

Our article Setting up a Sàrl in Geneva sets out the steps and the costs.

What the company does not protect

A Sàrl or an SA limits the risk; it does not remove it. The manager remains personally exposed to:

• the personal guarantees and sureties they sign, often required by banks and landlords;
• the company's unpaid AHV/AVS contributions, for which they can be liable with their own assets;
• management errors, for example continuing to trade while the company is over-indebted.

Up-to-date accounts and social security contributions paid on time are enough to rule out most of these risks.

Do you live outside Switzerland?

This is the case for many cross-border commuters who start a business in Geneva. Two rules matter from the outset:

• a Sàrl or an SA must be represented by at least one person domiciled in Switzerland with signing authority;
• your permit and your social insurance depend on the form chosen: self-employed as a sole proprietor, employee of your own company in a Sàrl or SA.

These points are settled before incorporation, not after. A bad start can be corrected, but it costs more than a good one.