Setting up a sole proprietorship
Working in your own name, as self-employed
A sole proprietorship is not incorporated like a company: you carry out an activity in your own name, and you ask your compensation office to recognise you as self-employed. The decision is the office's, on criteria it applies strictly.
You will come across several names for the same form: raison individuelle, the usual term in French-speaking Switzerland, entreprise individuelle, used in federal texts, and Einzelfirma in German.
On this page
What the compensation office checks
Self-employed status does not follow from your intention or from how you invoice. The office looks at the reality of your situation, and it is essentially seeking to establish whether you work independently or are, in reality, in the position of an employee.
In practice it looks at whether you carry economic risk, whether you are free to organise your own work, whether you use your own means, and above all whether you have several clients. If you work for a single client only, the fund is likely to see it as employment, and self-employed status may be refused.
Do you need to register in the commercial register?
Registration is not always compulsory. It becomes so above a certain annual turnover; below that, it remains possible on a voluntary basis.
Voluntary registration in the commercial register has practical effects
The business name is protected, the business gains credibility with banks and clients, and some procedures become simpler. In return, registration makes you subject to bankruptcy proceedings.
The name follows a rule
A sole proprietorship's business name must contain the owner's family name. Other elements can be added, but the family name cannot be left out.
Your ongoing obligations
Accounts
Below a certain turnover, they can be limited to income, expenditure and assets. Above it, full accounts are required.
Your social security contributions
OASI, DI and LEC are due on your self-employed income. Occupational pension and daily sickness benefits are not compulsory: it is up to you to decide whether to take out cover. A lack of cover can become particularly significant in the event of incapacity for work.
Your tax
The profit is added to your other income in your personal tax return. As a sole proprietorship is not a company, it is not taxed separately from you.
Accounts
When to move to a company
Three signs typically point that way: your personal liability becomes uncomfortable relative to the amounts at stake, your income reaches a level where balancing salary against dividends becomes worthwhile, or you want to take on a partner.
The move is made by transferring the business into a new company, and it is subject to precise tax conditions: if badly handled, it triggers taxation that a well-prepared transfer avoids.
Preparing your self-employed activity
Whether your activity is just starting or already under way, we review your situation. An activity that has already started often requires regularising what has been done in the meantime, preferably on your own initiative rather than the compensation office's.