Make a new (business) plan, Stan

Although you will encounter plenty of people and their products claiming to know the secret recipe that will catapult you straight into the entrepreneurial stratosphere, the fact remains that the success of your small business depends on a variety of factors and PLANNING is one of the key ones.

But the good news is, that despite the fact that there is no magic formula that will warrant your business idea will make you the next Richard Branson, if you prepare well and have tools in place and plan ahead, you’ll be less stressed, can react quicker if you encounter a plot twist on your journey and manage your energy so you can keep moving forward.

So, after you checked that you have the right work permit and found a good business name for your Sole Proprietorship, there is one another thing to check:

Regulated Professions

Practicing certain professions may need a federal, cantonal or communal authorisation. Luckily, there’s a handy online tool for  so-called regulated professions, where you can check if and where you’d have to apply be authorise to practice in your field.

Portal of authorisations and regulated professions in Switzerland

CAVEAT: At this point the online tool for regulated professions seems to only be working in German, French and Italian, despite the fact that the portal IS available in English. If your search yields no result, translate your profession into an official language and do the search again in that language.

What’s next?

In Part One of the Freelance Planning series, we’ll check out the requirements to register with various public authorities and examine the registration process.

First up in today’s blog post:  Commercial Registry requirements and registration process
Later instalments will examine

• Value Added TAX requirements and registration
• Mandatory social insurance registration

Part Two of the Freelance Planning series will shed some light on fundamental preparation work

• Capital needs: Budgeting your launch and first business year
• Market research and threat analysis
• Domicile, infrastructure & overhead costs

Commercial Registry: Requirements & Registration Process

If your Sole Proprietorship business will make less than CHF 100’000 per year, a registration with your local Commercial Registry is not mandatory. Depending on your area of business, registering might benefit your company.

The Pro’s and Con’s of Registering

The Pro’s

• Companies that appear in the commercial registry appear more professional
• Trust bonus: business partners and banks will trust registered companies more. They are more likely to enter into a contractual partnership with a registered company.
• The company name is protected in the canton where the Sole Proprietorship has its domicile

The Con’s

• Accounting has to be done with double-entry method based on the debit and credit principle
• The company owner is subject to bankruptcy with his / her entire personal assets
  

Registration Costs

The registration process is easy and will cost you CHF 120 for the registration with the Commercial Registry (cf official list of registration costs) and CHF 20-40 per legalized signature.

Ordering an official paper extract of the commercial registry will cost between CHF 0- 50 and a copy of the Swiss Official Gazette of Commerce where the entry is published  CHF 50-80, depending on the canton where you register.

A copy of an official extract from the registry comes in handy on many occasions to prove you own a legitimate business. If it is not included in the registration process in your canton, it’s definitely worth ordering one.

Registration Process

If you decide to register with the Commercial Registry, the procedure is simple.

1. Download the respective form (Neueintragung Einzelunternehmung / Inscription Initiale Entreprise Individuelle / Iscrizione Ditta Individuale)  from the website of your cantonal commercial registry.

2. Fill in the registration form in one of the three official Swiss languages (German, French or Italian). To do so you must decide on the following items before hand:

• Company name
• Company seat
• Company domicile
• Company purpose
• Details of owner
• Extra signatories

Company name
Your chosen Sole Proprietorship business name including your last name.

Company Seat
Here you have to state the municipality in which the business is located. For example, if you live in Ebmatingen ZH you will need to list MAUR, as Ebmatingen is not a municipality by itself, but rather belongs to the municipality of Maur.

Company Domicile
In this section you need to specify the complete address of the Sole Proprietorship with street, house number, postal code and town,  where the business is operated and where the company can receive snail mail and official communications. This does not  have to be your home address. It can be an office you rent or a colab space that offers mail service

Company Purpose
A description of your business in brief and general terms that must be neutral. Avoid using special terminology or trade language.

Details of owner
In this section you must enter your first name, family name,  place of residence (municipality) and of place of origin. Foreigners must list their nationality as place of origin.

Extra signatories
You can choose to assign signatory power to other persons to sign on behalf of your company for a variety of transactions (for example, conclude contracts, conduct bank transactions, etc.). Often this includes a spouse or a partner, to ensure the company can still function in case the Sole Proprietor is incapacitated for unexpected reasons. Any extra signatory must list the same personal details as the owner.

All signatures of signatories must be legalized to be entered into the commercial registry (see below step 3).

There are different types of signatory powers:

Sole Signature (Einzelunterschrift / Signature Individuelle / Firma individuale)
The person entitled to sign may represent the business alone and in its entirety.

Joint Signature (Signature by Two)  (Kollektivunterschrift zu zweien / Signature collective à deux / Firma collettiva a due.)
The person entitled to sign can execute all the above-mentioned legal proceedings only with a further signatory.

These two are the most common signatory types. There is an additional type of signatory power:

Sole Signature Rights Power of Procuration (Einzelprokura)
The person is authorized to carry out all kinds of legal actions on behalf of the company. However, restrictions apply regarding to the sale or encumbering of property, which can only be expressly granted by the owner.

Below is the current form from the Cantonal Commercial Registry of Zurich as an example of the registration form (click for larger images).

3. Have the signatures of all signatories of the company legalized in front of a local notary, your communal office or the commercial registry (depending on the canton).

4. File the application with your Cantonal Commercial Registry by mail or dropping it off personally.

The duration of the registration with the commercial registry depends on the size of the canton and how many applications they receive per week. As the paperwork for Sole Proprietorship foundation is very limited, applications are typically processed faster than for a Limited Liability Company or a Limited Corporation and take about 1-2 weeks.

In urgent cases, most Cantonal Registries offer an express service for a fee.

And there you have it, registering your Sole Proprietorship in a nutshell.

Stay tuned for the next week’s peek at whether you’ll need to register for Value Added Tax and if yes, how that is done.

Until then, per aspera ad astra!