Comparison of a corporation and a limited company
Appreciation
The statistic reveals that the corporation is by far the most popular company structure (Kanton Zug 01.01.1998: 12.353 corporations and 1.172 limited companies). The reasons for this are manifold. It is frequently stated that the corporation with higher capital conveys more creditworthiness and the limited company is not adequate for larger companies due to the limited transferability of the interests.
Advantages of the Limited Company:
- Less capital requirement
- Only two persons for foundation
- Establishment of further duties and responsibilities in the statutes
- No restricted foreigner provisions for the choice of directors. Only one director authorized to sign must have his residence in Switzerland. Directors must not be shareholders of the limited company.
- No appointment of independent auditors is necessary, it may however be voluntarily provided.
The limited company, due to its physically structured company structure (own legal entity) is also suitable for a later conversion into a corporation.