Accounting for a GmbH: capital, reserves, dividends and audit

The GmbH (Sàrl in French-speaking Switzerland) is the favourite legal form of Swiss SMEs: affordable starting capital, and liability limited to the company's own assets. In return, it keeps full accounts and follows precise rules on its capital, its reserves and its distributions. This guide covers what is specific to the GmbH.

Full accounting, from the very first franc

Like every legal entity, a GmbH keeps full commercial accounts — in practice, double-entry bookkeeping — and prepares annual financial statements every year: balance sheet, income statement and notes (Art. 957 para. 1, 958 ff. CO). There is no threshold below which simplified accounts would be enough. Large companies, which are subject to an ordinary audit, also prepare a cash flow statement and a management report (Art. 961 CO).

The annual report is prepared and submitted to the partners' meeting within six months of the financial year-end (Art. 958 para. 3 CO). Books and supporting documents must be kept for ten years (Art. 958f CO).

Share capital and equity

• Minimum share capital: CHF 20,000, fully paid in at incorporation (Art. 773 and 777c CO). Each capital contribution has a nominal value greater than zero (Art. 774 CO); since 2023, the capital may also be denominated in an approved foreign currency (Art. 773 para. 2 CO).
• The balance sheet presents equity in the order set by law: share capital, statutory capital reserve, statutory retained earnings, voluntary reserves, profit or loss carried forward, and own capital contributions as a deduction (Art. 959a para. 2 CO).
• Statutory retained earnings (the legal reserve from profit): 5% of the annual profit, after offsetting any losses carried forward, until it reaches, together with the statutory capital reserve, half of the share capital — 20% for a holding company (Art. 672 CO, applicable via Art. 801).
• Own capital contributions: a GmbH may hold its own capital contributions up to 10% of its share capital, provided it has freely disposable equity — temporarily up to 35% when a partner leaves or is excluded (Art. 783 CO). They are shown as a deduction from equity.

Distributions to partners

Dividends may only be paid out of the balance sheet profit and out of reserves created for that purpose, after the allocations to the statutory reserves (Art. 675 CO, applied via Art. 798). The partners' meeting approves the accounts and resolves on the distribution (Art. 804 CO); if the GmbH is subject to audit, the audit report must be available before the resolution (Art. 731 CO). Since 2023, an interim dividend is possible on the basis of interim accounts, which in principle are audited (Art. 675a CO, applied via Art. 798).

A dividend is subject to 35% withholding tax, which the company withholds, declares and pays to the FTA (Federal Tax Administration); the partner recovers it depending on their situation. Repayments of capital contribution reserves — contributions made by the partners, booked to a separate account and reported to the FTA — are exempt from it, under certain conditions (Art. 5 para. 1bis WHTA).

Partner current account. Advances between the GmbH and its partners go through a current account. Interest must stay within the rates the FTA publishes each year; outside them, the tax authorities may treat it as a hidden profit distribution.

Audit: limited audit or opting out

• Ordinary audit if, in two consecutive financial years, two of the following three thresholds are exceeded: a balance sheet total of CHF 20 million, turnover of CHF 40 million, 250 full-time positions on an annual average (Art. 727 CO, applied via Art. 818).
• Limited audit in all other cases (Art. 727a CO).
• Opting out: possible with the consent of all partners, if the company has no more than 10 full-time positions on an annual average. Since 1 January 2025, an opt-out only applies to future financial years, and its entry in the commercial register must be applied for before the start of the financial year concerned (Art. 727a paras. 2 and 2bis CO).

Capital loss and over-indebtedness

The managing directors monitor the company's solvency and act without delay if it is at risk (Art. 725 CO). Capital loss: when the last annual financial statements show that the assets, after deducting liabilities, no longer cover half of the share capital and of the non-repayable statutory reserves, the managing directors take restructuring measures; a GmbH that has opted out of the audit must then have its financial statements audited by a licensed auditor before they are approved (Art. 725a CO). Over-indebtedness: where there is serious concern, interim accounts are drawn up at going-concern values and at liquidation values; if the liabilities are no longer covered, the court must be notified, unless creditors subordinate their claims or a restructuring is possible within 90 days (Art. 725b CO). These rules apply to the GmbH through Art. 820 CO.

VAT and taxes

A GmbH becomes liable for VAT once its taxable turnover reaches CHF 100,000 a year. It is taxed on its profit and on its capital: direct federal tax is levied at 8.5% of net profit (Art. 68 DFTA) — since the tax is itself deductible, the effective federal burden is around 7.8% of pre-tax profit. Cantonal and communal taxes on profit and capital come on top and vary from one canton to another; there is no federal capital tax.

How BeMyTalent adapts

When you activate accounting, you choose the legal form Limited liability company (Sàrl / GmbH). The chart of accounts then puts equity in the right place: 2800 Capital social (share capital), 2870 Propres parts sociales (own capital contributions), the statutory and voluntary reserves, 2260 Dividendes dus (dividends payable) and 2210 Impôt anticipé dû (withholding tax payable) to book a distribution, and a partner current account; the private accounts of a sole proprietorship are hidden.

Your supplier invoices are read and proposed as entries, your payments reconciled, your VAT prepared and your payroll calculated — from AHV/AVS contributions to the salary certificate. The year-end closing carries the result into equity; the balance sheet and income statement are ready for the partners' meeting and for your fiduciary.

BeMyTalent does not replace your fiduciary: it takes the data entry off their hands. You keep the final say on every entry.

Other legal forms: AG (SA), simple partnership, association, foundation. For payroll: the guide to Swiss payroll software.

FAQ

Can a GmbH keep simplified accounts?

No. Like every legal entity, a GmbH keeps full commercial accounts and prepares a balance sheet, income statement and notes every year, whatever its turnover (Art. 957 para. 1 CO).

Does a GmbH have to have its accounts audited?

If two of the three thresholds (CHF 20 million balance sheet total, CHF 40 million turnover, 250 full-time positions) are exceeded in two consecutive financial years, an ordinary audit; otherwise, a limited audit. With no more than 10 full-time positions and the consent of all partners, it can opt out — for future financial years, with the entry in the commercial register applied for before the start of the financial year (Art. 727a CO).

How much has to go into reserves each year?

5% of the annual profit, after offsetting any losses carried forward, until statutory retained earnings and the statutory capital reserve together reach half of the share capital — 20% for a holding company (Art. 672 CO).

How is a dividend paid in a GmbH?

Once the accounts are approved, the partners' meeting resolves on the distribution, paid out of the profit and the available reserves. The company withholds the 35% withholding tax, declares it and pays it to the FTA, then pays the balance to the partners.

Try BeMyTalent free — choose “Limited liability company (Sàrl / GmbH)” when you activate accounting, and the chart of accounts adapts. → Start the trial