Starting a business can be daunting, even paralyzing. With so many possibilities in front of you, the hard part is knowing where to start.
Kokuu is a startup idea validation platform that guides you through those first, most important steps. Describe your idea and, in moments, you get a clear read on it: the market, who it's for, a pitch that holds, and how the financials work.
Get early accessAn idea starts as a feeling. Validation is what makes it a venture.
Until you test the assumptions behind it, you're guessing.
Kokuu takes your idea through four steps, from a hunch to a clear direction. Each one narrows down what you still don't know.
Built by founders who've been through it themselves.
A tested process guides your idea step by step, until you know whether it's worth building.
Kokuu does the heavy lifting and shows you where you stand at every step. You stay in control the whole way.
Turns assumptions into tests, and tests into evidence.
An assumption only counts once it's tested.
Makes sure a good idea can hold up as a business.
Interest is not demand.
Ku is the AI assistant that works alongside you, from your first sentence to the finished pitch, checking your reasoning and bringing other points of view.
A guide that only agrees with you is not a guide.
Kokuu comes from a team spanning venture building, engineering, product, strategy and brand. People who made big calls without enough evidence, and wanted a better way.
Ex-VC and founder of several companies who has raised millions in funding.
A good process shows you what matters before you speed up.Read Florian's story
More than ten years with startups, first in product design, now in marketing and brand, turning technical complexity into stories people want to follow.
The story is the distance you can close between ideas and realities.Read Marcos's story
A founder-written guide, reviewed as markets and rules change: validation, naming, trademarks, founder agreements, and forming a company in Switzerland, Germany and the U.S.
Test the problem, audience and willingness to pay before you commit.
Read chapter Chapter 07Equity, vesting, leaver rules and IP, in writing and early.
Read chapter Chapter 12The sequence, costs and timeline, and what founders often forget.
Read chapter Chapter 18Priced equity, convertibles, SAFEs and dilution, without losing the plot.
Read chapterKokuu is a guided startup idea validation platform. You describe your idea and, in moments, you get a clear read on it: the market, who it's for, a pitch that holds and how the financials work.
Kokuu follows a structured validation process built by founders and a former VC, so every step builds on the last. Kū, its AI co-pilot, is built to challenge your reasoning, not to agree with you.
No. It does the desk research for you (market, competitors and demand signals) and tells you which assumptions to test first. Real conversations with customers are still part of the process.
Kokuu gives you an honest read: launch, keep testing or pivot. If the evidence points somewhere else, it shows you where to adjust course early, before it costs you a year.
Kokuu is in development. Join the early-access list and we'll tell you as soon as it opens.
Yes. All 19 chapters are free to read, with no login. It covers validation, naming, trademarks, founder agreements, forming a company in Switzerland, Germany and the U.S., and first funding.
About Kokuu
Kokuu is a guided validation platform for founders staring down a raw idea. We trade guesswork for a clear, organized course, so you know where you stand and what to do next.
What we are about
An idea starts as a feeling. Validation is what makes it a venture. Kokuu takes your idea through four steps, each one narrowing down what you still do not know.
To give every founder the clarity to know how to best approach their idea, and the confidence to chase it well.
A world where every founder has the best chart to navigate the venture of bringing their idea into reality.
CB Insights found that 42% of failed startups had no market need. Most ventures don't fail for lack of effort. They fail because nobody tested the idea honestly before the money, time and team were committed.
Source: CB InsightsWhat we believe
Every idea rests on guesses. We turn them into tests, and tests into a bearing.
Polite enthusiasm is easy to get. We look for signals that people would act, and pay.
Kokuu brings other angles, not just applause, and never agrees to be agreeable.
The founding team
Florian has spent his career on both sides of the table. He has founded several companies across tech, blockchain and AI and raised millions in funding. Before that, he spent several years in venture capital, weighing which founders and ideas deserved backing.
That mix taught him something that now sits at the core of Kokuu: most ventures don't fail for lack of effort. They fail because nobody tested the idea honestly before the money, time and team were committed. As co-founder of Kokuu, he turns that experience into a structured path from first idea to clear decision, so founders get the evidence an investor would ask for before they launch, not after.
I've pitched ideas and I've judged them. The best time to find the flaw is before anyone has bet on it.
Marcos has spent more than ten years working with startups. He started as a product designer, first as an engineer designing physical products, then in UX/UI design for digital ones, before moving into marketing and brand, consulting for companies across music, fintech, innovation and software, and building AI into the core of how that work gets done.
What he learned along the way: most ventures don't stall because the product is weak, but because nobody can say in one honest sentence who it's for and why it matters. As Kokuu's founding head of brand and marketing, he leads brand, marketing and community, turning technical complexity into stories people want to follow and building the place where founders share what they've learned.
The story is the distance you can close between ideas and realities.
The Quiet Crew
Kokuu is built by a small, senior, multidisciplinary team working across venture building, AI and product engineering, commercial strategy, customer validation, partnerships and growth. Between them: several companies founded, millions raised, years spent on the investor side of the table, and more than a few ideas they stopped themselves, early, because the evidence wasn’t there.
They know the problem because they lived it. There was never a shortage of ideas, and there was never a shortage of tools. What was missing was one reliable way to compare opportunities, challenge the assumptions underneath them and decide which one deserved the next six months. Research sat in a dozen documents. Personas were built on intuition. Interview notes disappeared into spreadsheets. Pricing was a guess dressed up as a plan. At the end of it all there were plenty of outputs, and still no clear decision.
So they built the system they wanted to use themselves, structured validation, AI-supported research and real demand testing, ending in one honest read: launch, keep testing or pivot. It will not just tell you what you want to hear. A clear pivot, found in moments, is worth more than an enthusiastic yes that costs you a year.
The practical part: you get the judgement of a full founding team (product, technical, commercial, research and growth) without having to hire one first.
Early access
Join the list and we'll tell you when Kokuu opens. We'll also send a note whenever the Founders Bible changes.
The Kokuu Founders Bible
A free, founder-built playbook for going from "I have an idea" to "we're cleared for takeoff." Validation, naming, trademarks, the founder agreement, company formation in Switzerland, Germany, and the U.S., and your first funding round, written for founders, not lawyers.
TL;DR
Seven rules that come up again and again. Each links to the chapter behind it.
Your starting point
Many founders go wrong by starting at the wrong step. Pick where you are today and we'll point you to the right chapter.
Validate before liftoff: test the problem, audience, and willingness to pay.
Chapter 0302Sharpen the offer, then make a documented Go, No-Go, or Pivot call.
Chapter 0203Sign the founder agreement, then choose country and legal form, for the right reasons.
Chapters 07 & 0804Clean up operations, protect the brand, and get ready for first funding and hires.
Chapters 05 & 18Living document
The Bible changes as markets, rules and the world around founders change. Every chapter shows when it was last reviewed. Latest edition: 2026-09-18.
All chapters
Not sure where to begin? Find your entry point, from a raw idea to a formed company, and the right next chapter for your stage.
Read chapterChapter 02 · 6 minThe full path from idea to launch in 16 steps: validation, name, jurisdiction, legal form, team, formation and compliance.
Read chapterHow to test whether a business idea is viable: problem, audience, solution and willingness to pay, plus a 4-week validation sprint.
Read chapterChapter 04 · 5 minSix criteria and a six-step process for choosing a company name that works, and how to check register, domain and trademark risk.
Read chapterChapter 05 · 5 min NewHow to protect your brand before launch: searching for conflicts, where to file, what it costs, priority rights and what cannot be registered.
Read chapterChapter 06 · 4 minHow to choose and secure your domain: primary and defensive domains, .ch vs .com vs .eu, and what to do right after buying.
Read chapterChapter 07 · 5 min NewWhat a founder agreement should cover: equity split, vesting, leaver rules, decisions and IP assignment, in Switzerland, Germany and the U.S.
Read chapterSole proprietorship, GmbH or AG? Compare the three main Swiss legal forms and learn how to choose between them.
Read chapterChapter 09 · 4 minHow a Swiss sole proprietorship works: where it fits, its strengths and limits, and when to move to a GmbH.
Read chapterChapter 10 · 4 minThe Swiss GmbH explained: key facts, strengths, limits, and how it compares with a sole proprietorship and an AG.
Read chapterChapter 11 · 5 minThe Swiss AG: when it makes sense, when it does not, and how to choose between an AG and a GmbH.
Read chapterA practical guide to starting a company in the U.S.: state and entity choice, EIN, registrations and what international founders miss.
Read chapterChapter 15 · 5 minSole proprietorship, LLC or C corporation? How to choose a U.S. business structure, plus the 83(b) election and QSBS.
Read chapterChapter 16 · 4 minHow to choose a U.S. state to incorporate in: Delaware in 2026, common founder scenarios and the mistakes to avoid.
Read chapterChapter 17 · 4 minEIN, licenses, banking, taxes and ongoing compliance: the U.S. operational basics for a new company.
Read chapterStay on course
Kokuu is the validation platform we are building to help you test an idea before you commit to it. Join the early-access list, and we'll let you know when this guide changes.
The Kokuu Founders Bible
All 19 chapters in order. Use your browser to search, or save the whole Bible as a PDF.
Chapter 01 · Start here
Liftoff doesn't start with a registration number. It starts with the right starting point — and the right starting point begins with one simple question: where are you on the flight plan right now? Do you only have an idea, are you validating, are you ready to form a company, or have you already formed one and now need to clean up your setup?
This chapter helps you classify yourself, shows the next logical leg of the trajectory, and prevents you from moving too early into legal formalities or too late into validation.
Many founders start at the wrong point. They first search for legal forms, capital requirements, notaries, or registration, even though they still do not know whether their idea is commercially viable. Others stay too long in the idea phase and never formalize, even though validation already points to a real market.
So the first question is not: which legal form do I need?
The first question is: what stage am I actually in?
This is your entry point if you have observed a problem, have a rough business idea, do not yet know whether customers really need it, do not yet have a clear positioning, and are not yet sure whether you should even form a company.
Your next step is not formal company formation. Your next step is validation: test the problem, the target audience, the value proposition, and willingness to pay.
This is your entry point if you already have a clearer idea, want to run first customer conversations, want to test a landing page, want to sharpen your audience and business model, and want to decide whether to move forward or stop.
You do not need abstract theory. You need a concrete validation plan.
This is your entry point if you already have a validated or sufficiently credible idea, know what you want to sell, have customers, pilot customers, or at least strong demand signals, and now need to clarify country, legal form, capital, registration, taxes, and setup.
You are in the formation stage.
This is your entry point if you are already registered or already operating, but still have open setup questions, and have not yet handled bookkeeping, VAT, social insurance, business banking, contracts, or privacy properly.
You no longer need ideation guidance. You need operational discipline.
Right if you are still early. Follow this sequence:
Right if the core idea is already taking shape. Typical next steps:
Right if you are ready to form or have just formed. Typical topics:
This page is not meant to overload you with 30 topics at once. It routes you into the right next step.
Not useful:
These topics are usually most relevant first:
You do not start "in the EU" in the abstract. You start in a specific country. The EU is a legal and economic framework; the actual formation process follows national law. So you first need to clarify in which country you want to form the business, where you live, where your customers are, whether local presence is required, and how tax, VAT, and registration obligations work.
This edition covers Germany as the worked EU example (chapter 13). For any other EU country, use the same sequence — validation, name, domain, legal form, founder setup — and check the national rules with a local advisor.
You do not start "under one U.S. system." Formation is mainly state-based, while tax IDs, federal tax topics, and parts of compliance sit at the federal level.
So you first need to clarify in which state you want to form the business, where founders live and operate, where customers are located, whether you are building a small operating business or a venture-scale company, whether an LLC, corporation, or sole proprietorship fits your model, and whether you need an EIN, licenses, permits, or state tax registrations early.
If you are building next to a full-time job, you often need validation and a lean setup first. But you also need to think about employment contract restrictions, confidentiality obligations, and intellectual property conflicts.
If more than one person is involved, you need early clarity on roles, equity, vesting, decision rights, and IP ownership. Otherwise the biggest future problem may not be incorporation. It may be founder conflict. Chapter 07 covers the founder agreement in detail.
If you aim at investors, enterprise clients, or regulated customers, you need to think earlier than others about structure, liability, privacy, IP, governance, and compliance.
No. Before you choose a legal form, you should first understand the problem, the target audience, and the business model well enough.
As soon as a name becomes a serious option, secure the domain. But that never replaces validation.
When it is clear what you are selling, to whom, how money will be made, and why a formal structure now makes practical sense.
That depends on risk, scale, capital, external credibility, and team structure. It should not be decided in isolation.
No. In Europe, you always form in a specific country under national law.
No. In the United States, formation is mainly state-based, while several tax and compliance elements also sit at the federal level.
Chapter 02 · Start here
A company does not begin with a registration number. It begins with a credible idea. Anyone who wants to build properly should move in a clear sequence: idea, validation, business model, name, domain, country or state choice, legal form, founder setup, formation documents, registration, tax and insurance setup, bookkeeping, contracts, and operational readiness.
This chapter shows the full process and where each decision belongs.
At the start is not the product, but the problem. Answer clearly: what problem are you solving, for whom, how urgent it is, why it is commercially relevant, and why you are in a position to solve it.
OutputClear problem statement, rough target audience, first value hypothesis
Not everyone who could theoretically have the problem is a real customer. Distinguish between affected users, actual users, decision makers, and buyers.
OutputFirst persona or audience segments, clear assumptions about needs and purchase logic
Test whether the idea is actually viable. Useful methods: customer interviews, offer conversations, landing page test, mockup or clickable concept, willingness-to-pay test, competitor review.
OutputCredible signals that the problem is real, first signs that people might pay
Not every idea deserves a company. After validation, decide explicitly: move forward, adjust positioning, change the business model, or stop the idea.
OutputA documented decision and the evidence behind it
Before forming a company, you need to know how the business makes money. Examples: one-time sale, subscription, service fees, licensing, commission, marketplace fee.
OutputRough monetization logic, first pricing assumptions
The company name is not just taste. It influences brand, domain, positioning, and later scalability. Check memorability, pronounceability, digital usability, breadth, and risk.
OutputNarrowed name shortlist, preferred option
As soon as a name becomes a serious candidate, secure the relevant domain. Check the primary domain, relevant variants, country domains, and defensive variants.
OutputSecured domain base
A free domain does not mean the name is safe from a trademark perspective. At least clarify whether identical or highly similar marks exist in your classes and markets, and whether there is obvious collision risk.
OutputFirst risk assessment (chapter 05 shows how)
If you want to start in Europe, choose a specific country. In the U.S., choose the right state logic. In Switzerland, still check residence, tax, and operating logic.
OutputClear formation jurisdiction
Now comes the legal form. Not before. Typical questions: liability protection, investor readiness, capital availability, founder count, administrative weight you can carry.
OutputChosen legal form, reasoned decision
As soon as more than one person is involved, the rules must be clear: roles, responsibilities, ownership, vesting, decision rights, IP ownership, conflict and exit logic.
OutputFounder setup, documented in a written founder agreement (chapter 07)
Define what is needed for formation and early operations: formation capital, liquidity reserve, business bank account, formation costs, notary or filing costs, accountant or tax advisor.
OutputRealistic startup budget
The legal act of formation. Depending on jurisdiction and legal form, this includes articles, bylaws, or company agreement; capital contribution; notary or filing steps; commercial register or state registration; tax or ID registrations.
OutputLegally existing company or properly registered business activity
After formation, the company is not finished. Set up bookkeeping, invoicing, VAT or sales tax, social insurance or payroll, document handling, tax reserves, business insurance — and any beneficial-owner reporting that applies.
OutputOperationally credible base setup
Now the business must function in the real world: customer contracts, terms and conditions, privacy rules, contractor or employment contracts, banking signatory logic, document storage, internal processes.
OutputLaunch-ready business
Formation is not the end. It is the beginning of ongoing obligations: recurring filings, tax returns, permit renewals, payroll obligations, corporate records, governance updates.
OutputA company that remains legally and operationally usable over time
Not every founder needs the full process in maximum depth.
Possible when you start alone, risk is low, the offer is simple, and no investors, employees, or major liability topics are in play.
Needed when several founders are involved, meaningful risks exist, B2B customers expect professionalism, investors or ownership complexity matter, or the business has to look structured from day one.
Many founders formalize too early and bind capital, time, and energy even though demand and willingness to pay are still unclear.
Others already sell, work in teams, or take on real obligations, but still have no clean setup for ownership, contracts, bookkeeping, or registration.
The process looks big, but it becomes manageable when sequenced properly.
Not the legal form. The first step is clarity around the problem, target audience, and value proposition.
No. But you should ideally have credible signs that demand exists.
As soon as a name becomes a serious candidate.
As soon as multiple people are building together — even before formation, if the project is becoming real.
Yes. Not down to the last detail, but enough to avoid building a chaotic setup.
Partly, yes. But for sensitive topics like tax, registration, trademark risk, state-based U.S. issues, or company law, expert review is often worth it.
Chapter 03 · Before you form
Validation is the pre-flight check for your idea. It does not mean that friends tell you your idea sounds good. Validation means you test with a real target audience whether the problem matters, whether your offer is understood, and whether people are willing to give attention, data, time, money, or serious engagement.
A clean pre-flight check saves months of runway and prevents you from launching a company around a problem nobody needs solved badly enough.
Validation is the structured attempt to test the riskiest assumptions behind your idea.
Typical assumptions include:
Validation is not a feeling. It is a test process.
Formal formation costs time, money, and mental energy. The bigger cost, however, is spending six months building something that never had real demand.
Validation helps you:
Tests whether the problem is real, frequent, and painful enough in the target audience. Guiding questions: does the problem really occur in practice, how is it solved today, how frustrating is the current situation, what does the problem cost in time, money, or risk?
Tests whether you are speaking to the right audience. Not every affected person is automatically a realistic buyer.
Tests whether your proposed approach is understandable and attractive. Does the user understand the offer? Does it sound relevant? Would they try it? Where is resistance or confusion?
Tests whether interest also has economic meaning. People often say something sounds interesting. That does not mean they would buy.
The best early method when clarity is still low. Goals: understand the language of the target audience, find patterns, understand problems, frustrations, and substitute solutions. Ask about past behaviour ("when did this last happen, what did you do?"), not hypothetical futures ("would you use…?").
Useful when you want to test value proposition and demand. Goals: measure first attention, collect conversion signals, compare statements with behaviour.
Useful when you want to make a proposed solution tangible enough to test. For hardware ideas, a pre-order or reservation page does the same job.
Especially powerful in B2B. If you speak directly about a possible offer, you quickly see whether the problem is commercially meaningful.
Essential if you want to build a real business, not just generate curiosity.
Not everything must become a spreadsheet immediately, but you do need criteria — and you should write them down before you start, so the results cannot quietly move the goalposts.
Examples:
Define the problem clearly. Define the target audience. Build the interview guide. Write down your success criteria.
OutputProblem statement, audience hypothesis, interview script, pass/fail criteria
Run 5 to 10 customer interviews. Cluster responses. Look for patterns in language, frustration, and current substitutes.
OutputPattern map, sharpened pain points, refined audience
Adjust the value proposition based on what you heard. Build a simple landing page or offer page that puts the offer in front of people.
OutputLive offer page, value proposition v2
Measure reactions against the criteria you set in week 1. Collect more feedback. Make a Go, No-Go, or Pivot decision based on actual signals — not on attachment to the idea.
OutputA documented Go / No-Go / Pivot verdict
There is no magical threshold. But an idea becomes much more credible when:
Critical signals include:
Many founders hide behind endless validation. That is also a mistake. Validation is meant to lead to a better decision, not permanent hesitation.
No, but they are a good start. The quality and relevance of the interviewees matter as much as the number.
It is not one or the other. Interviews help you understand early. Landing pages help you test messaging and demand later.
No. Early on, a clear problem, a credible offer, and a test setup are often enough.
When you have enough evidence to move forward with acceptable risk — not when every uncertainty has disappeared.
Where appropriate, yes. Real buying or pilot interest is one of the strongest forms of validation.
When people find the topic interesting but nobody takes meaningful action.
Chapter 04 · Before you form
A company name is not a harmless creative exercise. It affects positioning, memorability, searchability, domain strategy, trademark risk, and in some cases even trust.
A strong name is memorable, flexible, digitally usable, and legally workable. A weak name can cost visibility, clarity, and expensive changes later.
Founders often discuss names in a purely subjective way. That is a mistake.
A name does not just need to be liked. It needs to work: be memorable, be pronounceable, work in search and digital channels, not be confused with others, fit the positioning, and work together with domain and trademark logic.
A good name sticks. If someone hears it once, they should be able to recall it later.
If people do not know how to say it or spell it, you lose discoverability and word-of-mouth.
Can people type it, search it, remember it, and use it as a URL?
The name should fit your market, audience, and level of ambition.
A name should not box you into a tiny corner that becomes restrictive later.
A name that obviously imitates an existing brand is not clever. It is a liability.
Before brainstorming, clarify who the company is for, what tone the name should carry, whether it should feel factual or warm, whether you want a brand name or descriptive name, and whether it should work locally or internationally.
OutputNaming brief — audience, tone, scope, ambition
Typical directions: descriptive, metaphorical, invented or abstract, personified, modern functional, strongly conceptual. Not every direction fits every business.
OutputTwo or three directions to explore
Generate enough options. Do not evaluate too early. Aim for breadth, not perfection.
OutputLonglist of 30 to 60 candidates
Remove names that are too generic, hard to spell, too close to existing brands, unclear or weak, or too narrowly tied to one product version.
OutputShortlist of 5 to 10 serious candidates
How does the name sound when said aloud? In a pitch? On a website? Could someone spell it without asking twice? Does it mean something unfortunate in your key languages?
OutputTop 2 to 3 finalists
Only now does creative work become a real candidate. Check company registers, every relevant domain variant, and trademark databases before you commit.
OutputOne name with confirmed digital and legal viability
A quick self-check is a start, not clearance. Chapter 05 explains how to search, file, and budget for a trademark.
Advantages: potentially differentiated, more ownable over time. Disadvantages: requires more brand-building effort.
Advantages: conveys mood or direction, often easier to remember than generic descriptions. Disadvantages: can sound weak or clichéd if badly chosen.
Advantages: quick to understand. Disadvantages: often weaker from a trademark perspective, less differentiated, sometimes forgettable.
Yes, early startups can rebrand. But every rebrand costs trust, traffic, brand consistency, domain and email migration effort, and market clarity. That is why naming deserves serious attention before launch.
That depends on your positioning, market, and audience. Descriptive is not automatically better.
Not always, but the overall domain strategy needs to make sense.
Not necessarily. Depending on the strategy, company and product can have different names.
That is risky. Similarity and confusion risk should be checked carefully.
No. A register entry and a trademark are different things. The register protects the company name in its own context; a trademark protects the brand for specific goods and services.
Clarity usually wins. Creativity without usability rarely becomes an advantage.
Chapter 05 · Before you form
Your company name, your domain, and your trademark are three different things. The commercial register stops someone from registering an identical company name. A domain gives you an address. Only a trademark gives you the right to stop others from using a confusingly similar brand for similar products — and only a trademark check tells you whether you are the one infringing.
Most early founders do not need an expensive trademark strategy. But they do need to avoid building a brand on a name they cannot keep.
A trademark protects a sign — a word, a logo, sometimes a slogan — for specific goods and services, in specific territories.
List your core products and services and map them to classes. Be precise but not narrow: include what you will realistically offer in the next few years.
OutputTwo to four relevant classes
Search for identical and similar marks in your classes and target markets: Swissreg for Switzerland, EUIPO eSearch for EU trademarks, TMview for many national offices at once, and the USPTO search system for the U.S. Look for similar spelling and similar sound, not just exact matches.
OutputConflict list with a risk rating per hit
File where you sell, where you will sell soon, and where you manufacture or build. Most early startups start with their home market plus the EU or U.S. — not the world.
OutputFiling plan by territory
File the word mark first — it protects the name regardless of logo design. Add a logo mark later if the logo becomes a real asset. Use the offices' own product and service lists to avoid surcharges and objections.
OutputFiled application and filing date (your priority date)
Diarise renewal dates, use the mark consistently, and watch for copycats. Registration you never enforce loses value.
OutputRenewal calendar and a simple watch routine
When you file in one Paris Convention country (Switzerland, the EU, and the U.S. are all members), you have six months to file in other countries with the same priority date. Filing at home first and deciding on other markets within six months is a cheap way to keep options open.
This is also why descriptive names are weak brands: they are hard or impossible to protect.
| Company name | Domain | Trademark | |
|---|---|---|---|
| What it gives you | Legal name in the register | A web address | Exclusive right to the brand for your goods and services |
| Territory | The register's jurisdiction | Global, first come first served | Per country or region |
| Stops copycats? | Only identical company names, in that register | No | Yes, within its classes and territory |
| Protects you from infringing? | No | No | Only if you searched before filing |
Not legally. But you should at least search before you commit to a name, and file for your core brand before you spend real money on it.
Your home market first, then the market that matters next. Use the six-month priority window to decide.
The company. If a founder filed before formation, assign it to the company in writing.
™ can be used for any mark you claim. ® may only be used once the mark is registered — using it earlier is misleading and in some countries illegal.
Switzerland and the EU often register within a few months if there is no objection or opposition. The U.S. typically takes a year or more.
Filing is possible without one. For your core brand, a professional search and filing strategy is usually worth the cost.
Chapter 06 · Before you form
A domain is not a side detail. It is often the digital base of your brand, website, and communication.
If you wait too long, you may lose the strongest address or end up with expensive compromises later. A good domain strategy starts as soon as a name becomes a serious candidate, not after registration. At the same time, a free domain never replaces trademark review, legal form choice, or jurisdiction decisions.
The domain influences discoverability, credibility, email setup, brand consistency, and marketing efficiency.
If the domain does not fit the name, it creates friction. People remember you less easily, links become less clear, and later changes become costly.
Not after formation. Earlier. The right time is usually:
Your main domain. It should match the company or product as closely as possible.
Useful if you want a strong local market signal, such as .ch.
Often .com, if you want broader international readability and scale.
Relevant typo versions or alternate forms you secure for protection.
Which domain should be the long-term home of the company? This is the anchor everything else supports.
OutputOne primary domain candidate
Examples: .ch, .com, with or without hyphen, full name or shortened version. Identify which variants are realistically available.
OutputVariant availability map
Do not buy every possible variant. Focus on the main domain, directly relevant variations, and meaningful defensive variants.
OutputBuy list with 1 to 4 domains
A free domain never means the name is legally clean. Check for trademark conflict before you commit.
OutputRisk-checked candidate
Does the domain look professional? Does it work in email addresses? Is it easy to read? Is it robust across languages?
OutputA domain that holds up at scale
Strong if your market is Switzerland and local trust matters. Anyone can register a .ch domain through an accredited registrar.
Useful if you aim internationally, but often harder to secure.
Can be strategically interesting for a Europe-oriented business — but eligibility is restricted. You need EU citizenship, or residence or an establishment in the EU/EEA. A Swiss company without an EU presence cannot hold a .eu domain in its own name.
If the United States is a major market, the question is not only whether a .us domain exists (it requires a U.S. nexus), but whether the main brand should live on .com, a country-coded domain, or another route.
The stronger question is: what domain structure best supports how customers will discover, trust, and remember the brand?
Yes, often that is the right move. The domain is not proof of formation. It is a digital asset.
Not always, but in most serious cases it is smart once the name is becoming real.
Often yes, if the main domain is strong. In some cases two or three versions make sense.
That depends on the market. For a Swiss focus, .ch can be strong. For broader international use, .com is often attractive.
Digitally, yes. Legally, not automatically.
Where possible, yes. Hyphens make communication harder.
Ideally the company or a clearly controlled organizational account, not an unmanaged private account.
Chapter 07 · Before you form
The most common reason early startups fail is not the legal form, the tax setup, or even the market. It is founder conflict. And most founder conflict starts with things nobody wrote down: who owns what, who decides what, and what happens when someone leaves.
A founder agreement does not prevent disagreement. It decides in advance how disagreements end.
As soon as two or more people are building something together — even before formation. Once there is real work, real IP, or a real chance of value, you need clarity in writing.
The articles of association or bylaws do not replace it. They cover the company's formal structure. The founder agreement covers the relationship between the owners.
Who owns how much, and why. Base it on expected future contribution, not on who had the idea. Equal splits are fine when contributions are genuinely comparable; they are dangerous when used to avoid a hard conversation.
Founders earn their equity over time. The market standard is four years with a one-year cliff: nothing vests in the first twelve months, then 25% vests, then the rest monthly or quarterly. If someone leaves after four months, they do not walk away with a quarter of the company.
What happens to a departing founder's shares?
Who does what, who is full-time, and what counts as enough commitment. Write down what happens if someone stays part-time longer than agreed.
Which decisions need a simple majority, which need a supermajority (for example 75%), and which need unanimity. Typical supermajority items: new shareholders, capital increases, employee equity pools, selling the company.
With two 50/50 founders, every disagreement can become a deadlock. Agree on the mechanism in advance: an advisor or board member with a casting vote, mediation, or as a last resort a buy-sell clause.
Everything each founder built for the project — code, designs, brand, domains, content — belongs to the company. Include work created before formation, and assign it in writing once the company exists.
Reasonable restrictions while a founder is involved and for a limited time after. Keep them proportionate — overly broad non-competes may not be enforceable.
Agree early whether and how an employee pool (often 10–15%) will be created and who is diluted by it. Chapter 18 goes deeper.
The document is the easy part. The conversation is the hard part. Before any lawyer drafts anything, sit down and answer together:
If you cannot agree on these now, you will not agree on them later under pressure.
Especially then. It protects the friendship as much as the company.
Usually not much more. Ideas are cheap; execution over years is what creates value.
No. It is standard, and investors will expect it. It protects the founders who stay.
Yes, with everyone's agreement. It gets harder — and more expensive for taxes — the more the company is worth.
Once you have agreed the key points among yourselves. Templates are a good starting point, but have a lawyer in your jurisdiction review the final document.
Treat it as a signal. It is far better to find out now than after the company has value.
Chapter 08 · Swiss legal forms
Anyone starting a company in Switzerland will, in practice, usually decide between three legal forms: sole proprietorship, GmbH, or AG.
The right choice depends on liability, capital, team structure, external credibility, growth plans, and administrative burden — not on prestige.
The legal form influences liability, capital needs, external perception, ownership logic, complexity of formation, and part of the administrative burden.
If you choose the wrong legal form, you often pay twice later.
The leanest form for an individual founder. Simple structure, no separate legal entity, and the founder is personally liable with private assets. Often useful for lean solo starts.
Typically suitable for freelancers, consultants, small service businesses, and early testing stages.
Often the standard legal form for small and medium-sized businesses in Switzerland. A separate legal entity with liability limited to company assets, share capital, a more formal setup, and a more professional external position.
Typically suitable for small businesses, agencies, SaaS and digital companies, and teams with clearer ownership logic.
The more formal and more capital-heavy structure. A separate legal entity, higher capital requirements than a GmbH, more formal governance, and often more investor-oriented.
Typically suitable for growth-oriented companies, ambitious ownership structures, and funding expectations.
Question 1: How large is the liability risk? If the business carries significant risk, personal exposure becomes a real issue.
Question 2: Are you starting alone or as a team? Solo starts are often simpler. Teams need cleaner structure earlier.
Question 3: How important is external credibility? Some customers, partners, and investors expect a more formal company form.
Question 4: How much capital is realistic? Capital companies require more structure and more capital.
Question 5: How likely are investors or later ownership rounds? That is one of the main reasons the AG becomes relevant.
Question 6: How much administration do you realistically want? Not every business needs the heaviest structure from day one.
| Sole proprietorship | GmbH | AG | |
|---|---|---|---|
| Best when | You start alone, risk is limited, you offer a simple service, you want to test leanly. | You want liability limitation, a team setup, a professional legal vehicle. | Investors are realistically part of the path, ownership will become advanced, governance matters early. |
| Liability | Personal — the founder carries it with private assets. | Limited to company assets. | Limited to company assets. |
| Minimum capital | None. | CHF 20,000, fully paid in. | CHF 100,000; at least CHF 50,000 (and 20% of each share) paid in. |
| Owners public? | Yes — the owner is the business. | Yes — members are listed in the commercial register. | No — shareholders are not published. |
| Formation | Register entry required above CHF 100,000 annual revenue; voluntary below. | Public deed before a notary, then commercial register. | Public deed before a notary, then commercial register. |
| Strengths | Fast, simple, cost-efficient. | Balance of structure and practicality. | Formal, credible, investor-friendly. |
| Weaknesses | Personal risk, weak scaling logic. | Capital requirement, less lean. | More capital and formality; often too heavy early. |
High-level comparison. Use it as a starting frame, not as a substitute for case-specific review.
Many founders are attracted to the AG because it sounds bigger. That is not a valid decision principle.
The real question is not: which form sounds the most impressive? The real question is: which structure fits risk, model, capital, and stage?
In early phases, often sole proprietorship or GmbH. The AG becomes more relevant when growth, investors, or more formal ownership structures matter.
No. It is often suitable, but stage and risk matter.
Yes — an existing business can be brought into a new GmbH or AG, and a GmbH can be converted into an AG. But it creates cost and friction and should not be treated as a free shortcut.
Often more attractive from an ownership and governance perspective, but many founders do not need it early.
Confusing prestige with fit.
The detailed chapters on sole proprietorship, GmbH, and AG, followed by the Swiss formation guide.
Chapter 09 · Swiss legal forms
The sole proprietorship (Einzelunternehmen) is often the simplest way for an individual in Switzerland to start operating. It is lean, fast, and well suited to many small service-based or solo setups.
It also has clear limits: personal liability, weaker scalability, and in some situations a less formal market perception. Simplicity has trade-offs.
A business run by one individual in their own name. There is no separate legal entity: the founder is the business, and business debts are personal debts. Compared with capital companies, it is lighter and easier to set up.
Typical examples: consulting, coaching, small agency work, creative services, small-scale retail, early solo digital offers with limited structural complexity.
No minimum capital, no notary, and no register entry below the revenue threshold.
It fits founders who do not need a heavy legal structure immediately.
Especially in the early phase, that can be an advantage.
This is the central point. If the business creates real liability risk, the founder carries it with private assets.
The sole proprietorship is built around one individual, not a multi-founder structure. Two people running a business together without an entity typically form a simple partnership (einfache Gesellschaft) — with joint personal liability — whether they intend to or not.
If equity, investors, or structured scaling become relevant, it quickly becomes limiting. There are no shares to give.
In some contexts a sole proprietorship is completely sufficient. In others, a GmbH or AG signals more structure.
Often a reasonable fit if scope and risk remain limited. Check your employment contract for non-compete and side-activity clauses first.
Usually a weak fit. Ownership and roles are better handled through a capital company.
Can be a sensible option if you want to test leanly and the risk is under control.
Even a sole proprietorship needs discipline: name, domain, bookkeeping, a separate business bank account, AHV and social insurance, VAT relevance, customer contracts, and privacy.
Usually yes — but cheaper is not the same as more suitable.
Yes. You then register as an employer with the compensation office and handle payroll deductions, accident insurance, and (above the threshold) occupational pension. The structure is still built around you personally.
Only once annual revenue reaches CHF 100,000. Below that, registration is voluntary.
Often yes. For many solo service businesses it is the natural option.
When liability protection, team structure, credibility, or growth logic matter more.
Possibly for a very early solo test. For larger ambitions, it is too limited.
Chapter 10 · Swiss legal forms
For many founders in Switzerland, the GmbH is the most practically important legal form. It offers a strong balance between liability limitation, professional credibility, and manageable complexity.
It is not a default answer to every situation. A GmbH requires capital, formal documents, and more structure than a sole proprietorship. For many small and mid-sized businesses, however, it is the most sensible middle ground.
The GmbH is a capital company with its own legal personality. It suits founders who no longer want to operate personally and informally, but who do not yet need the full weight of an AG.
Typical use cases: small and medium-sized businesses, agencies, multi-person consulting businesses, software and digital firms, and startups in early to mid-stage growth.
For many founders, the main reason. Company and founder are clearly separated.
Clearly more structured than a sole proprietorship, but lighter than an AG.
If more than one person is involved, the GmbH is much cleaner than an informal arrangement.
For many customers and partners, a GmbH signals seriousness and stability.
It is not the lightest structure for an ultra-lean test.
It requires preparation, proper documents, and administrative discipline. Transferring GmbH shares also requires a written contract and usually shareholder approval — fine for small teams, clumsier for frequent financing rounds.
If you are still in raw exploration, a GmbH may be premature.
More structure, clean separation between founder and company, stronger external credibility, less lean.
More accessible for smaller setups, usually a better fit for SMEs and many early startups, less heavy than an AG while still formal. Owners are public in a GmbH, private in an AG.
In many practical situations, yes. It is the natural middle ground between sole proprietorship and AG.
No. A single founder can form a GmbH. It is especially useful when more than one person or a formal structure is involved.
No. It is more structured and stronger on liability, but also heavier.
To a degree. Many Swiss startups raise early rounds as a GmbH and convert to an AG before a larger round.
Yes, but less lean than with a sole proprietorship. A GmbH is a conscious step into more structure.
Yes, but at least one person with signing authority must live in Switzerland, and you can sign the formation deed through a notarised power of attorney.
Chapter 11 · Swiss legal forms
The AG (Aktiengesellschaft) is the more formal and more capital-intensive company form in Switzerland. It becomes relevant when professionalism, ownership structure, governance, or investor readiness play a larger role.
For many early-stage founder projects, however, it is too heavy. Choose an AG for strategic reasons, not image reasons.
A capital company with a clear formal structure, higher capital requirements, and a professional market perception. Its strengths show where growth, financing, and ownership structure matter.
Typical use cases: growth-oriented startups, technology companies with larger ambitions, businesses with realistic investment paths, and setups with multiple owners and a structured ownership approach.
The AG is perceived as a strong formal structure.
For ownership rounds, financing, employee equity, and structured growth, the AG is more flexible.
The AG provides a formal governance framework with a board of directors.
If the company is not meant to stay small and local, the AG becomes relevant earlier.
The AG needs at least CHF 50,000 paid in, compared with CHF 20,000 for a GmbH.
Formation and ongoing governance are more demanding.
If the idea is not yet validated, an AG is rarely the right immediate answer.
The name sounds large and professional. That leads to the false assumption that an AG is automatically best for ambitious founders.
The better question is: do I actually need the advantages of an AG now? If not, the AG is early overhead.
The legal act of formation is only the start. The same operational realities still matter: bookkeeping, business bank account, VAT, contracts, privacy, operating processes, the share register, beneficial-owner reporting, and founder governance beyond the formation documents.
Not automatically. It is powerful for ambitious setups, but many ideas do not need it early.
Often yes, because of simpler share transfers, the capital band, and governance. But that only matters once investors are a real path.
Only with good structural reasons. For many early solo setups, it is unnecessarily heavy.
It is often perceived that way. Whether it is more suitable depends on the business case.
Yes — a GmbH can be converted into an AG under the Merger Act, keeping the same legal entity. It needs a notary, an audited conversion report (or a waiver in simple cases), and enough capital. It is work, but routine.
Forming it only because it sounds bigger.
Chapter 12 · Switzerland
Anyone who wants to start a company in Switzerland should set the sequence properly: idea and validation, naming, domain, legal form, founder setup, capital, and only then formal incorporation.
For most early-stage founders the relevant legal forms are sole proprietorship, GmbH, and AG. Beyond that, the commercial register, the transparency register, VAT, AHV, bookkeeping, business banking, and contracts are essential. This chapter gives the full Swiss overview.
Switzerland offers a stable business environment, reliable institutions, strong international positioning, and in some cases attractive cantonal tax conditions — combined federal, cantonal, and communal profit tax ranges from roughly 12% to 21% depending on the canton. It is not a low-cost startup jurisdiction. Plan both formally and financially with realism.
The rule is the same everywhere: do not form first. First test whether the offer is commercially relevant.
OutputDocumented Go / No-Go / Pivot decision
Check the name in Zefix (the central commercial register index) and in Swissreg for trademarks, then secure the domain.
OutputChecked name, secured domain
Most early-stage founders decide between sole proprietorship, GmbH, and AG.
OutputLegal form, reasoned decision
Draft the articles of association, open a capital deposit account (Kapitaleinzahlungskonto) at a Swiss bank, pay in the capital, and receive the bank's confirmation.
OutputDraft articles, capital confirmation
The founders — or their representative with a notarised power of attorney — sign the public formation deed before a notary. The notary or founders file with the cantonal commercial register. The company comes into existence on registration and is published in the Swiss Official Gazette of Commerce (SOGC).
OutputRegistered company, UID number
Release the capital to the operating account, then set up bookkeeping, AHV, VAT, insurance, contracts, banking, and beneficial-owner reporting.
OutputCompany ready to operate
Fees vary by canton and provider. Get a quote before you commit.
Suitable for: individuals, small businesses, service models, early market testing, simple structures.
Strong when: you start alone, risk is limited, little capital is needed.
Weaker when: you want liability separation, investors may matter, a formal business vehicle is needed.
Suitable for: SMEs, founder teams, agencies, software companies, advisory or product companies.
Strong when: liability should be limited, you want a clean legal entity, you can support CHF 20,000 of share capital.
Weaker when: you still need a very lean, uncertain test phase.
Suitable for: growth-oriented companies, investor-facing setups, formal governance requirements, larger funding ambitions.
Strong when: ownership and financing will become sophisticated, higher-level credibility matters, shareholder privacy matters.
Weaker when: you still need to test very leanly and the capital and administration are not yet justified.
The company name should be memorable, fit the business model, not be too narrow, work digitally, and align with trademark and domain logic.
Important: the commercial register and trademark law are separate systems. A name accepted by the register can still conflict with a registered trademark.
.ch is often the natural base.com can also make senseMany founders focus only on the commercial register. But social insurance matters just as much. Self-employed founders register with the cantonal compensation office. As soon as a GmbH or AG pays salaries — including to the founders — it must register as an employer, handle AHV/IV/EO and unemployment insurance deductions, take out accident insurance, and join an occupational pension fund once salaries exceed the threshold.
VAT registration is mandatory once worldwide taxable revenue reaches CHF 100,000 per year; voluntary registration below that is possible and sometimes useful. The standard rate is 8.1% (reduced rates 2.6% and 3.8%). Parliament has approved a rise to 8.5% from 2028 to fund the 13th AHV pension, subject to a popular vote.
Even small businesses create problems later when receipts, cash flow, and invoicing are handled badly from the start. GmbHs and AGs must keep full double-entry books.
If several people are involved, early written clarity matters: equity, vesting, roles, decision rules, IP, and exits. The articles of association do not cover this.
Especially for digital products, agencies, software, and AI-driven businesses, it must be clear who owns code, content, design, and brand assets. Assign pre-formation IP to the company in writing.
Switzerland can be a good fit if you live or operate there, your network and market are there, you want to build there long term, and stability and reputation matter to your model.
It may be less suitable if your market, team, and operating reality are elsewhere, or if you choose Switzerland only because it sounds prestigious.
In early stages, often sole proprietorship or GmbH. The AG becomes more relevant when growth, investors, or formal governance matter.
Yes. A sole proprietorship, a GmbH, and an AG can all be formed by one person.
A GmbH or AG only comes into existence through registration. A sole proprietorship must register once revenue reaches CHF 100,000.
In practice, yes. For a GmbH or AG you need a capital deposit account before the notary appointment.
Registration is mandatory from CHF 100,000 of worldwide taxable revenue per year. Check it early so nothing gets missed.
Yes, via a notarised and apostilled power of attorney — but you need at least one Swiss-resident person with signing authority, and Swiss banks may ask for more documentation.
No. The right jurisdiction depends on residence, market, team, tax logic, operating reality, and long-term plans.
Chapter 13 · Germany (EU)
In the EU you never form "in Europe" — you form in one country under national law. Germany is the largest market in the EU and the most common EU base for founders from the DACH region, so it is the worked example in this edition. The logic transfers to other EU countries; the details do not.
As everywhere: validate first, then form. The German formation process is formal, but it is well-trodden and predictable.
One person, no separate legal entity, full personal liability. Start by registering a trade (Gewerbeanmeldung) — or, for freelance professions such as many consultants, developers, and designers, simply by notifying the tax office (Freiberufler).
What two or more people automatically form when they do business together without an entity — with joint personal liability. Since 2024 a GbR can be entered in a new company register (Gesellschaftsregister), which it needs, for example, to acquire real estate or company shares. Not a good vehicle for a startup.
A "mini-GmbH". Minimum share capital €1, liability limited to company assets. In return, 25% of each year's profit must be retained until the reserve reaches €25,000; then it can be converted into a regular GmbH. Useful when capital is tight, but some partners and banks see it as less established.
The standard vehicle for startups and SMEs in Germany. Minimum share capital €25,000, of which at least €12,500 must be paid in before registration. Liability limited to company assets. Most German venture-backed startups are GmbHs.
A stock corporation with €50,000 minimum capital and a supervisory board. Rarely the right choice early; it becomes relevant closer to an IPO.
| Einzelunternehmen | UG | GmbH | |
|---|---|---|---|
| Liability | Personal | Limited to company assets | Limited to company assets |
| Minimum capital | None | €1 (retain 25% of profits until €25,000) | €25,000; €12,500 paid in before registration |
| Formation | Trade registration or tax office | Notary + commercial register | Notary + commercial register |
| Perception | Solo business | Small company, limited capital | Established standard |
| Best for | Solo, low-risk starts | Lean team starts with little capital | Team startups, investor path |
High-level comparison. Use it as a starting frame, not as a substitute for case-specific review.
Search the common register portal (Handelsregister) and trademark databases. The name must be distinguishable from other companies at the same location and must include "GmbH" or "UG (haftungsbeschränkt)".
OutputAvailable, risk-checked name
Up to three founders with one managing director can use the statutory model protocol (Musterprotokoll) — cheaper, but inflexible, with no room for vesting or transfer rules. Teams planning to raise money should use individual articles.
OutputArticles or Musterprotokoll, plus shareholder list
All founders sign before a German notary. Since 2022 this can also be done fully online by video through the German Federal Chamber of Notaries' platform, using an eID-enabled ID card or electronic residence permit.
OutputNotarised articles and managing-director appointment
Open a business account for the company in formation and pay in at least half the capital (GmbH) or the full capital (UG). Note that a UG cannot be formed with contributions in kind.
OutputProof of capital payment
The notary files with the commercial register. The GmbH or UG exists once it is entered — until then, founders can be personally liable for business they conduct in its name.
OutputRegistered company, register number
Register the trade with the local trade office (Gewerbeamt) if applicable, complete the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) online via ELSTER, and receive your tax number and VAT ID. IHK (chamber of commerce) membership follows automatically.
OutputTax number, VAT ID, operating company
If you can raise €12,500 and plan to take investment, a GmbH is usually the cleaner start. A UG works for very lean starts, and can be converted later.
Yes. Neither shareholders nor managing directors need to live in Germany. Practical hurdles are the notary appointment, banking, and where the company is actually managed.
Yes, since 2022, via video notarisation — provided founders have a compatible electronic ID.
Not legally, but most GmbHs use one for annual accounts and tax returns. German tax filing is formal and deadline-driven.
Use the same sequence and check the national rules. Minimum capital, notary requirements, and VAT thresholds vary widely across the EU.
Neither is better in general. Choose based on where you live, where your customers and team are, and where you want to raise money.
Chapter 14 · United States
Starting a company in the United States is not one process under one system. Company formation is largely state-based, while tax, identity, and some compliance elements sit at the federal level.
Founders need to decide not only what type of company to form, but where to form it, where the business will operate, whether they need an EIN, which licenses or permits apply, and how ongoing compliance will work.
The U.S. is not one uniform incorporation regime. Think in layers:
Just like everywhere else, it is a mistake to rush into formation before validating demand.
OutputDocumented Go / No-Go / Pivot decision
Some founders sell into the U.S. without forming there. Others need a U.S. entity early — typically to raise from U.S. investors, sign U.S. enterprise customers, or hire in the U.S.
OutputClear reason for (or against) a U.S. entity
Where do founders live, where will the business actually operate, where are employees or contractors, where are customers concentrated — and is there a real reason to form in a different state from the operating state?
OutputState of formation and operating states
Typical early choices: sole proprietorship, LLC, and corporation.
OutputEntity type, reasoned decision
State formation documents, a registered agent in the state of formation, an EIN, state tax registrations, and licenses and permits.
OutputRegistered entity with tax identity
Business banking, bookkeeping, contracts, privacy and data handling, insurance, and recurring compliance.
OutputCompany ready to operate
Founders are often exposed to internet folklore such as "just incorporate in Delaware." That can be right in some cases and wrong in many others.
The stronger questions are:
State selection is a first-order founder decision, not a footnote. Chapter 16 goes deeper.
The simplest path for a single person operating a small business. It provides no separation between owner and business and is too weak for ambitious or risk-sensitive setups.
Attractive for founders who want a structured company vehicle with flexibility and practical operation.
Relevant when growth, ownership structure, governance, financing, or a venture path become central. The Delaware C corporation is the default for venture-backed startups.
An EIN (Employer Identification Number) is the federal business tax ID issued by the IRS. It is needed for banking, tax filings, payroll, and most administration — much earlier than many non-U.S. founders expect.
One of the most underestimated issues in the U.S. is the license and permit layer. Depending on the business model, the company may need state licenses, county or city business permits, professional or regulated activity approvals, or home-based business permissions.
No. Formation is mainly state-based, while several tax and compliance topics sit at the federal level.
No. That depends on how you operate, what you sell, where customers are, and which contractual or tax realities apply.
No. It is the standard for venture-backed corporations, but it should never be chosen by reflex.
In almost all practical cases, yes — banks require one, and so does hiring or filing corporate taxes.
Not for a company formed in the U.S. — FinCEN removed that requirement in 2026. A non-U.S. company registered to do business in a U.S. state still has to report.
No. It is practical for many small businesses, but most venture investors expect a C corporation.
Chapter 15 · United States
For most founders, the first real U.S. structure decision is between three options: sole proprietorship, LLC, and corporation.
The right choice depends on liability, tax logic, ownership structure, investment path, administrative complexity, and where and how the company will operate. This chapter explains the founder-level decision logic without generic clichés.
The structure affects liability exposure, the ownership framework, tax treatment, operational flexibility, investor readiness, filing burden, and banking and contracting practicality.
Entity choice should follow business logic, not online mythology.
The simplest operating path for one person with a small or early business.
Typically suitable when: one founder is testing a small business, the model is simple, risk is limited, and there is no investor or ownership complexity.
Main weakness: no liability separation; structurally too weak for scalable, higher-risk, or investor-oriented setups.
A formal business structure that is still practical and flexible. By default an LLC is "pass-through": profits are taxed at the owners' level, not at the company level. It can elect to be taxed as a corporation.
Typically suitable when: founders want liability separation and a cleaner operating structure, and the company is not clearly on a venture-backed path.
Main weakness: not every LLC fits every tax, funding, or growth scenario. Most venture investors will not invest in an LLC, and pass-through taxation can be awkward for non-U.S. owners.
Relevant when the business is intended for high growth, ownership and governance need formal structure, venture financing is realistic, or employee stock options are planned.
Main weakness: more formal burden, and profits are taxed at the company level and again when distributed.
Question 1: How real is the liability issue? If the business carries meaningful risk, the simplest structure stops being appropriate.
Question 2: Is this a small operating business or a venture-scale company? These are different paths with different founder logic.
Question 3: Will there be multiple founders or complex ownership? As ownership becomes more complex, the need for cleaner structure increases.
Question 4: Is outside investment a realistic path? Do not choose heavy structure based on imagined funding. But do not ignore structure if funding is actually part of the plan.
Question 5: How much complexity can the company absorb right now? A structure that is technically elegant but operationally heavy may still be wrong.
| Sole proprietorship | LLC | C corporation | |
|---|---|---|---|
| Best when | One founder, simple model, limited risk, no investors. | Cleaner structure with liability separation, not on a venture path. | High growth, formal governance, venture financing realistic. |
| Liability | Personal — the owner carries it directly. | Limited at company level. | Limited at company level. |
| Taxation | Owner's personal return. | Pass-through by default; can elect corporate tax. | Corporate tax, plus tax on dividends. |
| Investor readiness | Very weak. | Possible, but most institutional investors prefer a C corp. | Standard for venture financing, especially Delaware. |
| Founder tax upside | — | — | May qualify for QSBS gain exclusion. |
High-level founder view of the three most common U.S. early-stage structures.
Not always. It is stronger in many cases, but not every founder needs it immediately.
For venture-backed startups, a C corporation is the norm. For a small operating business, it can be unnecessary overhead.
Yes, and many companies do before a priced round. It costs legal fees and can have tax consequences, so do it deliberately.
Sometimes, if risk, scale, and complexity stay limited.
Not ideally. State choice and entity choice affect each other.
Choosing the structure before understanding what kind of business is actually being built.
Chapter 16 · United States
One of the most misunderstood founder decisions in the U.S. is state choice.
Many people hear "just incorporate in Delaware" and never ask the more important question: where will the company actually operate, hire, sell, contract, and pay taxes?
State choice should follow business reality, not founder folklore.
State choice affects the formation process, filing obligations, operating registrations, state tax exposure, local compliance, administrative burden, and in some cases investor expectations and legal predictability.
Not: which state sounds smartest? But: where will this company actually do business?
Recommended path: form where you operate. If the company clearly operates in one state, form there. It usually saves cost, complexity, and duplicate registrations.
Recommended path: a Delaware C corporation is still the default. Investors, lawyers, and standard financing documents are built around Delaware law. It should still be a reasoned decision, not a reflex.
Recommended path: separate four layers. Distinguish market entry, legal presence, tax identity, and operating footprint — each can imply different state and federal obligations. Many non-U.S. founders only need a U.S. entity once they raise from U.S. investors or hire in the U.S.
Delaware is right for many venture-backed companies. It is a poor fit if chosen without understanding where the business will really operate.
State logic should follow operating logic, not replace it.
The state of formation is rarely the only relevant state in the life of the business.
For many founders, the right state is the one that reflects operating reality and minimises unnecessary complexity. For venture-oriented companies, Delaware is usually the right answer — as a reasoned decision.
No. It is the standard for venture-backed corporations, but not an automatic default for every business.
For a small operating business, often yes. For a venture-backed startup, usually Delaware plus registration in your operating state.
Yes. It can materially affect setup cost and ongoing obligations.
Yes, but you will usually need to register as a foreign company in the operating state too.
Not as an early-stage startup without specific advice. The debate is mainly about large, controlled public companies.
Treating it like a trend decision instead of an operating decision.
Chapter 17 · United States
Many founders think the hard part is finished once the company exists on paper. In the U.S., that is often only the beginning.
Once structure and state are clear, founders need to handle tax identity, licenses, permits, bookkeeping, banking, insurance, and ongoing compliance. Treat them as early operating requirements, not late-stage cleanup.
A business can exist formally and still be unusable in practice. That happens when founders do one thing well — formation — and leave five others half-finished:
The EIN is the federal business tax ID issued by the IRS. It matters for tax setup, business banking, payroll and hiring, and basic administrative identity.
Apply early. With a U.S. Social Security Number, the IRS online application gives you an EIN the same day. Without one, use Form SS-4 by fax or mail, or apply by phone as an international applicant — expect days to weeks.
Licenses and permits can sit at several levels. Depending on the business, consider:
Do not guess. Recognise that this layer exists and check it for your state, county, and city.
Founders often assume they can open the business bank account the day formation is complete. Delays happen because:
Once the company is real, money, records, and obligations matter immediately: invoice handling, expense tracking, document retention, tax reserves, and recurring filing logic. If you sell to customers in several states, check sales tax obligations early — they can apply even without a physical presence once you pass a state's sales threshold.
Depending on the business model, risk arises around general liability, professional liability, employer obligations, and cyber and data exposure.
Formation is one event. Compliance is a system. Plan for recurring filings, tax returns and payments, permit renewals, payroll obligations, recordkeeping, and updates when address, ownership, or operations change.
In almost all practical cases, yes. Banks require one, and so do payroll and corporate tax filings.
No. Depending on location and activity, small businesses may also need permits.
You can, but that is how founders create preventable tax, cash flow, and documentation problems.
Not always. Banks need the EIN, formation documents, ownership information, and a coherent setup.
No. Formation is one event. Compliance is ongoing.
Believing that the entity existing on paper means the company is ready to operate.
Chapter 18 · After you form
Not every company needs outside money. Many good businesses are built on revenue, grants, or founders' savings. But if you do raise, the first money shapes everything after it: who owns the company, who has a say, and what you have promised.
This chapter covers the early instruments, how dilution works, and how to give your team a stake.
Raise when money buys something specific — speed to a milestone that makes the company much more valuable, a hire you cannot otherwise make, or inventory you must pre-finance. Do not raise because it feels like progress.
Typical early funding sources, roughly in order:
Investors buy new shares at an agreed valuation. Clean and clear, but it requires a valuation, more legal work, and — in Switzerland and Germany — a notarised capital increase.
A loan that converts into shares at the next priced round, usually with a discount (often 10–25%) and a valuation cap. The standard pre-seed instrument in Switzerland and Germany because it postpones the valuation discussion and needs no notary at signing.
A "simple agreement for future equity" — the U.S. standard for early rounds, published by Y Combinator. Like a convertible loan, it converts at the next round, but it is not debt: no interest, no maturity date. The post-money SAFE makes it clear how much of the company investors will own after conversion. SAFEs are designed for U.S. corporations and do not translate one-to-one into Swiss or German law.
When you issue new shares, everyone's percentage shrinks — but ideally the company is worth more, so each share is worth more.
Example: two founders own 50% each. An angel invests at a valuation that gives them 10%, and a 10% employee pool is created. Each founder now owns 40%. After a seed round in which investors take 20%, each founder owns 32%.
Rules of thumb for early rounds:
Early employees take a risk and a lower salary. Equity lets them share in the upside — and it keeps the team aligned with the owners.
For a Swiss or German company, a convertible loan is the usual pre-seed instrument. For a U.S. C corporation, the post-money SAFE is. Priced rounds are the norm from seed or Series A.
Enough to reach the next meaningful milestone plus a buffer — typically 12 to 24 months of runway.
Whatever lets you reach the next round with room to grow into it. An inflated valuation can make the next round painful.
Often 10–15% before seed, sized to the hires you actually plan in the next 18–24 months.
Virtual plans are simpler to run; real shares or options can be more tax-efficient, especially under Germany's §19a. Decide with a tax advisor.
Chapter 19 · Reference
Plain-English definitions of the founder, legal, and tax terms used in this Bible. Underlined terms in the chapters link here — hover or tap them for a quick definition.
A filing with the IRS, within 30 days of receiving stock that vests over time, that lets you be taxed on its value today instead of as it vests. There is no extension and no fix if you miss it.
Swiss company limited by shares (Aktiengesellschaft). Minimum share capital CHF 100,000, of which at least CHF 50,000 must be paid in. Shareholders are not published; a board of directors is required.
Switzerland's old-age and survivors' insurance, collected together with disability (IV) and income-compensation (EO) contributions. Self-employed founders register with their cantonal compensation office; employers and employees split contributions on salaries.
The founding charter of a capital company. Defines name, seat, purpose, share capital, share structure, and governance rules.
The natural person who ultimately owns or controls a company — in Switzerland and for FinCEN purposes, typically anyone holding 25% or more of capital or votes, or controlling it otherwise.
Beneficial ownership information report to FinCEN under the Corporate Transparency Act. Since August 2026 only required for foreign companies registered to do business in a U.S. state — not for companies formed in the U.S.
How the business creates and captures value — what is sold, to whom, at what price, with what cost structure, and through which channels.
Internal rules of a U.S. corporation governing meetings, officer duties, share procedures, and decision-making.
A U.S. corporation taxed separately from its owners. The standard structure for venture-backed startups because it supports preferred share classes, stock options, institutional investors, and QSBS.
The table showing who owns which shares and options in the company, before and after each round. Investors will ask for it first.
A clause in the articles of a Swiss AG or GmbH that lets the board raise or reduce capital within a set range for up to five years without a new shareholder vote each time.
The capital founders pay in at formation in exchange for ownership. Swiss GmbH: CHF 20,000, fully paid. Swiss AG: CHF 100,000, at least CHF 50,000 paid. Since 2023 it can be denominated in EUR, USD, GBP, or JPY.
A blocked bank account into which the share capital of a new GmbH or AG is paid before the notary appointment. The bank's confirmation is part of the formation documents; the funds are released after registration.
The official cantonal registries of companies, searchable nationally via Zefix. A GmbH or AG comes into existence when it is registered. Sole proprietorships must register once annual revenue reaches CHF 100,000.
A loan (Wandeldarlehen) that converts into shares at the next priced round, usually at a discount and subject to a valuation cap. The standard pre-seed instrument in Switzerland and Germany.
"Doing business as" — a registered trade name used by a U.S. business to operate under a name different from its legal name. Filed at state or county level.
The reduction in an owner's percentage when the company issues new shares. Acceptable if the company's value grows faster than the percentage shrinks.
A clause allowing a large majority of shareholders to require all others to join a sale of the whole company on the same terms.
Employer Identification Number — the federal tax ID issued by the IRS. Needed for business banking, hiring, and federal tax filings. Founders without an SSN apply with Form SS-4.
Equity reserved for current and future employees, often 10–15% of the company, granted as shares, options, or virtual shares.
U.S. tax obligations administered by the IRS, separate from state tax. Includes income tax, payroll tax, and self-employment tax.
Registering a company formed in one U.S. state to do business in another state where it operates — for example a Delaware corporation with its office in California.
An annual IRS information return required for single-member LLCs owned by a non-U.S. person and for many foreign-owned U.S. corporations. Penalties start at $25,000.
A written agreement between co-founders covering equity split, vesting, IP assignment, roles, decision rights, and exit logic.
An annual state tax for the privilege of existing as a company in that state. Delaware's default calculation can look alarming for startups; the assumed par value capital method usually lowers it.
Swiss limited liability company. Minimum share capital CHF 20,000, fully paid in. Liability limited to company assets; members are listed in the commercial register.
Rules deciding the price at which a departing founder's or employee's shares are bought back — fair value for good leavers, often nominal value for bad leavers.
Intellectual property — code, content, designs, brand marks, patents, trade secrets. Should be assigned to the company in writing, including anything created before formation.
Legal responsibility for debts and obligations. Sole proprietors are personally liable; owners of a GmbH, AG, LLC, or corporation are generally protected beyond their capital contribution.
An investor's right to get their money back (1× is standard) before other shareholders when the company is sold or wound up.
Limited liability company — a flexible U.S. structure that combines liability protection with pass-through taxation by default.
The international trademark system run by WIPO: one application through your home office can extend protection to many countries.
The German statutory model protocol for forming a GmbH or UG with up to three founders and one managing director. Cheaper, but leaves no room for vesting or transfer rules.
The international system of 45 classes of goods and services used to register trademarks. Software is typically class 9, SaaS class 42.
A public officer who notarises the formation deed of a Swiss GmbH or AG. Formation by public deed remains mandatory for capital companies.
A meaningful change in the business — different problem, audience, value proposition, or business model — based on what validation revealed.
The filing date of your first trademark application. Within six months you can file in other Paris Convention countries and keep that date.
Qualified small business stock (Section 1202). For qualifying C-corporation stock issued after 4 July 2025: 50% of the gain excluded after 3 years, 75% after 4, 100% after 5 — up to $15 million per issuer.
A person or service with an address in the state of formation that accepts legal documents on the company's behalf. Required in every U.S. state.
Simple agreement for future equity — the Y Combinator instrument for early U.S. rounds. Converts into shares at the next priced round; not debt, no interest, no maturity.
The simplest business form — one individual operating in their own name, with no separate legal entity and full personal liability.
U.S. tax administered at state level, including state income tax, franchise tax, and sales tax. Varies widely by state.
A registered sign protecting a brand name or logo for specific classes of goods or services in a specific territory, usually for ten-year renewable terms. Independent of company-name registration and domain ownership.
Register of beneficial owners. Switzerland: non-public federal register in force since 1 October 2026 for GmbHs, AGs, and most other legal entities (25% or more). Germany: the Transparenzregister, where every GmbH and UG must actively report owners above 25%.
German "mini-GmbH" with €1 minimum capital. 25% of annual profit must be retained until the reserve reaches €25,000.
The Swiss enterprise identification number (CHE-123.456.789) assigned on registration and used for VAT and official dealings.
Structured testing of the riskiest assumptions behind an idea — the problem, the audience, the offer, and willingness to pay.
The maximum valuation at which a convertible loan or SAFE converts into shares, protecting early investors if the next round is priced high.
Value-added tax on most goods and services. In Switzerland, registration is mandatory from CHF 100,000 of worldwide taxable revenue per year; the standard rate is 8.1%. EU thresholds and rates vary by country.
A schedule under which founder or employee equity is earned over time, typically four years with a one-year cliff.
Virtual stock option plan — employees receive a cash payout tied to the company's value at exit, taxed as salary, without becoming shareholders.
The strongest signal in early validation — whether someone will actually pay, sign, or commit, not just say something sounds interesting.
The central index of Swiss commercial register entries. The first place to check whether a company name is already taken.
No term matches that search.
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Chapter 01 · Start here
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Before you form
Swiss legal forms
Switzerland
Germany (EU)
United States
After you form
Reference
Liftoff doesn't start with a registration number. It starts with the right starting point — and the right starting point begins with one simple question: where are you on the flight plan right now? Do you only have an idea, are you validating, are you ready to form a company, or have you already formed one and now need to clean up your setup?
This chapter helps you classify yourself, shows the next logical leg of the trajectory, and prevents you from moving too early into legal formalities or too late into validation.
Many founders start at the wrong point. They first search for legal forms, capital requirements, notaries, or registration, even though they still do not know whether their idea is commercially viable. Others stay too long in the idea phase and never formalize, even though validation already points to a real market.
So the first question is not: which legal form do I need?
The first question is: what stage am I actually in?
This is your entry point if you have observed a problem, have a rough business idea, do not yet know whether customers really need it, do not yet have a clear positioning, and are not yet sure whether you should even form a company.
Your next step is not formal company formation. Your next step is validation: test the problem, the target audience, the value proposition, and willingness to pay.
This is your entry point if you already have a clearer idea, want to run first customer conversations, want to test a landing page, want to sharpen your audience and business model, and want to decide whether to move forward or stop.
You do not need abstract theory. You need a concrete validation plan.
This is your entry point if you already have a validated or sufficiently credible idea, know what you want to sell, have customers, pilot customers, or at least strong demand signals, and now need to clarify country, legal form, capital, registration, taxes, and setup.
You are in the formation stage.
This is your entry point if you are already registered or already operating, but still have open setup questions, and have not yet handled bookkeeping, VAT, social insurance, business banking, contracts, or privacy properly.
You no longer need ideation guidance. You need operational discipline.
Right if you are still early. Follow this sequence:
Right if the core idea is already taking shape. Typical next steps:
Right if you are ready to form or have just formed. Typical topics:
This page is not meant to overload you with 30 topics at once. It routes you into the right next step.
Not useful:
These topics are usually most relevant first:
You do not start "in the EU" in the abstract. You start in a specific country. The EU is a legal and economic framework; the actual formation process follows national law. So you first need to clarify in which country you want to form the business, where you live, where your customers are, whether local presence is required, and how tax, VAT, and registration obligations work.
This edition covers Germany as the worked EU example (chapter 13). For any other EU country, use the same sequence — validation, name, domain, legal form, founder setup — and check the national rules with a local advisor.
You do not start "under one U.S. system." Formation is mainly state-based, while tax IDs, federal tax topics, and parts of compliance sit at the federal level.
So you first need to clarify in which state you want to form the business, where founders live and operate, where customers are located, whether you are building a small operating business or a venture-scale company, whether an LLC, corporation, or sole proprietorship fits your model, and whether you need an EIN, licenses, permits, or state tax registrations early.
If you are building next to a full-time job, you often need validation and a lean setup first. But you also need to think about employment contract restrictions, confidentiality obligations, and intellectual property conflicts.
If more than one person is involved, you need early clarity on roles, equity, vesting, decision rights, and IP ownership. Otherwise the biggest future problem may not be incorporation. It may be founder conflict. Chapter 07 covers the founder agreement in detail.
If you aim at investors, enterprise clients, or regulated customers, you need to think earlier than others about structure, liability, privacy, IP, governance, and compliance.
No. Before you choose a legal form, you should first understand the problem, the target audience, and the business model well enough.
As soon as a name becomes a serious option, secure the domain. But that never replaces validation.
When it is clear what you are selling, to whom, how money will be made, and why a formal structure now makes practical sense.
That depends on risk, scale, capital, external credibility, and team structure. It should not be decided in isolation.
No. In Europe, you always form in a specific country under national law.
No. In the United States, formation is mainly state-based, while several tax and compliance elements also sit at the federal level.
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Chapter 02 · Start here
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A company does not begin with a registration number. It begins with a credible idea. Anyone who wants to build properly should move in a clear sequence: idea, validation, business model, name, domain, country or state choice, legal form, founder setup, formation documents, registration, tax and insurance setup, bookkeeping, contracts, and operational readiness.
This chapter shows the full process and where each decision belongs.
At the start is not the product, but the problem. Answer clearly: what problem are you solving, for whom, how urgent it is, why it is commercially relevant, and why you are in a position to solve it.
OutputClear problem statement, rough target audience, first value hypothesis
Not everyone who could theoretically have the problem is a real customer. Distinguish between affected users, actual users, decision makers, and buyers.
OutputFirst persona or audience segments, clear assumptions about needs and purchase logic
Test whether the idea is actually viable. Useful methods: customer interviews, offer conversations, landing page test, mockup or clickable concept, willingness-to-pay test, competitor review.
OutputCredible signals that the problem is real, first signs that people might pay
Not every idea deserves a company. After validation, decide explicitly: move forward, adjust positioning, change the business model, or stop the idea.
OutputA documented decision and the evidence behind it
Before forming a company, you need to know how the business makes money. Examples: one-time sale, subscription, service fees, licensing, commission, marketplace fee.
OutputRough monetization logic, first pricing assumptions
The company name is not just taste. It influences brand, domain, positioning, and later scalability. Check memorability, pronounceability, digital usability, breadth, and risk.
OutputNarrowed name shortlist, preferred option
As soon as a name becomes a serious candidate, secure the relevant domain. Check the primary domain, relevant variants, country domains, and defensive variants.
OutputSecured domain base
A free domain does not mean the name is safe from a trademark perspective. At least clarify whether identical or highly similar marks exist in your classes and markets, and whether there is obvious collision risk.
OutputFirst risk assessment (chapter 05 shows how)
If you want to start in Europe, choose a specific country. In the U.S., choose the right state logic. In Switzerland, still check residence, tax, and operating logic.
OutputClear formation jurisdiction
Now comes the legal form. Not before. Typical questions: liability protection, investor readiness, capital availability, founder count, administrative weight you can carry.
OutputChosen legal form, reasoned decision
As soon as more than one person is involved, the rules must be clear: roles, responsibilities, ownership, vesting, decision rights, IP ownership, conflict and exit logic.
OutputFounder setup, documented in a written founder agreement (chapter 07)
Define what is needed for formation and early operations: formation capital, liquidity reserve, business bank account, formation costs, notary or filing costs, accountant or tax advisor.
OutputRealistic startup budget
The legal act of formation. Depending on jurisdiction and legal form, this includes articles, bylaws, or company agreement; capital contribution; notary or filing steps; commercial register or state registration; tax or ID registrations.
OutputLegally existing company or properly registered business activity
After formation, the company is not finished. Set up bookkeeping, invoicing, VAT or sales tax, social insurance or payroll, document handling, tax reserves, business insurance — and any beneficial-owner reporting that applies.
OutputOperationally credible base setup
Now the business must function in the real world: customer contracts, terms and conditions, privacy rules, contractor or employment contracts, banking signatory logic, document storage, internal processes.
OutputLaunch-ready business
Formation is not the end. It is the beginning of ongoing obligations: recurring filings, tax returns, permit renewals, payroll obligations, corporate records, governance updates.
OutputA company that remains legally and operationally usable over time
Not every founder needs the full process in maximum depth.
Possible when you start alone, risk is low, the offer is simple, and no investors, employees, or major liability topics are in play.
Needed when several founders are involved, meaningful risks exist, B2B customers expect professionalism, investors or ownership complexity matter, or the business has to look structured from day one.
Many founders formalize too early and bind capital, time, and energy even though demand and willingness to pay are still unclear.
Others already sell, work in teams, or take on real obligations, but still have no clean setup for ownership, contracts, bookkeeping, or registration.
The process looks big, but it becomes manageable when sequenced properly.
Not the legal form. The first step is clarity around the problem, target audience, and value proposition.
No. But you should ideally have credible signs that demand exists.
As soon as a name becomes a serious candidate.
As soon as multiple people are building together — even before formation, if the project is becoming real.
Yes. Not down to the last detail, but enough to avoid building a chaotic setup.
Partly, yes. But for sensitive topics like tax, registration, trademark risk, state-based U.S. issues, or company law, expert review is often worth it.
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Chapter 03 · Before you form
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Validation is the pre-flight check for your idea. It does not mean that friends tell you your idea sounds good. Validation means you test with a real target audience whether the problem matters, whether your offer is understood, and whether people are willing to give attention, data, time, money, or serious engagement.
A clean pre-flight check saves months of runway and prevents you from launching a company around a problem nobody needs solved badly enough.
Validation is the structured attempt to test the riskiest assumptions behind your idea.
Typical assumptions include:
Validation is not a feeling. It is a test process.
Formal formation costs time, money, and mental energy. The bigger cost, however, is spending six months building something that never had real demand.
Validation helps you:
Tests whether the problem is real, frequent, and painful enough in the target audience. Guiding questions: does the problem really occur in practice, how is it solved today, how frustrating is the current situation, what does the problem cost in time, money, or risk?
Tests whether you are speaking to the right audience. Not every affected person is automatically a realistic buyer.
Tests whether your proposed approach is understandable and attractive. Does the user understand the offer? Does it sound relevant? Would they try it? Where is resistance or confusion?
Tests whether interest also has economic meaning. People often say something sounds interesting. That does not mean they would buy.
The best early method when clarity is still low. Goals: understand the language of the target audience, find patterns, understand problems, frustrations, and substitute solutions. Ask about past behaviour ("when did this last happen, what did you do?"), not hypothetical futures ("would you use…?").
Useful when you want to test value proposition and demand. Goals: measure first attention, collect conversion signals, compare statements with behaviour.
Useful when you want to make a proposed solution tangible enough to test. For hardware ideas, a pre-order or reservation page does the same job.
Especially powerful in B2B. If you speak directly about a possible offer, you quickly see whether the problem is commercially meaningful.
Essential if you want to build a real business, not just generate curiosity.
Not everything must become a spreadsheet immediately, but you do need criteria — and you should write them down before you start, so the results cannot quietly move the goalposts.
Examples:
Define the problem clearly. Define the target audience. Build the interview guide. Write down your success criteria.
OutputProblem statement, audience hypothesis, interview script, pass/fail criteria
Run 5 to 10 customer interviews. Cluster responses. Look for patterns in language, frustration, and current substitutes.
OutputPattern map, sharpened pain points, refined audience
Adjust the value proposition based on what you heard. Build a simple landing page or offer page that puts the offer in front of people.
OutputLive offer page, value proposition v2
Measure reactions against the criteria you set in week 1. Collect more feedback. Make a Go, No-Go, or Pivot decision based on actual signals — not on attachment to the idea.
OutputA documented Go / No-Go / Pivot verdict
There is no magical threshold. But an idea becomes much more credible when:
Critical signals include:
Many founders hide behind endless validation. That is also a mistake. Validation is meant to lead to a better decision, not permanent hesitation.
No, but they are a good start. The quality and relevance of the interviewees matter as much as the number.
It is not one or the other. Interviews help you understand early. Landing pages help you test messaging and demand later.
No. Early on, a clear problem, a credible offer, and a test setup are often enough.
When you have enough evidence to move forward with acceptable risk — not when every uncertainty has disappeared.
Where appropriate, yes. Real buying or pilot interest is one of the strongest forms of validation.
When people find the topic interesting but nobody takes meaningful action.
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Chapter 04 · Before you form
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A company name is not a harmless creative exercise. It affects positioning, memorability, searchability, domain strategy, trademark risk, and in some cases even trust.
A strong name is memorable, flexible, digitally usable, and legally workable. A weak name can cost visibility, clarity, and expensive changes later.
Founders often discuss names in a purely subjective way. That is a mistake.
A name does not just need to be liked. It needs to work: be memorable, be pronounceable, work in search and digital channels, not be confused with others, fit the positioning, and work together with domain and trademark logic.
A good name sticks. If someone hears it once, they should be able to recall it later.
If people do not know how to say it or spell it, you lose discoverability and word-of-mouth.
Can people type it, search it, remember it, and use it as a URL?
The name should fit your market, audience, and level of ambition.
A name should not box you into a tiny corner that becomes restrictive later.
A name that obviously imitates an existing brand is not clever. It is a liability.
Before brainstorming, clarify who the company is for, what tone the name should carry, whether it should feel factual or warm, whether you want a brand name or descriptive name, and whether it should work locally or internationally.
OutputNaming brief — audience, tone, scope, ambition
Typical directions: descriptive, metaphorical, invented or abstract, personified, modern functional, strongly conceptual. Not every direction fits every business.
OutputTwo or three directions to explore
Generate enough options. Do not evaluate too early. Aim for breadth, not perfection.
OutputLonglist of 30 to 60 candidates
Remove names that are too generic, hard to spell, too close to existing brands, unclear or weak, or too narrowly tied to one product version.
OutputShortlist of 5 to 10 serious candidates
How does the name sound when said aloud? In a pitch? On a website? Could someone spell it without asking twice? Does it mean something unfortunate in your key languages?
OutputTop 2 to 3 finalists
Only now does creative work become a real candidate. Check company registers, every relevant domain variant, and trademark databases before you commit.
OutputOne name with confirmed digital and legal viability
A quick self-check is a start, not clearance. Chapter 05 explains how to search, file, and budget for a trademark.
Advantages: potentially differentiated, more ownable over time. Disadvantages: requires more brand-building effort.
Advantages: conveys mood or direction, often easier to remember than generic descriptions. Disadvantages: can sound weak or clichéd if badly chosen.
Advantages: quick to understand. Disadvantages: often weaker from a trademark perspective, less differentiated, sometimes forgettable.
Yes, early startups can rebrand. But every rebrand costs trust, traffic, brand consistency, domain and email migration effort, and market clarity. That is why naming deserves serious attention before launch.
That depends on your positioning, market, and audience. Descriptive is not automatically better.
Not always, but the overall domain strategy needs to make sense.
Not necessarily. Depending on the strategy, company and product can have different names.
That is risky. Similarity and confusion risk should be checked carefully.
No. A register entry and a trademark are different things. The register protects the company name in its own context; a trademark protects the brand for specific goods and services.
Clarity usually wins. Creativity without usability rarely becomes an advantage.
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Chapter 05 · Before you form New
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Your company name, your domain, and your trademark are three different things. The commercial register stops someone from registering an identical company name. A domain gives you an address. Only a trademark gives you the right to stop others from using a confusingly similar brand for similar products — and only a trademark check tells you whether you are the one infringing.
Most early founders do not need an expensive trademark strategy. But they do need to avoid building a brand on a name they cannot keep.
A trademark protects a sign — a word, a logo, sometimes a slogan — for specific goods and services, in specific territories.
List your core products and services and map them to classes. Be precise but not narrow: include what you will realistically offer in the next few years.
OutputTwo to four relevant classes
Search for identical and similar marks in your classes and target markets: Swissreg for Switzerland, EUIPO eSearch for EU trademarks, TMview for many national offices at once, and the USPTO search system for the U.S. Look for similar spelling and similar sound, not just exact matches.
OutputConflict list with a risk rating per hit
File where you sell, where you will sell soon, and where you manufacture or build. Most early startups start with their home market plus the EU or U.S. — not the world.
OutputFiling plan by territory
File the word mark first — it protects the name regardless of logo design. Add a logo mark later if the logo becomes a real asset. Use the offices' own product and service lists to avoid surcharges and objections.
OutputFiled application and filing date (your priority date)
Diarise renewal dates, use the mark consistently, and watch for copycats. Registration you never enforce loses value.
OutputRenewal calendar and a simple watch routine
When you file in one Paris Convention country (Switzerland, the EU, and the U.S. are all members), you have six months to file in other countries with the same priority date. Filing at home first and deciding on other markets within six months is a cheap way to keep options open.
This is also why descriptive names are weak brands: they are hard or impossible to protect.
| Company name | Domain | Trademark | |
|---|---|---|---|
| What it gives you | Legal name in the register | A web address | Exclusive right to the brand for your goods and services |
| Territory | The register's jurisdiction | Global, first come first served | Per country or region |
| Stops copycats? | Only identical company names, in that register | No | Yes, within its classes and territory |
| Protects you from infringing? | No | No | Only if you searched before filing |
Not legally. But you should at least search before you commit to a name, and file for your core brand before you spend real money on it.
Your home market first, then the market that matters next. Use the six-month priority window to decide.
The company. If a founder filed before formation, assign it to the company in writing.
™ can be used for any mark you claim. ® may only be used once the mark is registered — using it earlier is misleading and in some countries illegal.
Switzerland and the EU often register within a few months if there is no objection or opposition. The U.S. typically takes a year or more.
Filing is possible without one. For your core brand, a professional search and filing strategy is usually worth the cost.
Official registers and authorities to check for current rules:
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Chapter 06 · Before you form
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A domain is not a side detail. It is often the digital base of your brand, website, and communication.
If you wait too long, you may lose the strongest address or end up with expensive compromises later. A good domain strategy starts as soon as a name becomes a serious candidate, not after registration. At the same time, a free domain never replaces trademark review, legal form choice, or jurisdiction decisions.
The domain influences discoverability, credibility, email setup, brand consistency, and marketing efficiency.
If the domain does not fit the name, it creates friction. People remember you less easily, links become less clear, and later changes become costly.
Not after formation. Earlier. The right time is usually:
Your main domain. It should match the company or product as closely as possible.
Useful if you want a strong local market signal, such as .ch.
Often .com, if you want broader international readability and scale.
Relevant typo versions or alternate forms you secure for protection.
Which domain should be the long-term home of the company? This is the anchor everything else supports.
OutputOne primary domain candidate
Examples: .ch, .com, with or without hyphen, full name or shortened version. Identify which variants are realistically available.
OutputVariant availability map
Do not buy every possible variant. Focus on the main domain, directly relevant variations, and meaningful defensive variants.
OutputBuy list with 1 to 4 domains
A free domain never means the name is legally clean. Check for trademark conflict before you commit.
OutputRisk-checked candidate
Does the domain look professional? Does it work in email addresses? Is it easy to read? Is it robust across languages?
OutputA domain that holds up at scale
Strong if your market is Switzerland and local trust matters. Anyone can register a .ch domain through an accredited registrar.
Useful if you aim internationally, but often harder to secure.
Can be strategically interesting for a Europe-oriented business — but eligibility is restricted. You need EU citizenship, or residence or an establishment in the EU/EEA. A Swiss company without an EU presence cannot hold a .eu domain in its own name.
If the United States is a major market, the question is not only whether a .us domain exists (it requires a U.S. nexus), but whether the main brand should live on .com, a country-coded domain, or another route.
The stronger question is: what domain structure best supports how customers will discover, trust, and remember the brand?
Yes, often that is the right move. The domain is not proof of formation. It is a digital asset.
Not always, but in most serious cases it is smart once the name is becoming real.
Often yes, if the main domain is strong. In some cases two or three versions make sense.
That depends on the market. For a Swiss focus, .ch can be strong. For broader international use, .com is often attractive.
Digitally, yes. Legally, not automatically.
Where possible, yes. Hyphens make communication harder.
Ideally the company or a clearly controlled organizational account, not an unmanaged private account.
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The most common reason early startups fail is not the legal form, the tax setup, or even the market. It is founder conflict. And most founder conflict starts with things nobody wrote down: who owns what, who decides what, and what happens when someone leaves.
A founder agreement does not prevent disagreement. It decides in advance how disagreements end.
As soon as two or more people are building something together — even before formation. Once there is real work, real IP, or a real chance of value, you need clarity in writing.
The articles of association or bylaws do not replace it. They cover the company's formal structure. The founder agreement covers the relationship between the owners.
Who owns how much, and why. Base it on expected future contribution, not on who had the idea. Equal splits are fine when contributions are genuinely comparable; they are dangerous when used to avoid a hard conversation.
Founders earn their equity over time. The market standard is four years with a one-year cliff: nothing vests in the first twelve months, then 25% vests, then the rest monthly or quarterly. If someone leaves after four months, they do not walk away with a quarter of the company.
What happens to a departing founder's shares?
Who does what, who is full-time, and what counts as enough commitment. Write down what happens if someone stays part-time longer than agreed.
Which decisions need a simple majority, which need a supermajority (for example 75%), and which need unanimity. Typical supermajority items: new shareholders, capital increases, employee equity pools, selling the company.
With two 50/50 founders, every disagreement can become a deadlock. Agree on the mechanism in advance: an advisor or board member with a casting vote, mediation, or as a last resort a buy-sell clause.
Everything each founder built for the project — code, designs, brand, domains, content — belongs to the company. Include work created before formation, and assign it in writing once the company exists.
Reasonable restrictions while a founder is involved and for a limited time after. Keep them proportionate — overly broad non-competes may not be enforceable.
Agree early whether and how an employee pool (often 10–15%) will be created and who is diluted by it. Chapter 18 goes deeper.
The document is the easy part. The conversation is the hard part. Before any lawyer drafts anything, sit down and answer together:
If you cannot agree on these now, you will not agree on them later under pressure.
Especially then. It protects the friendship as much as the company.
Usually not much more. Ideas are cheap; execution over years is what creates value.
No. It is standard, and investors will expect it. It protects the founders who stay.
Yes, with everyone's agreement. It gets harder — and more expensive for taxes — the more the company is worth.
Once you have agreed the key points among yourselves. Templates are a good starting point, but have a lawyer in your jurisdiction review the final document.
Treat it as a signal. It is far better to find out now than after the company has value.
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Chapter 08 · Swiss legal forms
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Anyone starting a company in Switzerland will, in practice, usually decide between three legal forms: sole proprietorship, GmbH, or AG.
The right choice depends on liability, capital, team structure, external credibility, growth plans, and administrative burden — not on prestige.
The legal form influences liability, capital needs, external perception, ownership logic, complexity of formation, and part of the administrative burden.
If you choose the wrong legal form, you often pay twice later.
The leanest form for an individual founder. Simple structure, no separate legal entity, and the founder is personally liable with private assets. Often useful for lean solo starts.
Typically suitable for freelancers, consultants, small service businesses, and early testing stages.
Often the standard legal form for small and medium-sized businesses in Switzerland. A separate legal entity with liability limited to company assets, share capital, a more formal setup, and a more professional external position.
Typically suitable for small businesses, agencies, SaaS and digital companies, and teams with clearer ownership logic.
The more formal and more capital-heavy structure. A separate legal entity, higher capital requirements than a GmbH, more formal governance, and often more investor-oriented.
Typically suitable for growth-oriented companies, ambitious ownership structures, and funding expectations.
Question 1: How large is the liability risk? If the business carries significant risk, personal exposure becomes a real issue.
Question 2: Are you starting alone or as a team? Solo starts are often simpler. Teams need cleaner structure earlier.
Question 3: How important is external credibility? Some customers, partners, and investors expect a more formal company form.
Question 4: How much capital is realistic? Capital companies require more structure and more capital.
Question 5: How likely are investors or later ownership rounds? That is one of the main reasons the AG becomes relevant.
Question 6: How much administration do you realistically want? Not every business needs the heaviest structure from day one.
| Sole proprietorship | GmbH | AG | |
|---|---|---|---|
| Best when | You start alone, risk is limited, you offer a simple service, you want to test leanly. | You want liability limitation, a team setup, a professional legal vehicle. | Investors are realistically part of the path, ownership will become advanced, governance matters early. |
| Liability | Personal — the founder carries it with private assets. | Limited to company assets. | Limited to company assets. |
| Minimum capital | None. | CHF 20,000, fully paid in. | CHF 100,000; at least CHF 50,000 (and 20% of each share) paid in. |
| Owners public? | Yes — the owner is the business. | Yes — members are listed in the commercial register. | No — shareholders are not published. |
| Formation | Register entry required above CHF 100,000 annual revenue; voluntary below. | Public deed before a notary, then commercial register. | Public deed before a notary, then commercial register. |
| Strengths | Fast, simple, cost-efficient. | Balance of structure and practicality. | Formal, credible, investor-friendly. |
| Weaknesses | Personal risk, weak scaling logic. | Capital requirement, less lean. | More capital and formality; often too heavy early. |
High-level comparison. Use it as a starting frame, not as a substitute for case-specific review.
Many founders are attracted to the AG because it sounds bigger. That is not a valid decision principle.
The real question is not: which form sounds the most impressive? The real question is: which structure fits risk, model, capital, and stage?
In early phases, often sole proprietorship or GmbH. The AG becomes more relevant when growth, investors, or more formal ownership structures matter.
No. It is often suitable, but stage and risk matter.
Yes — an existing business can be brought into a new GmbH or AG, and a GmbH can be converted into an AG. But it creates cost and friction and should not be treated as a free shortcut.
Often more attractive from an ownership and governance perspective, but many founders do not need it early.
Confusing prestige with fit.
The detailed chapters on sole proprietorship, GmbH, and AG, followed by the Swiss formation guide.
Official registers and authorities to check for current rules:
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Chapter 09 · Swiss legal forms
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The sole proprietorship (Einzelunternehmen) is often the simplest way for an individual in Switzerland to start operating. It is lean, fast, and well suited to many small service-based or solo setups.
It also has clear limits: personal liability, weaker scalability, and in some situations a less formal market perception. Simplicity has trade-offs.
A business run by one individual in their own name. There is no separate legal entity: the founder is the business, and business debts are personal debts. Compared with capital companies, it is lighter and easier to set up.
Typical examples: consulting, coaching, small agency work, creative services, small-scale retail, early solo digital offers with limited structural complexity.
No minimum capital, no notary, and no register entry below the revenue threshold.
It fits founders who do not need a heavy legal structure immediately.
Especially in the early phase, that can be an advantage.
This is the central point. If the business creates real liability risk, the founder carries it with private assets.
The sole proprietorship is built around one individual, not a multi-founder structure. Two people running a business together without an entity typically form a simple partnership (einfache Gesellschaft) — with joint personal liability — whether they intend to or not.
If equity, investors, or structured scaling become relevant, it quickly becomes limiting. There are no shares to give.
In some contexts a sole proprietorship is completely sufficient. In others, a GmbH or AG signals more structure.
Often a reasonable fit if scope and risk remain limited. Check your employment contract for non-compete and side-activity clauses first.
Usually a weak fit. Ownership and roles are better handled through a capital company.
Can be a sensible option if you want to test leanly and the risk is under control.
Even a sole proprietorship needs discipline: name, domain, bookkeeping, a separate business bank account, AHV and social insurance, VAT relevance, customer contracts, and privacy.
Usually yes — but cheaper is not the same as more suitable.
Yes. You then register as an employer with the compensation office and handle payroll deductions, accident insurance, and (above the threshold) occupational pension. The structure is still built around you personally.
Only once annual revenue reaches CHF 100,000. Below that, registration is voluntary.
Often yes. For many solo service businesses it is the natural option.
When liability protection, team structure, credibility, or growth logic matter more.
Possibly for a very early solo test. For larger ambitions, it is too limited.
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Chapter 10 · Swiss legal forms
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For many founders in Switzerland, the GmbH is the most practically important legal form. It offers a strong balance between liability limitation, professional credibility, and manageable complexity.
It is not a default answer to every situation. A GmbH requires capital, formal documents, and more structure than a sole proprietorship. For many small and mid-sized businesses, however, it is the most sensible middle ground.
The GmbH is a capital company with its own legal personality. It suits founders who no longer want to operate personally and informally, but who do not yet need the full weight of an AG.
Typical use cases: small and medium-sized businesses, agencies, multi-person consulting businesses, software and digital firms, and startups in early to mid-stage growth.
For many founders, the main reason. Company and founder are clearly separated.
Clearly more structured than a sole proprietorship, but lighter than an AG.
If more than one person is involved, the GmbH is much cleaner than an informal arrangement.
For many customers and partners, a GmbH signals seriousness and stability.
It is not the lightest structure for an ultra-lean test.
It requires preparation, proper documents, and administrative discipline. Transferring GmbH shares also requires a written contract and usually shareholder approval — fine for small teams, clumsier for frequent financing rounds.
If you are still in raw exploration, a GmbH may be premature.
More structure, clean separation between founder and company, stronger external credibility, less lean.
More accessible for smaller setups, usually a better fit for SMEs and many early startups, less heavy than an AG while still formal. Owners are public in a GmbH, private in an AG.
In many practical situations, yes. It is the natural middle ground between sole proprietorship and AG.
No. A single founder can form a GmbH. It is especially useful when more than one person or a formal structure is involved.
No. It is more structured and stronger on liability, but also heavier.
To a degree. Many Swiss startups raise early rounds as a GmbH and convert to an AG before a larger round.
Yes, but less lean than with a sole proprietorship. A GmbH is a conscious step into more structure.
Yes, but at least one person with signing authority must live in Switzerland, and you can sign the formation deed through a notarised power of attorney.
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Chapter 11 · Swiss legal forms
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The AG (Aktiengesellschaft) is the more formal and more capital-intensive company form in Switzerland. It becomes relevant when professionalism, ownership structure, governance, or investor readiness play a larger role.
For many early-stage founder projects, however, it is too heavy. Choose an AG for strategic reasons, not image reasons.
A capital company with a clear formal structure, higher capital requirements, and a professional market perception. Its strengths show where growth, financing, and ownership structure matter.
Typical use cases: growth-oriented startups, technology companies with larger ambitions, businesses with realistic investment paths, and setups with multiple owners and a structured ownership approach.
The AG is perceived as a strong formal structure.
For ownership rounds, financing, employee equity, and structured growth, the AG is more flexible.
The AG provides a formal governance framework with a board of directors.
If the company is not meant to stay small and local, the AG becomes relevant earlier.
The AG needs at least CHF 50,000 paid in, compared with CHF 20,000 for a GmbH.
Formation and ongoing governance are more demanding.
If the idea is not yet validated, an AG is rarely the right immediate answer.
The name sounds large and professional. That leads to the false assumption that an AG is automatically best for ambitious founders.
The better question is: do I actually need the advantages of an AG now? If not, the AG is early overhead.
The legal act of formation is only the start. The same operational realities still matter: bookkeeping, business bank account, VAT, contracts, privacy, operating processes, the share register, beneficial-owner reporting, and founder governance beyond the formation documents.
Not automatically. It is powerful for ambitious setups, but many ideas do not need it early.
Often yes, because of simpler share transfers, the capital band, and governance. But that only matters once investors are a real path.
Only with good structural reasons. For many early solo setups, it is unnecessarily heavy.
It is often perceived that way. Whether it is more suitable depends on the business case.
Yes — a GmbH can be converted into an AG under the Merger Act, keeping the same legal entity. It needs a notary, an audited conversion report (or a waiver in simple cases), and enough capital. It is work, but routine.
Forming it only because it sounds bigger.
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Chapter 12 · Switzerland
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Anyone who wants to start a company in Switzerland should set the sequence properly: idea and validation, naming, domain, legal form, founder setup, capital, and only then formal incorporation.
For most early-stage founders the relevant legal forms are sole proprietorship, GmbH, and AG. Beyond that, the commercial register, the transparency register, VAT, AHV, bookkeeping, business banking, and contracts are essential. This chapter gives the full Swiss overview.
Switzerland offers a stable business environment, reliable institutions, strong international positioning, and in some cases attractive cantonal tax conditions — combined federal, cantonal, and communal profit tax ranges from roughly 12% to 21% depending on the canton. It is not a low-cost startup jurisdiction. Plan both formally and financially with realism.
The rule is the same everywhere: do not form first. First test whether the offer is commercially relevant.
OutputDocumented Go / No-Go / Pivot decision
Check the name in Zefix (the central commercial register index) and in Swissreg for trademarks, then secure the domain.
OutputChecked name, secured domain
Most early-stage founders decide between sole proprietorship, GmbH, and AG.
OutputLegal form, reasoned decision
Draft the articles of association, open a capital deposit account (Kapitaleinzahlungskonto) at a Swiss bank, pay in the capital, and receive the bank's confirmation.
OutputDraft articles, capital confirmation
The founders — or their representative with a notarised power of attorney — sign the public formation deed before a notary. The notary or founders file with the cantonal commercial register. The company comes into existence on registration and is published in the Swiss Official Gazette of Commerce (SOGC).
OutputRegistered company, UID number
Release the capital to the operating account, then set up bookkeeping, AHV, VAT, insurance, contracts, banking, and beneficial-owner reporting.
OutputCompany ready to operate
Fees vary by canton and provider. Get a quote before you commit.
Suitable for: individuals, small businesses, service models, early market testing, simple structures.
Strong when: you start alone, risk is limited, little capital is needed.
Weaker when: you want liability separation, investors may matter, a formal business vehicle is needed.
Suitable for: SMEs, founder teams, agencies, software companies, advisory or product companies.
Strong when: liability should be limited, you want a clean legal entity, you can support CHF 20,000 of share capital.
Weaker when: you still need a very lean, uncertain test phase.
Suitable for: growth-oriented companies, investor-facing setups, formal governance requirements, larger funding ambitions.
Strong when: ownership and financing will become sophisticated, higher-level credibility matters, shareholder privacy matters.
Weaker when: you still need to test very leanly and the capital and administration are not yet justified.
The company name should be memorable, fit the business model, not be too narrow, work digitally, and align with trademark and domain logic.
Important: the commercial register and trademark law are separate systems. A name accepted by the register can still conflict with a registered trademark.
.ch is often the natural base.com can also make senseMany founders focus only on the commercial register. But social insurance matters just as much. Self-employed founders register with the cantonal compensation office. As soon as a GmbH or AG pays salaries — including to the founders — it must register as an employer, handle AHV/IV/EO and unemployment insurance deductions, take out accident insurance, and join an occupational pension fund once salaries exceed the threshold.
VAT registration is mandatory once worldwide taxable revenue reaches CHF 100,000 per year; voluntary registration below that is possible and sometimes useful. The standard rate is 8.1% (reduced rates 2.6% and 3.8%). Parliament has approved a rise to 8.5% from 2028 to fund the 13th AHV pension, subject to a popular vote.
Even small businesses create problems later when receipts, cash flow, and invoicing are handled badly from the start. GmbHs and AGs must keep full double-entry books.
If several people are involved, early written clarity matters: equity, vesting, roles, decision rules, IP, and exits. The articles of association do not cover this.
Especially for digital products, agencies, software, and AI-driven businesses, it must be clear who owns code, content, design, and brand assets. Assign pre-formation IP to the company in writing.
Switzerland can be a good fit if you live or operate there, your network and market are there, you want to build there long term, and stability and reputation matter to your model.
It may be less suitable if your market, team, and operating reality are elsewhere, or if you choose Switzerland only because it sounds prestigious.
In early stages, often sole proprietorship or GmbH. The AG becomes more relevant when growth, investors, or formal governance matter.
Yes. A sole proprietorship, a GmbH, and an AG can all be formed by one person.
A GmbH or AG only comes into existence through registration. A sole proprietorship must register once revenue reaches CHF 100,000.
In practice, yes. For a GmbH or AG you need a capital deposit account before the notary appointment.
Registration is mandatory from CHF 100,000 of worldwide taxable revenue per year. Check it early so nothing gets missed.
Yes, via a notarised and apostilled power of attorney — but you need at least one Swiss-resident person with signing authority, and Swiss banks may ask for more documentation.
No. The right jurisdiction depends on residence, market, team, tax logic, operating reality, and long-term plans.
Official registers and authorities to check for current rules:
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Chapter 13 · Germany (EU) New
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In the EU you never form "in Europe" — you form in one country under national law. Germany is the largest market in the EU and the most common EU base for founders from the DACH region, so it is the worked example in this edition. The logic transfers to other EU countries; the details do not.
As everywhere: validate first, then form. The German formation process is formal, but it is well-trodden and predictable.
One person, no separate legal entity, full personal liability. Start by registering a trade (Gewerbeanmeldung) — or, for freelance professions such as many consultants, developers, and designers, simply by notifying the tax office (Freiberufler).
What two or more people automatically form when they do business together without an entity — with joint personal liability. Since 2024 a GbR can be entered in a new company register (Gesellschaftsregister), which it needs, for example, to acquire real estate or company shares. Not a good vehicle for a startup.
A "mini-GmbH". Minimum share capital €1, liability limited to company assets. In return, 25% of each year's profit must be retained until the reserve reaches €25,000; then it can be converted into a regular GmbH. Useful when capital is tight, but some partners and banks see it as less established.
The standard vehicle for startups and SMEs in Germany. Minimum share capital €25,000, of which at least €12,500 must be paid in before registration. Liability limited to company assets. Most German venture-backed startups are GmbHs.
A stock corporation with €50,000 minimum capital and a supervisory board. Rarely the right choice early; it becomes relevant closer to an IPO.
| Einzelunternehmen | UG | GmbH | |
|---|---|---|---|
| Liability | Personal | Limited to company assets | Limited to company assets |
| Minimum capital | None | €1 (retain 25% of profits until €25,000) | €25,000; €12,500 paid in before registration |
| Formation | Trade registration or tax office | Notary + commercial register | Notary + commercial register |
| Perception | Solo business | Small company, limited capital | Established standard |
| Best for | Solo, low-risk starts | Lean team starts with little capital | Team startups, investor path |
High-level comparison. Use it as a starting frame, not as a substitute for case-specific review.
Search the common register portal (Handelsregister) and trademark databases. The name must be distinguishable from other companies at the same location and must include "GmbH" or "UG (haftungsbeschränkt)".
OutputAvailable, risk-checked name
Up to three founders with one managing director can use the statutory model protocol (Musterprotokoll) — cheaper, but inflexible, with no room for vesting or transfer rules. Teams planning to raise money should use individual articles.
OutputArticles or Musterprotokoll, plus shareholder list
All founders sign before a German notary. Since 2022 this can also be done fully online by video through the German Federal Chamber of Notaries' platform, using an eID-enabled ID card or electronic residence permit.
OutputNotarised articles and managing-director appointment
Open a business account for the company in formation and pay in at least half the capital (GmbH) or the full capital (UG). Note that a UG cannot be formed with contributions in kind.
OutputProof of capital payment
The notary files with the commercial register. The GmbH or UG exists once it is entered — until then, founders can be personally liable for business they conduct in its name.
OutputRegistered company, register number
Register the trade with the local trade office (Gewerbeamt) if applicable, complete the tax registration questionnaire (Fragebogen zur steuerlichen Erfassung) online via ELSTER, and receive your tax number and VAT ID. IHK (chamber of commerce) membership follows automatically.
OutputTax number, VAT ID, operating company
If you can raise €12,500 and plan to take investment, a GmbH is usually the cleaner start. A UG works for very lean starts, and can be converted later.
Yes. Neither shareholders nor managing directors need to live in Germany. Practical hurdles are the notary appointment, banking, and where the company is actually managed.
Yes, since 2022, via video notarisation — provided founders have a compatible electronic ID.
Not legally, but most GmbHs use one for annual accounts and tax returns. German tax filing is formal and deadline-driven.
Use the same sequence and check the national rules. Minimum capital, notary requirements, and VAT thresholds vary widely across the EU.
Neither is better in general. Choose based on where you live, where your customers and team are, and where you want to raise money.
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Chapter 14 · United States
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Starting a company in the United States is not one process under one system. Company formation is largely state-based, while tax, identity, and some compliance elements sit at the federal level.
Founders need to decide not only what type of company to form, but where to form it, where the business will operate, whether they need an EIN, which licenses or permits apply, and how ongoing compliance will work.
The U.S. is not one uniform incorporation regime. Think in layers:
Just like everywhere else, it is a mistake to rush into formation before validating demand.
OutputDocumented Go / No-Go / Pivot decision
Some founders sell into the U.S. without forming there. Others need a U.S. entity early — typically to raise from U.S. investors, sign U.S. enterprise customers, or hire in the U.S.
OutputClear reason for (or against) a U.S. entity
Where do founders live, where will the business actually operate, where are employees or contractors, where are customers concentrated — and is there a real reason to form in a different state from the operating state?
OutputState of formation and operating states
Typical early choices: sole proprietorship, LLC, and corporation.
OutputEntity type, reasoned decision
State formation documents, a registered agent in the state of formation, an EIN, state tax registrations, and licenses and permits.
OutputRegistered entity with tax identity
Business banking, bookkeeping, contracts, privacy and data handling, insurance, and recurring compliance.
OutputCompany ready to operate
Founders are often exposed to internet folklore such as "just incorporate in Delaware." That can be right in some cases and wrong in many others.
The stronger questions are:
State selection is a first-order founder decision, not a footnote. Chapter 16 goes deeper.
The simplest path for a single person operating a small business. It provides no separation between owner and business and is too weak for ambitious or risk-sensitive setups.
Attractive for founders who want a structured company vehicle with flexibility and practical operation.
Relevant when growth, ownership structure, governance, financing, or a venture path become central. The Delaware C corporation is the default for venture-backed startups.
An EIN (Employer Identification Number) is the federal business tax ID issued by the IRS. It is needed for banking, tax filings, payroll, and most administration — much earlier than many non-U.S. founders expect.
One of the most underestimated issues in the U.S. is the license and permit layer. Depending on the business model, the company may need state licenses, county or city business permits, professional or regulated activity approvals, or home-based business permissions.
No. Formation is mainly state-based, while several tax and compliance topics sit at the federal level.
No. That depends on how you operate, what you sell, where customers are, and which contractual or tax realities apply.
No. It is the standard for venture-backed corporations, but it should never be chosen by reflex.
In almost all practical cases, yes — banks require one, and so does hiring or filing corporate taxes.
Not for a company formed in the U.S. — FinCEN removed that requirement in 2026. A non-U.S. company registered to do business in a U.S. state still has to report.
No. It is practical for many small businesses, but most venture investors expect a C corporation.
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Chapter 15 · United States
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For most founders, the first real U.S. structure decision is between three options: sole proprietorship, LLC, and corporation.
The right choice depends on liability, tax logic, ownership structure, investment path, administrative complexity, and where and how the company will operate. This chapter explains the founder-level decision logic without generic clichés.
The structure affects liability exposure, the ownership framework, tax treatment, operational flexibility, investor readiness, filing burden, and banking and contracting practicality.
Entity choice should follow business logic, not online mythology.
The simplest operating path for one person with a small or early business.
Typically suitable when: one founder is testing a small business, the model is simple, risk is limited, and there is no investor or ownership complexity.
Main weakness: no liability separation; structurally too weak for scalable, higher-risk, or investor-oriented setups.
A formal business structure that is still practical and flexible. By default an LLC is "pass-through": profits are taxed at the owners' level, not at the company level. It can elect to be taxed as a corporation.
Typically suitable when: founders want liability separation and a cleaner operating structure, and the company is not clearly on a venture-backed path.
Main weakness: not every LLC fits every tax, funding, or growth scenario. Most venture investors will not invest in an LLC, and pass-through taxation can be awkward for non-U.S. owners.
Relevant when the business is intended for high growth, ownership and governance need formal structure, venture financing is realistic, or employee stock options are planned.
Main weakness: more formal burden, and profits are taxed at the company level and again when distributed.
Question 1: How real is the liability issue? If the business carries meaningful risk, the simplest structure stops being appropriate.
Question 2: Is this a small operating business or a venture-scale company? These are different paths with different founder logic.
Question 3: Will there be multiple founders or complex ownership? As ownership becomes more complex, the need for cleaner structure increases.
Question 4: Is outside investment a realistic path? Do not choose heavy structure based on imagined funding. But do not ignore structure if funding is actually part of the plan.
Question 5: How much complexity can the company absorb right now? A structure that is technically elegant but operationally heavy may still be wrong.
| Sole proprietorship | LLC | C corporation | |
|---|---|---|---|
| Best when | One founder, simple model, limited risk, no investors. | Cleaner structure with liability separation, not on a venture path. | High growth, formal governance, venture financing realistic. |
| Liability | Personal — the owner carries it directly. | Limited at company level. | Limited at company level. |
| Taxation | Owner's personal return. | Pass-through by default; can elect corporate tax. | Corporate tax, plus tax on dividends. |
| Investor readiness | Very weak. | Possible, but most institutional investors prefer a C corp. | Standard for venture financing, especially Delaware. |
| Founder tax upside | — | — | May qualify for QSBS gain exclusion. |
High-level founder view of the three most common U.S. early-stage structures.
Not always. It is stronger in many cases, but not every founder needs it immediately.
For venture-backed startups, a C corporation is the norm. For a small operating business, it can be unnecessary overhead.
Yes, and many companies do before a priced round. It costs legal fees and can have tax consequences, so do it deliberately.
Sometimes, if risk, scale, and complexity stay limited.
Not ideally. State choice and entity choice affect each other.
Choosing the structure before understanding what kind of business is actually being built.
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Chapter 16 · United States
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One of the most misunderstood founder decisions in the U.S. is state choice.
Many people hear "just incorporate in Delaware" and never ask the more important question: where will the company actually operate, hire, sell, contract, and pay taxes?
State choice should follow business reality, not founder folklore.
State choice affects the formation process, filing obligations, operating registrations, state tax exposure, local compliance, administrative burden, and in some cases investor expectations and legal predictability.
Not: which state sounds smartest? But: where will this company actually do business?
Recommended path: form where you operate. If the company clearly operates in one state, form there. It usually saves cost, complexity, and duplicate registrations.
Recommended path: a Delaware C corporation is still the default. Investors, lawyers, and standard financing documents are built around Delaware law. It should still be a reasoned decision, not a reflex.
Recommended path: separate four layers. Distinguish market entry, legal presence, tax identity, and operating footprint — each can imply different state and federal obligations. Many non-U.S. founders only need a U.S. entity once they raise from U.S. investors or hire in the U.S.
Delaware is right for many venture-backed companies. It is a poor fit if chosen without understanding where the business will really operate.
State logic should follow operating logic, not replace it.
The state of formation is rarely the only relevant state in the life of the business.
For many founders, the right state is the one that reflects operating reality and minimises unnecessary complexity. For venture-oriented companies, Delaware is usually the right answer — as a reasoned decision.
No. It is the standard for venture-backed corporations, but not an automatic default for every business.
For a small operating business, often yes. For a venture-backed startup, usually Delaware plus registration in your operating state.
Yes. It can materially affect setup cost and ongoing obligations.
Yes, but you will usually need to register as a foreign company in the operating state too.
Not as an early-stage startup without specific advice. The debate is mainly about large, controlled public companies.
Treating it like a trend decision instead of an operating decision.
Official registers and authorities to check for current rules:
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Chapter 17 · United States
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Many founders think the hard part is finished once the company exists on paper. In the U.S., that is often only the beginning.
Once structure and state are clear, founders need to handle tax identity, licenses, permits, bookkeeping, banking, insurance, and ongoing compliance. Treat them as early operating requirements, not late-stage cleanup.
A business can exist formally and still be unusable in practice. That happens when founders do one thing well — formation — and leave five others half-finished:
The EIN is the federal business tax ID issued by the IRS. It matters for tax setup, business banking, payroll and hiring, and basic administrative identity.
Apply early. With a U.S. Social Security Number, the IRS online application gives you an EIN the same day. Without one, use Form SS-4 by fax or mail, or apply by phone as an international applicant — expect days to weeks.
Licenses and permits can sit at several levels. Depending on the business, consider:
Do not guess. Recognise that this layer exists and check it for your state, county, and city.
Founders often assume they can open the business bank account the day formation is complete. Delays happen because:
Once the company is real, money, records, and obligations matter immediately: invoice handling, expense tracking, document retention, tax reserves, and recurring filing logic. If you sell to customers in several states, check sales tax obligations early — they can apply even without a physical presence once you pass a state's sales threshold.
Depending on the business model, risk arises around general liability, professional liability, employer obligations, and cyber and data exposure.
Formation is one event. Compliance is a system. Plan for recurring filings, tax returns and payments, permit renewals, payroll obligations, recordkeeping, and updates when address, ownership, or operations change.
In almost all practical cases, yes. Banks require one, and so do payroll and corporate tax filings.
No. Depending on location and activity, small businesses may also need permits.
You can, but that is how founders create preventable tax, cash flow, and documentation problems.
Not always. Banks need the EIN, formation documents, ownership information, and a coherent setup.
No. Formation is one event. Compliance is ongoing.
Believing that the entity existing on paper means the company is ready to operate.
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Chapter 18 · After you form New
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Not every company needs outside money. Many good businesses are built on revenue, grants, or founders' savings. But if you do raise, the first money shapes everything after it: who owns the company, who has a say, and what you have promised.
This chapter covers the early instruments, how dilution works, and how to give your team a stake.
Raise when money buys something specific — speed to a milestone that makes the company much more valuable, a hire you cannot otherwise make, or inventory you must pre-finance. Do not raise because it feels like progress.
Typical early funding sources, roughly in order:
Investors buy new shares at an agreed valuation. Clean and clear, but it requires a valuation, more legal work, and — in Switzerland and Germany — a notarised capital increase.
A loan that converts into shares at the next priced round, usually with a discount (often 10–25%) and a valuation cap. The standard pre-seed instrument in Switzerland and Germany because it postpones the valuation discussion and needs no notary at signing.
A "simple agreement for future equity" — the U.S. standard for early rounds, published by Y Combinator. Like a convertible loan, it converts at the next round, but it is not debt: no interest, no maturity date. The post-money SAFE makes it clear how much of the company investors will own after conversion. SAFEs are designed for U.S. corporations and do not translate one-to-one into Swiss or German law.
When you issue new shares, everyone's percentage shrinks — but ideally the company is worth more, so each share is worth more.
Example: two founders own 50% each. An angel invests at a valuation that gives them 10%, and a 10% employee pool is created. Each founder now owns 40%. After a seed round in which investors take 20%, each founder owns 32%.
Rules of thumb for early rounds:
Early employees take a risk and a lower salary. Equity lets them share in the upside — and it keeps the team aligned with the owners.
For a Swiss or German company, a convertible loan is the usual pre-seed instrument. For a U.S. C corporation, the post-money SAFE is. Priced rounds are the norm from seed or Series A.
Enough to reach the next meaningful milestone plus a buffer — typically 12 to 24 months of runway.
Whatever lets you reach the next round with room to grow into it. An inflated valuation can make the next round painful.
Often 10–15% before seed, sized to the hires you actually plan in the next 18–24 months.
Virtual plans are simpler to run; real shares or options can be more tax-efficient, especially under Germany's §19a. Decide with a tax advisor.
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Plain-English definitions of the founder, legal, and tax terms used in this Bible. Underlined terms in the chapters link here — hover or tap them for a quick definition.
A filing with the IRS, within 30 days of receiving stock that vests over time, that lets you be taxed on its value today instead of as it vests. There is no extension and no fix if you miss it.
Swiss company limited by shares (Aktiengesellschaft). Minimum share capital CHF 100,000, of which at least CHF 50,000 must be paid in. Shareholders are not published; a board of directors is required.
Switzerland's old-age and survivors' insurance, collected together with disability (IV) and income-compensation (EO) contributions. Self-employed founders register with their cantonal compensation office; employers and employees split contributions on salaries.
The founding charter of a capital company. Defines name, seat, purpose, share capital, share structure, and governance rules.
The natural person who ultimately owns or controls a company — in Switzerland and for FinCEN purposes, typically anyone holding 25% or more of capital or votes, or controlling it otherwise.
Beneficial ownership information report to FinCEN under the Corporate Transparency Act. Since August 2026 only required for foreign companies registered to do business in a U.S. state — not for companies formed in the U.S.
How the business creates and captures value — what is sold, to whom, at what price, with what cost structure, and through which channels.
Internal rules of a U.S. corporation governing meetings, officer duties, share procedures, and decision-making.
A U.S. corporation taxed separately from its owners. The standard structure for venture-backed startups because it supports preferred share classes, stock options, institutional investors, and QSBS.
The table showing who owns which shares and options in the company, before and after each round. Investors will ask for it first.
A clause in the articles of a Swiss AG or GmbH that lets the board raise or reduce capital within a set range for up to five years without a new shareholder vote each time.
The capital founders pay in at formation in exchange for ownership. Swiss GmbH: CHF 20,000, fully paid. Swiss AG: CHF 100,000, at least CHF 50,000 paid. Since 2023 it can be denominated in EUR, USD, GBP, or JPY.
A blocked bank account into which the share capital of a new GmbH or AG is paid before the notary appointment. The bank's confirmation is part of the formation documents; the funds are released after registration.
The official cantonal registries of companies, searchable nationally via Zefix. A GmbH or AG comes into existence when it is registered. Sole proprietorships must register once annual revenue reaches CHF 100,000.
A loan (Wandeldarlehen) that converts into shares at the next priced round, usually at a discount and subject to a valuation cap. The standard pre-seed instrument in Switzerland and Germany.
"Doing business as" — a registered trade name used by a U.S. business to operate under a name different from its legal name. Filed at state or county level.
The reduction in an owner's percentage when the company issues new shares. Acceptable if the company's value grows faster than the percentage shrinks.
A clause allowing a large majority of shareholders to require all others to join a sale of the whole company on the same terms.
Employer Identification Number — the federal tax ID issued by the IRS. Needed for business banking, hiring, and federal tax filings. Founders without an SSN apply with Form SS-4.
Equity reserved for current and future employees, often 10–15% of the company, granted as shares, options, or virtual shares.
U.S. tax obligations administered by the IRS, separate from state tax. Includes income tax, payroll tax, and self-employment tax.
Registering a company formed in one U.S. state to do business in another state where it operates — for example a Delaware corporation with its office in California.
An annual IRS information return required for single-member LLCs owned by a non-U.S. person and for many foreign-owned U.S. corporations. Penalties start at $25,000.
A written agreement between co-founders covering equity split, vesting, IP assignment, roles, decision rights, and exit logic.
An annual state tax for the privilege of existing as a company in that state. Delaware's default calculation can look alarming for startups; the assumed par value capital method usually lowers it.
Swiss limited liability company. Minimum share capital CHF 20,000, fully paid in. Liability limited to company assets; members are listed in the commercial register.
Rules deciding the price at which a departing founder's or employee's shares are bought back — fair value for good leavers, often nominal value for bad leavers.
Intellectual property — code, content, designs, brand marks, patents, trade secrets. Should be assigned to the company in writing, including anything created before formation.
Legal responsibility for debts and obligations. Sole proprietors are personally liable; owners of a GmbH, AG, LLC, or corporation are generally protected beyond their capital contribution.
An investor's right to get their money back (1× is standard) before other shareholders when the company is sold or wound up.
Limited liability company — a flexible U.S. structure that combines liability protection with pass-through taxation by default.
The international trademark system run by WIPO: one application through your home office can extend protection to many countries.
The German statutory model protocol for forming a GmbH or UG with up to three founders and one managing director. Cheaper, but leaves no room for vesting or transfer rules.
The international system of 45 classes of goods and services used to register trademarks. Software is typically class 9, SaaS class 42.
A public officer who notarises the formation deed of a Swiss GmbH or AG. Formation by public deed remains mandatory for capital companies.
A meaningful change in the business — different problem, audience, value proposition, or business model — based on what validation revealed.
The filing date of your first trademark application. Within six months you can file in other Paris Convention countries and keep that date.
Qualified small business stock (Section 1202). For qualifying C-corporation stock issued after 4 July 2025: 50% of the gain excluded after 3 years, 75% after 4, 100% after 5 — up to $15 million per issuer.
A person or service with an address in the state of formation that accepts legal documents on the company's behalf. Required in every U.S. state.
Simple agreement for future equity — the Y Combinator instrument for early U.S. rounds. Converts into shares at the next priced round; not debt, no interest, no maturity.
The simplest business form — one individual operating in their own name, with no separate legal entity and full personal liability.
U.S. tax administered at state level, including state income tax, franchise tax, and sales tax. Varies widely by state.
A registered sign protecting a brand name or logo for specific classes of goods or services in a specific territory, usually for ten-year renewable terms. Independent of company-name registration and domain ownership.
Register of beneficial owners. Switzerland: non-public federal register in force since 1 October 2026 for GmbHs, AGs, and most other legal entities (25% or more). Germany: the Transparenzregister, where every GmbH and UG must actively report owners above 25%.
German "mini-GmbH" with €1 minimum capital. 25% of annual profit must be retained until the reserve reaches €25,000.
The Swiss enterprise identification number (CHE-123.456.789) assigned on registration and used for VAT and official dealings.
Structured testing of the riskiest assumptions behind an idea — the problem, the audience, the offer, and willingness to pay.
The maximum valuation at which a convertible loan or SAFE converts into shares, protecting early investors if the next round is priced high.
Value-added tax on most goods and services. In Switzerland, registration is mandatory from CHF 100,000 of worldwide taxable revenue per year; the standard rate is 8.1%. EU thresholds and rates vary by country.
A schedule under which founder or employee equity is earned over time, typically four years with a one-year cliff.
Virtual stock option plan — employees receive a cash payout tied to the company's value at exit, taxed as salary, without becoming shareholders.
The strongest signal in early validation — whether someone will actually pay, sign, or commit, not just say something sounds interesting.
The central index of Swiss commercial register entries. The first place to check whether a company name is already taken.
No term matches that search.
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