Bookkeeping requirements in Switzerland: sole proprietorship, GmbH or AG?

How much bookkeeping a Swiss business has to do depends mainly on two things: its legal form and its revenue. Since the overhaul of Swiss accounting law, the Swiss Code of Obligations (CO/OR) distinguishes between full bookkeeping and a simplified version, often called "Milchbüchleinrechnung" (literally "milk-book accounts") in everyday Swiss German.

The basic rule in Art. 957 CO

The following must keep full accounts and prepare full financial statements:

• legal entities, in particular the GmbH (limited liability company), the AG (company limited by shares) and cooperatives, whatever their revenue,
• sole proprietorships (Einzelfirma) and partnerships (general and limited partnerships) with revenue of at least CHF 500,000 in the last financial year.

The following only need to keep records of income, expenditure and their financial position:

• sole proprietorships and partnerships with revenue below CHF 500,000 in the last financial year,
• associations and foundations that are not required to register in the commercial register,
• foundations exempted from the requirement to appoint an auditor.

The principles of proper bookkeeping still apply to simplified bookkeeping by analogy, so you need receipts in either case.

Overview by legal form

Note that the law treats the notes as part of the annual accounts. Under Art. 959c para. 3 CO, however, sole proprietorships and partnerships can leave them out, as long as they are not subject to the rules for larger companies. Any additional disclosures the law requires for the minimum structure then go directly into the balance sheet or income statement.

What "proper bookkeeping" means

Art. 957a CO sets out five principles:

1. complete, truthful and systematic recording of transactions,
2. a supporting document for every entry,
3. clarity,
4. suitability for the nature and size of the business,
5. verifiability.

You keep your accounts in Swiss francs or in the currency that matters most for your business, in one of the national languages or in English. They can be kept on paper or electronically.

Example 1: a growing sole proprietorship

A carpenter has run his sole proprietorship for three years. In 2025 he turned over CHF 420,000, and he expects CHF 540,000 for 2026.

• Simplified bookkeeping is still enough for the 2026 financial year, because what counts is revenue in the last financial year, i.e. 2025.
• From 2027 he must keep full accounts, because his 2026 revenue has reached the CHF 500,000 threshold.

In practice, many sole proprietorships switch to double-entry bookkeeping long before they reach this threshold. The tax authorities expect a clear statement anyway, and VAT comes into play from CHF 100,000 in revenue. Once you are registered for VAT, you can hardly get by without proper accounts.

Example 2: a small GmbH

A consultant sets up a GmbH and turns over CHF 80,000 in her first year. Despite the low revenue, the GmbH is a legal entity and therefore subject to full bookkeeping: double-entry accounts, a balance sheet, an income statement and notes.

There is one relief, on accruals. If net revenue from sales of goods and services, or financial income, does not exceed CHF 100,000, Art. 958b CO lets the company skip accruals and work on a cash (income and expenditure) basis instead.

Simplified bookkeeping in practice

So what does recording "income and expenditure and the financial position" actually look like? The law prescribes no particular form, but the principles of proper bookkeeping apply by analogy. A setup that works well:

• a chronological journal of all income and expenditure, with date, amount, counterparty and receipt number,
• business and private payments kept apart, ideally with a separate business account,
• a year-end statement of bank and cash balances, unpaid customer invoices, unpaid supplier invoices, stock and assets such as vehicles or machinery,
• all receipts, kept in order for ten years.

For many small sole proprietorships, this statement is enough for the tax return. But as soon as you take on staff, hold stock or register for VAT, double-entry bookkeeping is usually simpler than an improvised spreadsheet.

Audit: when your accounts must be checked

As a rule, a GmbH or AG must have its annual accounts audited. An ordinary audit is required for listed companies, for companies that must prepare consolidated accounts, and for companies that exceed two of the following three thresholds in two consecutive years:

• total assets of CHF 20 million,
• revenue of CHF 40 million,
• 250 full-time positions on annual average.

All other companies are subject to a limited audit. A company with no more than ten full-time positions on annual average can opt out of the audit altogether, provided all shareholders agree (opting out). Since 2025, the opt-out notification to the commercial register must be accompanied by the annual accounts for the last financial year. Opting out only applies to future financial years.

The federal SME portal recommends choosing an auditor who is independent of your own accountant (Treuhänder) or adviser.

How many businesses does this affect?

According to the Federal Statistical Office, there were 626,033 market-sector businesses in Switzerland in 2023. Of these, 624,219 were SMEs with fewer than 250 employees, and 561,952 were micro-businesses with fewer than ten. For the vast majority of businesses, the questions in this article are exactly the ones that matter: simplified or full bookkeeping, limited audit or opting out.

Deadlines and retention

• The annual report must be prepared within six months of the end of the financial year and submitted to the responsible body for approval.
• It must be signed by the chair of the most senior management or administrative body and by the person responsible for financial reporting.
• Accounting records, supporting documents, the annual report and the audit report must be kept for ten years.

What this means for choosing a legal form

Bookkeeping requirements alone should not decide your legal form. Liability, tax, social insurance and capital needs usually weigh more heavily. But if you set up a GmbH or AG, plan from the outset for the extra work involved in bookkeeping, year-end closing and, where applicable, the audit.

Digital accounting, where receipts, bank transactions and invoices flow in continuously, narrows the gap between the two worlds. With Buchsnap, sole proprietorships and small companies can use the same structure and bring in their accountant directly when needed. Moving from simplified to full bookkeeping then becomes mainly a question of year-end closing rather than day-to-day work.

Quick checklist

1. Check your legal form and your revenue in the last financial year.
2. For a sole proprietorship, compare revenue with the CHF 500,000 threshold every year.
3. Remember the commercial register requirement from CHF 100,000 in revenue.
4. For a GmbH or AG, decide on an audit or opting out in good time before the financial year begins.
5. Collect all receipts from day one, even with simplified bookkeeping.
6. Allow time to close the year within six months.

Last updated: October 2026. This article does not replace individual advice.