Sole Proprietorship in Liechtenstein

Josef Bergt
2023

In the landscape of business structures, the sole proprietorship stands as an entity, which is operated on behalf of an individual who bears sole responsibility and has personal and unlimited liability. In Liechtenstein, if a sole proprietorship engages in a trading, manufacturing, or other commercial activity, it is obliged to be registered in the Commercial Register at the principal place of business, unless its annual sales do not exceed CHF 300,000.00.

Establishing a sole proprietorship requires only one person, the business owner. Typically, a business permit or trade license is required before the sole proprietorship can commence its planned operations. Anyone who operates a commercial, manufacturing or other business conducted in a commercial manner is obliged to have his company, including sole proprietorships, entered in the Commercial Register at the place of the principal place of business. If additional persons are authorized signatories for the sole proprietorship, these individuals must be entered in the Commercial Register along with the scope of their signatory authorization.

The registered domicile of the sole proprietorship must be the municipality where the business operations are located. A representative (c/o) address is not permissible. If the business operations are relocated to a different municipality, the change of registered domicile must be reported to the Commercial Register.

The purpose of the sole proprietorship generally aligns with the registration of the business at the Office of Economic Affairs. The business owner has personal and unlimited liability for the liabilities of his enterprise with his entire assets, including private ones.

The sole proprietorship is obliged to maintain proper accounts if annual gross sales of over CHF 10’000.00 are reached. The legal principles governing sole proprietorships in Liechtenstein are outlined in the Persons and Companies Act (PGR) and the Commercial Register Ordinance (HRV)

Source: Factsheet AJU/ h70.021e.01

Executive Summary:

• A sole proprietorship is a company operated on behalf of an individual who bears sole responsibility and has personal and unlimited liability.
• If a sole proprietorship engages in a commercial activity, it is obliged to be registered in the Commercial Register at the principal place of business, unless its annual sales do not exceed CHF 300,000.00.
• Establishing a sole proprietorship requires only one person, the business owner.
• The registered domicile of the sole proprietorship must be the municipality where the business operations are located.
• The business owner has personal and unlimited liability for the liabilities of his enterprise with his entire assets, including private ones.
• The sole proprietorship is obliged to maintain proper accounts if annual gross sales of over CHF 10’000.00 are reached.