Incorporation of Swiss companies

Background

The process of legally registering a new company in Switzerland heavily relies on printed documents that have to be exchanged between several parties, and can take up to six weeks. Correctly filling out documents and sending right ones to the right parties in the right order alone can cost weeks to people unfamiliar with the process.

The gathering and exchange of information between the participants is very time consuming and error-prone. The main document can be 30 pages long and every detail needs to be thoroughly verified by a notary before the documentation is handed over to the official business registry. As there are

Use case exploration

As part of a challenge by digitalswitzerland, Proxeus joined a project initiated in 2017 by IBM, E&Y and Swisscom, aiming to change the status quo and accelerate the registration of Swiss companies. The project team consisted of lawyers, notaries, banks, authorities (register of commerce), IT service providers and software developers.

Following several workshops where the various processes were analyzed, discussed and streamlined. A prototype was built and several improvement loops were done until the point when the group felt confident enough to present the solution publicly. In May 2018, a public demonstration showed that the total time to incorporate a company can be reduced to less than two hours by using the Proxeus document workflow automation engine and a blockchain to coordinate processes more effectively.

Implementation

The solution consists of a Proxeus platform with workflows for the different legal forms that can be registered, starting with simple forms and adding others later. The workflows comprises a series of smart forms that validate all inputs immediately. This highly simplifies the processes for data entry, document creation and data exchange between all the parties that are involved. Information that had to be entered redundantly up to 30 times is now only entered once in a Proxeus form. Input validation that had to be done manually before, happens automatically now. Tasks that previously had to be tackled sequentially, due to the need to move paper dossiers around, can now be completed in parallel.

Excerpt from one of the user forms of the incorporation process

The workflow also includes a conditional alternative path, depending on if the founder has already opened a capital deposit account at a bank. If he has not, two additional forms are shown and one more document is produced.

Conditional alternative path

At the end of the workflow, all needed documents are created and their hash is registered on the Ethereum blockchain, making the document tamper-proof and verifiable. While Proxeus provides a verification tool for its users’ convenience, the entries are made on the public Ethereum blockchain and may also be checked using block explorers like Etherscan or custom tools.

One of the workflow versions used to incorporate a company

At the end of the workflow, a custom node built for Proxeus’ integration layer interacts with a service developed by the project partner IBM. Through this service, Proxeus is connected to a votation contract on Hyperledger Fabric, allowing the relevant stakeholders (entrepreneur, lawyer, bank, notary, public register) to verify and sign the documents produced. The bank states that the capital money has indeed been paid; the notary confirms that the necessary documents have been provided, read over, and approved; and the commercial register performs a final check that everything is accurate and lawful. After successful collection of all confirmations, the filing is officially registered with the Commercial Register and Official Gazette of Commerce.

Result

The Proxeus platform set up specially for the business registry project was well-received by all parties. Using the workflows proved intuitive for users of all kinds of professional backgrounds. When the first real business incorporation was done using the platform, it took less than two hours, crushing the initial objective of 48 hours. This achievement was a Swiss – and likely world’s – first!

The prototype worked so well that the test phase has then been prolonged to register up to 100 companies with Proxeus. By now, dozens of companies have been registered through Proxeus workflows and the process has been fine-tuned several times by the project team. In 2020 the platform is still live and being used and maintained by the project participants. The next step for the project, which has already began, is the onboarding of further notaries and lawyers, who will at their turn incorporate companies through Proxeus.

Feedback

In an interview in August 2019, the lawyer Philippe Kaiser from Kaiser Odermatt & Partner, who was involved in the project, commented on the Proxeus solution:

“The tool highly simplifies the processes for data entry, document creation and data exchange between all the parties that are involved. [...] We can certainly imagine many other use cases. The Proxeus tool is very simple and intuitive to use. In particular, the intuitive handling of the tool opens up many possibilities and easy access for users that aren’t IT experts.”

The project received massive media attention and made it into several big newspapers, magazines and TV shows. It sparked a desire for innovation in several of the cantonal business registers of Switzerland.

Insights

The project was initially intended as a prototype but was consolidated into a more stable solution as the project participants decided to bring it to MVP level, generating a feedback stream that was useful for improving several aspects of the product. The feedback collected allowed to design and scope a series of sharing features, and led to the improvement of the import/export capabilities of Proxeus, going beyond the requirements set in the original project whitepaper. 

The project also led to the realization that a higher degree of automation would require more integration, and that because every participating party has existing IT systems in place, a well-designed integration layer should be made available in order to allow for Proxeus platforms to scale in the future.

Limitations

The project was initially intended as a prototype but was consolidated into a more stable solution as the project participants decided to bring it to MVP level, generating a feedback stream that was useful for improving several aspects of the product. The feedback collected allowed to design and scope a series of sharing features, and led to the improvement of the import/export capabilities of Proxeus, going beyond the requirements set in the original project whitepaper. 

Try it yourself

If you enjoyed reading the documentation of this project and would like to try building something similar, we suggest following the steps below. For the most part you’ll only need decent skills in using Proxeus, but for the full scope some programming knowledge is required.

Here is how you can create a workflow - using only Proxeus and no programming at all.

1) Understand the requirements. What workflow output do you expect? What documents should be registered? What role should signatures play?

2) Requirements analysis and specification:

a. Which part of which business process would you like to digitize with your Proxeus prototype?

b. Who are the stakeholders? What are the different tasks? What are the roles?

c. Which documents shall be produced and what information is needed to create them?

d. On which blockchain do you want to register the resulting documents? Do you require a smart contract or would simple transactions suffice?

3) Set up Proxeus. You can run your own instance of Proxeus on a server or locally on your computer. The complete guide to setting up your own instance is available here. It is recommended that you deploy your own smart contract following our instructions in the guide and using the template in our GitHub.

4) Create Proxeus workflows. When you scoped your project in step 1, you figured out which documents need to be produced. After you’ve set up your own instance of Proxeus, you can now configure a workflow for each document. Workflows comprise of data entry forms and document templates. Some users prefer to design the document templates first and then to derive the necessary data inputs in the forms from there. The other way around is also fine.

5) Prepare the document template(s). What should the document design look like? What should placeholders be used for? How should the information be formatted (e.g. what sections should be shown vs. hidden in the final output)?

Excerpt from one of the templates of the incorporation process

6) Prepare the user forms. Adapt the requirements to the audience (e.g. athletes cannot be expected to be very tech-savvy) - entering the data has to be intuitive and instill confidence. All Proxeus form elements support help texts - they even accept HTML and links to further information - use them to clarify every step.

7) Optimize your workflow for efficient, intuitive data entry. Help the user avoid mistakes by explaining each field with help texts and by validating the fields. Proxeus can support you by checking if the input has the expected format, for example a valid email address or date. Create smart fields that only appear when certain conditions are met. For example, you can use smart placeholders like this:

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{% if (input.number > 0) %} Number is higher than 0 {% else %} 0 {% endif %}

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Our complete guide to templates can be found here. As the Proxeus document service is based on the JTwig templating system, you can also consult the full reference here.

8) Interact with blockchains or other systems. Thanks to the integration interfaces of Proxeus, you can simply add custom code into your workflows. Read data from an ERP, send an email confirmation, create a transaction in blockchains other than Proxeus’ native platform Ethereum - all this can be done through custom nodes. The technical documentation of our external nodes library can be found here in GitHub. One example implementation of such a node, a program to retrieve token balances from a wallet, can be found here. Instead of using the Ethereum library, you can import the library of the system you would like to connect (e.g. Hyperledger, IOTA).

To help you kickstart your ideas, we’ve provided several examples on this website. In the project for business incorporations we made Proxeus communicate with an API for IBM’s Hyperledger Fabric framework. A votation contract was used to collect the signatures of the participants, each of them confirming that their tasks have been completed. This specific piece of code cannot be shared, but can be recreated using Hyperledger’s documentation - or connecting Proxeus to a voting contract on any blockchain of your choice.

9) Set signatures as required - once given by users they are publicly visible on the blockchain and verifiable by anyone.

10) Configure the workflow by connecting the smart template(s) and the forms in a workflow. Set a XES price to the workflow (if applicable) and share the form with the platform users.

11) Test and improve your workflow. Nothing is perfect from the start. Even when your workflow is already in production and in use, you can simply clone it and release an improved version to your users. If the changes are compatible, you can also just upgrade the existing workflow and all running instances will use the new definition automatically.

12) Create an instruction page to onboard users. Our handbook and tutorial videos are also here to help.

13) Integrate a verification tool into your organization’s website to simplify the verification process. The verification tool of your Proxeus platform can be found directly via the /validation path; for example https://demo.proxeus.com/validation. It can also be embedded using a standard iFrame HTML code.

<iframe width="100%" height="650" src="https://demo.proxeus.com/validation" frameborder="0" marginwidth="0" marginheight="0" scrolling="yes"></iframe>

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