Open a General Partnership in Switzerland

A general partnership in Switzerland has to be registered by at least two natural persons. Investors who want to open a company in Switzerland can choose between setting up a general partnership or a limited partnership. The difference between the two legal entities is given by the liability regulations concerning the company’s founders and our team of company formation agents in Switzerland may offer full assistance on the registration procedures applicable for these legal forms. 

What are the main characteristics of a general partnership in Switzerland?

If you decide to start a business as a general partnership in Switzerland, there are several important aspects you should know about, among which:

• this structure must be created by a minimum number of 2 members or partners;
• there is no limit to the number of participants in this business form;
• the founders must be natural persons, which is why this structure is suitable for family businesses, for example;
• there is no need for the partners to be Swiss residents; however, they must have at least a local address (in which case we recommend using a virtual office);
• the founders do not need to be registered as sole traders;
• its creation relies on a partnership deed or agreement, which is simpler compared to a company’s Articles of Association;
• the registration will occur with the Trade Register.

What is the registration procedure for a general partnership in Switzerland?

Businessmen who want to start the procedure of company formation in Switzerland as a general partnership will need to conclude a contract in which they will state the company’s trading name and main business activities. The name of a general partnership in Switzerland can be freely chosen but must indicate the legal form (e.g. 'Kollektivgesellschaft' or 'KlG'). 

Further on, it is necessary to register the general partnership with the Commercial Register in Switzerland. In order to register it, the company’s founders (who will have the status of partners), will need to sign a request for registration, a requirement that must be concluded by all the partners entering the general partnership. 

It is important to know that the commercial legislation related to partnerships in Switzerland does not stipulate to draft the company’s articles of association, as this is not a compulsory procedure. 

What is the legal status of a Swiss general partnership?

When choosing to open a general partnership in Switzerland, it is important to note that it is a non-corporate business form which implies that the owners will be fully responsible for the financial and non-financial obligations of the partnership. In case of bankruptcy, for example, they could pay with their personal assets in case those of the enterprise are not sufficient to cover the dues to the creditors.

The company’s founders have full liability for the partnership’s debts and, therefore, the legal entity does not have a legal personality.  If you want to start a company in Switzerland as a general partnership, our team is at your diposal.

Whom does this type of Swiss structure address?

In Switzerland, general partnerships are used to launch small enterprises by family members and/or friends who agree on the business model and whose interests align. It is a mix between a trading company and a self-employed structure and is often used by those who operate craft-related activities. According to the Portal for Small and Medium-sized Enterprises, there are about 8,000 general partnerships operating in Switzerland.

What should the capital contribution of a general partnership consist of?

The capital can consist of:

• cash (the most common form);
• securities;
• real estate (rarely used);
• other assets.

Even work can be considered a contribution to the capital, as you can use the money generated by the business to fund it.

How long does it take to register a general partnership in Switzerland?

The registration of a general partnership takes between 2 weeks and a month, depending on how soon the documents are ready. Also, delays in the local Trade Register may also occur, based on the number of applications not only for this type of business, but also for others. As such, if you are in a hurry, please consider this aspect to schedule accordingly.

What are the advantages of a general partnership in Switzerland?

The general partnership has several advantages, among which those that stand out the most are:

• the simple registration procedure in terms of documents, as you only need a partnership agreement (no notarisation is required);
• it also has a simple structure from a management point of view, especially when created by two members who share the decision-making and have equal rights in the process;
• the law does not impose a minimum share capital for this business form, and as such, the partners agree on the start-up amount.

Are there any disadvantages I should consider about it?

The main downside of starting a business through a Swiss general partnership is the unlimited liability of the partners in case the enterprise incurs debts that cannot be paid from its own income. In this case, the members must contribute to the debt with their own money or even personal assets. However, this seldom happens, as this type of entity is suitable for a small business (as previously mentioned). This means that once you start making more money, you can change the legal form. You can transform it into a private limited company, for example.

Businessmen who want to register a Swiss general partnership are invited to contact our team of consultants in company registration in Switzerland for an extensive presentation on this subject.