There are various ways to open a company in Switzerland, among which is by establishing a general partnership. This is a non-corporate business form that relies on 2 members and simplified documents for creation.
Below, our law firm in Switzerland explains the main characteristics of general partnerships and how they can be used to have a business in this country. We can also help you in the process of opening general partnerships in Switzerland.
| Quick Facts | |
|---|---|
| Applicable law | Article 944 of the Civil Code. |
|
Special requirements related to the name (YES/NO) |
No. |
|
Legal personality (YES/NO) |
No, the general partnership is not considered a legal entity. |
| Minimum number of members | The partnership must have at least 2 participants. |
| Maximum number of members |
The law does not cap the maximum number of partners. |
| Minimum share capital (if available) |
No, the partners decide the amount of money they want to contribute to the business. |
| Authorization requirements (if any) |
Yes, depending on the activities of the Swiss general partnership. |
| Local address required (YES/NO) |
Yes. |
| Authority to be registered with |
General partnerships must be registered with the Companies Register. |
| Creation document | The partnership deed. |
| Tax registration requirement (YES/NO) |
Yes, general partnerships must also register for taxation. |
| Taxation of general partnerships in Switzerland |
The partnership itself is not taxed, but the partners must pay the income tax on the income and assets held in the partnership. |
| Special requirements for the partners (if any) |
Yes, they must be authorized to work as self-employed persons. |
| Why set up a general partnership in Switzerland? |
– quick registration, – simple administration procedures, – low maintenance costs. |
| Support in setting up a general partnership in Switzerland (YES/NO) | Yes, our law firm in Switzerland can help you create a general partnership. |
Table of Contents
Types of partnerships in Switzerland
The Swiss Code of Obligations distinguishes two types of partnerships: the general partnership and the limited partnership. Partnerships in Switzerland must be formed by at least two individuals conducting business operations under a joint company. Compared to other types of Swiss companies, partnerships may not have legal entities as partners. Swiss partnerships are considered legal entities and must be registered with the Companies Register if carrying out business activities.
The main characteristics of Swiss general partnerships
If you want to create a general partnership in Switzerland, you must consider the following:
- it falls under Article 944 of the Swiss Civil Code;
- it needs at least 2 members, natural persons who are jointly liable for the obligations of the entity;
- it has no legal status compared with corporate entities operating in Switzerland;
- it requires no minimum share capital;
- it is suitable for developing small business operations.
The registration of a general partnership in Switzerland takes approximately one month, depending on the Swiss canton it is set up in.
Our Swiss lawyers can offer additional details on the legal conditions to perform if you want to start a business through a general partnership.
The members of a general partnership in Switzerland
As mentioned above, a Swiss general partnership must have at least 2 members. There is no maximum number of partners such an entity can have. They must be natural persons and must create a partnership deed that will be registered with the Companies Registrar in the canton where the business will operate. For this purpose, the individuals must register as self-employed persons for social insurance.
The partners will decide on the share capital of the partnership, which must be mentioned in the establishment document, in accordance with Articles 531 and 557 in the Civil Code. Each partner must contribute to the capital, and the contribution can be made in:
- cash;
- kind (assets, securities).
Another important aspect is that the partners are not required to be Swiss residents; however, they must have a local domicile.
You can rely on our lawyers in Switzerland for support in drafting the partnership agreement in accordance with the legal obligations imposed.
We also have an infographic on opening general partnerships in Switzerland below:
What are the requirements for setting up a general partnership in Switzerland?
General partnerships in Switzerland (Kollektivgesellschaft) are usually employed when carrying out small businesses. The formation of a partnership in Switzerland consists of signing the articles of partnership. The general partnership’s name consists of the family name of at least one of the partners and the suffix indicating the relationship between the two founding members. The Swiss general partnership may also add the business activity to its corporate name. There are no minimum share capital requirements for Swiss general partnerships. When it comes to the liability of the founding member, all partners will be held individually and jointly responsible for the general partnership’s debts and obligations. A Swiss general partnership may extend its business activities and bring more partners or may change its legal status.
General partnerships in Switzerland are required to register for taxation purposes if their annual turnover is at least 500,000 CHF.
The taxation of general partnerships in Switzerland
Partnerships in Switzerland are taxed depending on whether they are limited or general partnerships. For general partnerships, tax liability in Switzerland is attributed to the partners and not to the partnerships as a legal entity. Partners will pay their taxes based on the capital invested in the general partnership. Also, partners will be subject to the personal income tax in Switzerland, but may deduct certain losses when calculating their taxable base.
What are the advantages of Swiss general partnerships?
As mentioned above, general partnerships are suitable for small entrepreneurs and have the great advantage of no capital requirements or registration with the Swiss Companies Register if no business activity is carried out. Moreover, forming a general partnership is quite a straightforward and simple process. Foreign citizens may also establish a general partnership as long as they obtain a Swiss work permit.
Here is also a video on this subject:
How many businesses operate in Switzerland?
According to the most recent data available for 2022, the majority of businesses operating in Switzerland were small and medium-sized enterprises (SMEs). Among them:
- 5,511 were registered as general partnerships;
- they employed 20,627 people;
- there were also 8,278 simple partnerships, employing 34,452 workers.
We can also assist with opening a bank account in Switzerland for your partnership.
If you want to open a general partnership in Switzerland and need legal assistance, please contact our Swiss attorneys.