The general partnership is ideal legal structure for a small business set up by two or more individuals who join forces in carrying out their activity. Establishing a general partnership does not require any start-up capital and the instrument of foundation is relatively simple. However, the partners assume unlimited joint and several liability.

The members of a general partnership, with or without a commercial activity, are required to ensure that it is registered in the Commercial Register. The management function is the responsibility of all partners unless the partners decide differently. At least one partner must be authorised to represent the partnership. A partner is not required to have an established address in Switzerland but must present a work permit and a residence permit.

General partnerships with turnover under CHF500,000 must, at a minimum, keep simplified accounts which comprise only receipts, expenses and assets. If turnover exceeds CHF500,000 in the last financial year, a general partnership must keep accounts and submit accounts in accordance with the rules established in the Code of Obligations.

Partners are taxed on their share of income and assets in the company and on their personal income and assets.

A limited partnership is often chosen when a sole proprietorship or general partnership needs additional equity. The establishment of a limited partnership does not require any start-up capital. Limited partnerships, operated in the form of a commercial company, must be registered with the Commercial Register.

A limited partnership is a partnership that contracts at least one natural person as an indefinitely liable partner (general partner) and at least one natural person, legal entity or commercial company as a partner with limited liability (limited partner).

The company assets answer for the obligations of the limited partnership. Limited partners (investors and creditors) assume subsidiary and joint and several liability, up to the total amount of their share. Operational management is clearly separated from financial investors.

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