Source: https://www.kmu.admin.ch/kmu/en/home/savoir-pratique/creation-pme/les-differentes-formes-juridiques/societe-en-nom-collectif.html
Timestamp: 2020-07-06 12:21:29
Document Index: 414879958

Matched Legal Cases: ['Art. 552', 'Art. 944', 'Art. 950', 'Art. 951', 'Art. 552', 'Art. 552', 'Art. 552', 'Art. 557', 'Art. 531', 'Art. 557', 'Art. 531', 'Art. 568', 'Art. 559', 'Art. 957', 'Art. 563', 'Art. 557', 'Art. 542', 'Art. 181', 'Art. 333', 'Art. 954']

The various legal forms
Zurück Zurück zu Setting up
The general partnership selected
The general partnership: legal foundations
The general partnership is ideal for small businesses whose partners have personal and business proximity. The founding document is simple.
2. Ideal for/main purpose
5. Disadvantages
6. Legal nature
7. Creating the company name
9. Registration in the commercial register
10. Number of owners or partners required
11. Capital requirement
12. Contributions in kind to replace cash
13. Organization and corporate bodies
14. Powers of the management/corporate bodies
15. Responsibility/obligation for additional payments
16. Use of foreign investors or funds
17. Allocation of profits/liability for losses
18. Formation of reserves
19. Accounting obligations
21. Start-up costs
22. Management and representation
23. Termination/transfer
24. Provisions relating to nationality and domicile
Art. 552–593 CO
The general partnership is ideal for small businesses whose partners’ personal interests are close to their business interests.
The general partnership lends itself in particular to the joint carrying on of a self-employed activity as a trading company, and for small craft-type businesses run by people with close links.
A general partnership is a legal structure for a business set up by two or more individuals. In Switzerland, there are more than 8,000 businesses having adopted this legal structure. It is often chosen by small businesses managed by several individuals. Law firms, restaurants, craft businesses and local commercial businesses are usually organized as general partnerships.
Establishing a general partnership does not require any start-up capital.
The instrument of foundation is relatively simple, as is the structure of the company's internal organization (depending on the number of partners).
The question of liability can be problematic, given that partners assume unlimited joint and several liability. There is therefore interdependence between partners.
The right of scrutiny of all partners can hinder entrepreneurial flexibility.
The professional flexibility of partners is also limited by the ban on competition, for example.
The general partnership comes under the category of partnerships.
In addition to the essential elements required by law, any company name may contain details about the persons involved, indications on the company activities, or any creative name, provided that it is in line with the truth, is not misleading, and does not harm the public interest (Art. 944 (1) CO).
Apart from this core part of the name, which can be freely chosen, an indication of legal structure is added to the company name (Art. 950 CO). This may be written in full or in abbreviated form. The list of abbreviations is set by the Swiss Federal Council (the list can be found at: Handelsregisterverordnung (HRegV) (in German only)).
The chosen company name must also be clearly differentiated from any other company name already registered in Switzerland. (Art. 951 CO)
The general partnership begins with registration in the commercial register and conclusion of a company contract, although the latter is optional (but strongly recommended), governing both company shares and shares in the profit (Art. 552 CO).
The members of a general partnership, with or without a commercial activity, are required to ensure that it is registered in the commercial register (Art. 552 CO).
A general partnership is made up of two or more individuals who join forces in carrying out their activity (Art. 552 CO).
Individuals must be authorized to work as self-employed persons by the social insurance agencies. To do this, they must register with the relevant compensation fund corresponding to the company’s registered office.
There is no minimum equity requirement for a general partnership. The share capital amount and shares are fixed (preferably) in the company contract (Art. 557 CO, Art. 531 CO).
Each partner must make a contribution to the general partnership, which may consist of cash, securities, or other assets, or work. (Art. 557 CO, Art. 531 CO).
The general partnership does not provide for the constitution of corporate bodies. However, limited partnerships are warmly recommended to draw up a company contract between partners. They may, if they wish, resort to a trust company or an audit body.
In the first instance (primarily), the company assets answer for the obligations of the general partnership. In the second instance (on a subsidiary basis), partners assume unlimited joint and several liability for the obligations of the general partnership with their personal wealth (Art. 568 CO).
The possibilities of financing a general partnership using external funds are limited and largely depend on the (guaranteed) wealth of the partners. In general partnerships, holdings of third parties can only be acquired using their own equity. In addition, the partners’ solvency and the company’s risk require guarantees furnished on the basis of business or personal assets. Third-party security is possible.
In a general partnership, allocation of profits and liability for losses are provided for in the company contract (Art. 559 CO).
Profits: each partner is entitled to withdraw from company funds the profits, interest and fees relating to the past financial year and to collect their share in company assets.
Losses: when losses have reduced part of the company assets, the partners maintain their right to payment of fees and interest for their reduced share, but may not withdraw profits before their share has been reconstituted.
No partner is required to make a contribution higher than the contribution provided for in the contract, or to deduct losses from their contribution.
No specific regulation.
General partnerships with turnover not exceeding CHF 500,000 must, at a minimum, keep simplified accounts which comprise only receipts, expenses and assets.
General partnerships which have realized turnover equal to or more than CHF 500,000 in the last financial year must keep accounts and submit accounts in accordance with the rules established in the Code of Obligations (Art. 957 CO et seq.).
Partners are taxed on their share of income and assets in the company and on their personal income and assets. Tax planning may be applied when the business and the home address are on the same premises or in different places. In situations where the registered office and home address are not in the same place, the owner of the general partnership pays, overall, less tax.
Sometimes, the registered office is located in a place which is more advantageous in terms of tax rate. In this case, the sole proprietorship offers better advantages (see example below).
Comparison of general partnership taxation versus sole proprietorship taxation (company in city, home in suburbs).
(Values in CHF)
Profit rec. in annual accounts
General partnership: rec. in partner contract, 6% of equity of CHF 800,000 is entered into accounts as expenses:
Entrepreneur's salary
Total deductions/profits
Registered office tax
General part.:
rate of 25%
BPCO: from profit and
interest on equity
Sole prop.: from profit
Tax on use of residence
General part.: on entrepreneur’s salary
General remark: calculation exclusive of OASI (AHV), with notional interest rates; no general return, (to be assessed on a case-by-case basis).
Source: KMUinfo, 1/2010 (Only in German)
The start-up costs of a general partnership include fees for advice on start-up procedures, which total between CHF 0 and 1,000; attorney’s fees for the company contract, of between CHF 2,000 and 40,000; plus costs of registration in the commercial register, of CHF 240.
The management function of the general partnership is the responsibility of all partners, provided it is not governed differently according to a decision of the partners.
At least one partner must be authorized to represent the company. If the commercial register does not contain any entry stating otherwise, third parties acting in good faith may allow that each partner has the right to represent the company (Art. 563 CO).
A general partnership may not be transferred by one partner without the consent of the other partners (Art. 557 CO, Art. 542 CO).
In material terms, the partial or full transfer of the activity is carried out by the transfer of assets and liabilities. The transfer of the assets or activities of a general partnership is governed by the provisions of the Law on Mergers (Art. 181 IV CO). For the transfer of employees, Art. 333 CO shall apply.
The chosen company name can be kept indefinitely. In the case of sole proprietorships, a change of partner shall have no impact on the company name and the choice of another legal structure shall, ideally, affect only the indication in the name of said legal structure (Art. 954 CO).
In a general partnership, the owner does not need to have an established address in Switzerland, but they must present a work permit and a residence permit.
You can find additional information about this at:
Setting up a business as a foreign national
Comparison of legal forms (2016) (PDF, 154 kB, 14.11.2019)SME Portal - State Secretariat for Economic Affairs (SECO)
Start-up costs (2017) (PDF, 49 kB, 14.11.2019)EasyGov
Last modification 29.06.2020
https://www.kmu.admin.ch/content/kmu/en/home/savoir-pratique/creation-pme/les-differentes-formes-juridiques/societe-en-nom-collectif.html