Setting up a general partnership in Switzerland: pros and cons

A general partnership is a legal form that is formed by at least two people. It is particularly suitable for small partnerships in which the partners work closely together and are jointly and severally liable.

If a general partnership is not suitable for your project, you can find more information on alternative legal forms in our articles on LLCs and PLCs.

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Forming a general partnership: advantages

• No capital required: In contrast to an LLC or PLC, there is no minimum capital requirement for a general partnership. This makes it considerably easier to get started in business.

• Low administrative costs: The formation costs for a general partnership are significantly lower than for other legal forms, as no notary fees are required.

• Fancy name: A creative and unique name can help you stand out in the market and be more easily recognized by customers.
  

• Withdrawal from 2nd/3rd pillar possible: To withdraw from the pension fund, self-employment must be your main occupation. This means that you are not allowed to be gainfully employed, i.e. you are not employed by an employer and receive a salary. Furthermore, self-employment only exists when setting up a sole proprietorship or a general partnership.

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Setting up a general partnership: disadvantages

• Personal, joint and several liability: All partners have unlimited liability with their private assets. This represents a considerable risk, especially if the company gets into difficulties.

• No unemployment insurance possible: Partners in a general partnership in Switzerland are considered to be self-employed and therefore generally have no claim to unemployment insurance (ALV). Unemployment insurance (ALV) only covers employees.

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Conclusion‍

The general partnership offers flexible decision-making processes and low start-up costs. However, founders should be aware of the unlimited liability, which carries a high personal risk.

Startups.ch helps you to easily set up a general partnership – get started today!

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