The general partnership

If you want to set up a company together with a partner, a general partnership may be the right legal form for you.

As with a sole proprietorship, no minimum investment is required.

A general partnership is a company in which two or more natural persons join together to form a commercially managed company.

A key feature of the general partnership is that no minimum capital is required. This feature makes the general partnership particularly attractive for founders who want to start up without large financial resources. However, the partners usually contribute equity capital to finance the company and cover running costs.

The absence of a minimum capital requirement makes it easier to get started, but requires a high degree of trust and financial responsibility among the partners.

Like other forms of company, the general partnership can be used for a variety of business purposes.

It is particularly suitable for small and medium-sized companies in trade, commerce and services. The business purpose and business activities are defined in the articles of association and must be entered in the commercial register if the annual turnover exceeds CHF 100,000.

The flexibility in the choice of business purpose is a major advantage of this form of company.

At least two natural persons are required to form a general partnership. These partners have unlimited and joint and several liability with all their private assets for the company's liabilities.

This means that all partners are jointly and severally liable for the debts and liabilities of the company.

Close cooperation and trust between the partners are therefore crucial to the success of the general partnership.

The general partnership has many advantages. One of the biggest advantages is the simple and inexpensive formation without minimum capital requirements. The partners can make decisions flexibly and quickly, as no external approvals are required.

In addition, the partners benefit from a high credit rating as they are liable with their personal assets. This personal liability can strengthen the trust of business partners and lenders.

The simple structure and the direct personal involvement of the shareholders also promote close cooperation and the ability to react quickly.

One of the disadvantages of the general partnership is the unlimited liability of the partners. Each partner is personally and jointly and severally liable for the debts and liabilities of the company with their entire private assets. This can threaten the existence of the company in the event of financial difficulties.

In addition, the close ties between the shareholders can lead to conflicts if different opinions or interests clash.

Another disadvantage is the limited ability to raise capital, as no shares can be sold to generate additional capital.

In summary, the formation of a general partnership in Switzerland offers a simple and flexible way for several people to run a company together. However, the advantages of the simple formation and the direct participation of the partners must be weighed against the risks of unlimited liability and the potential for conflict.