General partnership (Kollektivgesellschaft)

How a general partnership works under Swiss law

The general partnership (Kollektivgesellschaft, société en nom collectif, società in nome collettivo) is governed by Art. 552–593 of the Code of Obligations (CO). Two or more natural persons agree to run a commercial business under a shared name, without limiting their personal liability towards creditors. Companies cannot be partners. The partnership has no legal personality of its own, but under its name it can acquire rights, take on obligations, sue and be sued (Art. 562 CO).

There is no minimum capital requirement. Partners contribute what they agree in the partnership agreement: cash, assets, work or a combination. The absence of a capital floor makes the form accessible, and creditors rely on the partners' personal wealth as security.

Liability of the partners

Each partner is liable for all of the partnership's debts jointly and with all personal assets (Art. 568 CO). An agreement among the partners that limits this has no effect on creditors. The liability is subsidiary: a creditor can pursue a partner personally only once the partnership has been dissolved or pursued without success, or when the partner is bankrupt. This holds even after the partner has left.

The unlimited personal liability distinguishes the general partnership from the GmbH, where only the company's assets answer for its debts. In the limited partnership (Kommanditgesellschaft, Art. 594 ff. CO), at least one partner is liable only up to a fixed amount, the Kommanditsumme.

Registration and the firm name

The partners must have the partnership entered in the commercial register (Art. 552 para. 2 CO) at the place of its registered office (Art. 554 CO). A partnership that runs no commercial business becomes a general partnership only when it is registered (Art. 553 CO). Since the company-name reform of 1 July 2016 the partners may choose the name freely, provided it states the legal form (Art. 950 CO), so new names end in "Kollektivgesellschaft", "KlG", "SNC" or a similar form. Partnerships registered before that date may keep their old name, often built from the partners' surnames.

Every registration, change of partner and dissolution is published in the Swiss Official Gazette of Commerce (SHAB). The guide to checking a Swiss company shows how to verify the current entry.

How it appears in the register and in SHAB notices

The register entry lists the name, the registered office, the start date, the purpose, each partner and the persons authorised to sign (Art. 41 Commercial Register Ordinance). Partners often sign by joint signature by two, sometimes with sole signature. Employees may receive a Prokura. A SHAB notice for a new general partnership lists each partner under "Eingetragene Personen" with place of origin, residence and signing authority. No capital figure appears.

What to check when dealing with one

• Partners: every person listed in the entry as a partner is personally liable for the debts. Check who the current partners are and whether any recent changes have been published.
• Signing authority: the entry shows who can bind the partnership. A partner with sole signature can commit the firm alone; with joint signature by two, two signatures are needed.
• No capital disclosure: the register does not show how much the partners have contributed. The partnership's solvency depends on the business and on the partners' personal assets.
• Dissolution: when a partner leaves or dies, the partnership is dissolved unless the partners agreed beforehand to continue without them (Art. 576 CO). With only two partners, the remaining one may be able to take over the business as a sole proprietorship (Art. 579 CO).