A simple partnership is the most basic form of a partnership. It involves a contract under which two or more persons agree to unite their efforts or their resources to achieve a common goal (Art. 530–551, Swiss Code of Obligations).
In general, simple partnerships are only created for a short period; an example might be a construction consortium that is dissolved once the building project is finished.
From the outside, a simple partnership looks like an economic interest collective. It has no legal personality, therefore, and cannot be represented under a company name. Thus, it often happens that, in practice, a company is formed without its participants even realizing it.
In terms of liability, this type of company is not without its pitfalls: seen from the outside, the partners are liable, jointly and severally and without limit, for the obligations of the whole company. There is only limited liability when a partner acts clearly in their own name.
The creation of a simple partnership does not require any specific formalities. It is not possible to register the partnership on the trade register. It is recommended that a contract be drawn up to govern the management of the partnership, the division of labor and areas of expertise, contributions, and distribution of earnings and losses among other things.
