The simple partnership, a quick and easy solution

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. 530551, 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.


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Last modification 27.09.2019

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