When two or more natural persons (i.e. flesh and blood individuals, as opposed to legal persons) go into partnership in order to jointly operate a company according to business regulations, we call this a general partnership (Art. 552–593, Swiss Code of Obligations).
Any company name may contain, as well as the essential elements required by the law, specifications of the persons involved, indications of the company activities, or any fancy designation, provided that it is in line with the truth, is not misleading, and does not harm the public interest (Art. 944, para. 1, Swiss Code of Obligations).
See also forming the company name
A general partnership has no legal personality of its own and is therefore not a legal person. On the other hand, it may be represented under its own name in business dealings and acquire rights, contract obligations or represent a party in deals, bring proceedings, or be prosecuted.
As a company, a general partnership is not liable for corporate income tax. However, the partners are directly taxed on their salaries, any share of the earnings received, interest on equity capital, and their personal wealth.
The regulations relating to liability present risks for the partners: they are liable to the extent of their personal wealth, jointly and severally and without limit for up to five years after the liquidation of a company.
A general partnership with a business activity is established with effect from the signature of the partnership agreement (it is highly recommended that the partnership agreement be reviewed by a specialist). The partners are then obliged to register their company on the trade register (Art. 552, para. 2, Swiss Code of Obligations). Registration is purely declaratory. In another case, a general partnership with no business activity is formed as such only when it is entered in the trade register (Art. 553, Swiss Code of Obligations). In this case, registration is a prerequisite and is substantive.
