Step-by-step guide:
How to set up a general partnership in Switzerland

The general partnership is a popular legal form for small companies founded by two or more natural persons. It offers flexibility, with the partners having unlimited and joint liability. In this guide, you will learn how to set up a general partnership in Switzerland step by step.

Business idea and planning

At the beginning you should have a clear business plan createthat includes your business idea, market analysis and financial planning . A solid plan helps to define the roles of the shareholders and minimize potential risks. Since the shareholders are liable with all their private assets, thorough planning is crucial.

Choose company name

In contrast to other legal forms, a general partnership may also have a fantasy name name. The addition "Kollektivgesellschaft" or "KlG" is required so that the legal form remains recognizable. Check the availability of the name in the commercial register (ZEFIX) to ensure that it is not already taken.

Draw up articles of association

Although a articles of association is not mandatory, it is strongly recommended in order to clearly regulate the cooperation between the shareholders. The agreement should state the following:

• Profit and loss distribution
• Decision-making and management
• Withdrawal regulations for shareholders
• Terms of dissolution of the company

A written contract helps to avoid disputes and gives the shareholders certainty about their roles and responsibilities.

Commercial register entry

The entry in the commercial register is mandatory for a general partnership obligatory. Registration takes place via the cantonal commercial register office and confirms the official formation. The entry also strengthens trust with customers and business partners.

Value added tax (VAT) registration

If your general partnership has a turnover of more than 100'000 CHF per year, you must register with the Federal Tax Administration (FTA) for value added tax (VAT). If your turnover is less than this, you can register voluntarily in order to claim the input tax deduction deduction.

Registration with the AHV compensation fund

The partners of a general partnership are deemed to be self-employed and must register with the AHV compensation fund in order to pay their social security contributions. It is important to register at an early stage in order to avoid legal and tax disadvantages. If the general partnership is founded as a sideline, a reduced AHV contribution can generally be applied for.

Accounting and taxes

The general partnership must maintain clean and transparent accounting must keep clean and transparent accounts. The accounting obligation depends on the turnover:

• With an annual turnover of less than CHF 500,000, a simple bookkeeping (income and expenditure account) can be used.
• For higher turnover, a double-entry bookkeeping is prescribed.

All shareholders must report their profits in their private tax return as the general partnership itself is not a separate legal entity and is not taxed separately.

Accident insurance (UVG) and other insurances

If you employ staff, you must have accident insurance in accordance with UVG to cover both occupational accidents and non-occupational accidents. Occupational pension provision (BVG) is mandatory as soon as employees reach a certain income.

Open a free business multi-currency account with CH-IBAN

It makes sense to open a business account for your general partnership that allows you to hold several currencies and exchange them at favorable rates. A free multi-currency account with a Swiss IBAN gives you the flexibility to transact in different currencies at low cost, which is essential these days. Amnis Treasury is the best free business account in Switzerland. (Receive a CHF 200 bonus when you open !)

Start business operations

Once all legal and tax formalities have been completed, you can officially commence business operations. Make sure that all shareholders fulfill their obligations under the articles of association and the bookkeeping to avoid legal problems.

Conclusion

Setting up a general partnership in Switzerland offers a flexible and relatively simple way of running a joint company. As the partners are liable with their private assets, it is crucial to make clear arrangements in advance and carry out sound planning. With a well-drafted partnership agreement and compliance with legal obligations, the general partnership can be a successful legal form for small businesses.