Karpeo · Business in Switzerland
General partnership in Switzerland: setting up an SNC and understanding the risks
A Swiss general partnership, known in French as a société en nom collectif or SNC, lets at least two individuals run a business together without statutory minimum capital. Registration is compulsory. In return for this relatively simple structure, partners face personal, unlimited and joint and several liability under the conditions set by law.
By Sarah Prieur · Swiss certified public accountant
The essentials
- An SNC requires at least two individuals; an SA or Sàrl cannot be a partner.
- Commercial register entry is compulsory, without a turnover threshold.
- There is no statutory minimum capital, but business obligations can expose private assets.
- A written partnership agreement organises internal relations without overriding creditors’ statutory rights.
- Accounting, partners’ personal taxation, social insurance and VAT must each be assessed separately.
What is a Swiss general partnership?
A general partnership is a partnership in which two or more individuals carry on an activity under a common business name. Articles 552–593 of the Swiss Code of Obligations govern the structure.
The SNC is not a legal person. Nevertheless, it can acquire rights, incur obligations, bring proceedings and be sued under its business name. Do not confuse it with a Sàrl or assume that registration gives it corporate legal personality.
It may suit an activity run directly by a small group of partners. Their close relationship does not replace a risk assessment: obligations incurred through the business can affect their personal assets.
A legal entity cannot become a partner in an SNC. If two existing companies want to collaborate, consider a different arrangement, such as a simple partnership suited to the cooperation or a corporate structure. Our comparison of Swiss legal forms provides an overview.
What does personal, unlimited and joint and several liability mean?
The partnership’s assets answer for its debts. Partners can then be pursued personally under the conditions of article 568 CO: in particular, if the partnership has been dissolved, enforcement against it has been unsuccessful or the partner is bankrupt. A personal guarantee can create a separate obligation.
| Term | Consequence for the partner |
|---|---|
| Personal | Private assets can be exposed. |
| Unlimited | Liability is not capped at the amount contributed to the partnership. |
| Joint and several | A creditor can claim the whole debt from a liable partner, rather than only that partner’s internal share. |
This is why low formation costs should never be the sole reason for choosing an SNC. Assess leases, loans, employee commitments and possible damage claims before deciding.
How to set up a general partnership in Switzerland
1. Define the partners, activity and contributions
Check that each participant is entitled to carry out the proposed activity. Professional, residence or work authorisation may be required. Although there is no statutory minimum contribution, the budget must cover the actual needs of the business.
2. Choose the business name and registered office
The name must indicate the legal form and be distinguishable from other business names already registered in Switzerland. Unlike a sole proprietorship’s name, it does not necessarily need to include a partner’s surname. Our guide to Swiss legal business names explains the checks.
3. Put the partnership arrangements in writing
The SNC rests on an agreement between its partners. A written document is generally not a universal formation requirement, but it is strongly recommended. Particular transactions, including certain contributions, may require specific formalities.
4. Register the SNC in the commercial register
Registration is mandatory. The CHF 100,000 registration threshold relevant to certain sole proprietorships does not apply. Prepare the application, partner details, registered office, business purpose and signing powers with the documents required by the competent register.
A partnership carrying on commercial activities can exist before registration. For a non-commercial activity, registration is constitutive of the SNC. Starting to sign contracts before completing the formalities therefore does not avoid the consequences of the relationship.
5. Arrange affiliations and administration
Notify the compensation office of the partners’ activities. Arrange banking, insurance, accounting and a VAT assessment. Include professional advice, registration fees and working capital in your budget. Our guide to business financing helps distinguish startup spending from ongoing cash needs.
For a Geneva project, prepare the municipality, address, identities and signing powers together. Use the requirements for an SNC rather than a Sàrl incorporation checklist. Registered information should be consistent with the partnership arrangements.
What should the partnership agreement cover?
A written agreement has practical legal value. It clarifies each partner’s contributions and rights, even though it cannot remove statutory protections for third parties. Cover at least:
- Cash, equipment and work contributions, including their valuation.
- The division of work and extended absences.
- Management responsibilities and signing authority.
- Spending and borrowing requiring joint approval.
- Agreed remuneration and the sharing of profits and losses.
- Financial information, access to records and private withdrawals.
- Conflicts, departures, incapacity and death.
Distinguish internal decision-making from authority to bind the SNC towards third parties. A spending limit in the agreement is not necessarily enforceable against a supplier acting in good faith. Registered signing powers and actual practice should be consistent.
It is easier to agree these rules before the first unpaid bill or disagreement. Where sensitive information is exchanged before the project is settled, an appropriate non-disclosure agreement may also be useful; it does not replace the partnership agreement.
Accounting, tax, AVS and VAT
Accounting
Below CHF 500,000 of turnover in the preceding financial year, a partnership can keep simplified records of receipts, expenses and assets. Above that amount, the full accounting and financial reporting regime applies under article 957 CO. Assess the transition as turnover approaches the threshold rather than waiting until the records are incomplete.
Simplified accounting still requires proper records and document retention. Full accounts may be useful earlier to track receivables, stock and partners’ balances. Read our guide to accounting for sole proprietorships and partnerships.
Tax and private withdrawals
The SNC is not taxed on its own profits in the same way as an SA. Partners declare their shares of business income and assets under the applicable personal tax rules. Leaving cash in the partnership’s bank account does not automatically prevent taxation of allocated profit.
A private withdrawal is not, by itself, a business expense reducing profit. Keep partner movements separate from operating costs. An accountant can help maintain clear capital, withdrawal and result allocations.
Social insurance
Arrange the position with the compensation office. Active partners generally fall under the self-employed system and do not have unemployment insurance cover for that self-employed activity. Our guide to self-employed AVS contributions explains the calculation.
VAT
The partnership can also be liable for VAT. For an ordinary business, the CHF 100,000 threshold concerns qualifying worldwide turnover, with exclusions and other conditions to assess. It is separate from both the accounting threshold and commercial register entry. See the Swiss VAT guide before assuming that simplified bookkeeping means no VAT obligations.
SNC or Sàrl: what should guide the choice?
An SNC avoids the statutory minimum capital required by a Sàrl and allows flexible internal arrangements. It also exposes partners personally to business obligations, including those validly incurred by fellow partners.
A Sàrl requires CHF 20,000 of fully paid-up capital and formal incorporation. Its assets generally answer for its debts, subject to exceptions such as personal guarantees and liability arising from the conduct of company officers.
Consider the length of the lease, employee commitments, borrowing, potential damage claims and each founder’s ability to bear a loss. An activity that appears simple can involve substantial contractual commitments.
Compare the options with actual figures. An initial saving may be minor relative to the risk of a multi-year obligation. For a broader corporate comparison, see Sàrl versus SA.
Plan for a partner joining or leaving
A new partner does not only participate in future profits. Under article 569 CO, they are also liable for existing partnership debts under the statutory rules. Review outstanding obligations before admission.
A departing partner is not automatically released from all previous debts. Arrange the departure date, valuation, guarantees and commercial register changes. A one-person SNC cannot simply continue indefinitely in the same form after the other partner leaves.
Before a departure or restructuring, prepare current accounts, contracts, debts, personal security arrangements and a tax assessment. Removing a name from the register does not, by itself, settle third-party rights. If the business itself is to be transferred, our guide to selling a Swiss business explains the wider issues.
Before committing to a partnership, agree how you will work, fund the activity and handle a departure. Our co-founders’ decision guide provides a practical agenda for those discussions.
Frequently asked questions
Does a general partnership need CHF 100,000 turnover before registration?
No. Registration in the commercial register is compulsory for a Swiss general partnership without waiting for that threshold. Sole proprietorship registration rules must not be applied to an SNC. The CHF 100,000 VAT threshold is a separate test with its own scope and conditions.
Does an SNC have legal personality?
It is not a legal person. Nevertheless, it can acquire rights, incur obligations, sue and be sued under its business name. That capacity does not remove the partners’ personal liability under the Code of Obligations.
Can partners limit liability in their agreement?
They can allocate losses and rights of recourse internally. An internal clause limiting liability is not effective against the partnership’s creditors. It does not turn an SNC into a limited liability company.
Can one person create a general partnership?
No. At least two individuals are required. A sole founder can assess a sole proprietorship, Sàrl or SA. If one partner leaves a two-person SNC, the future structure and the consequences of the departure need to be arranged.
Must profits always be shared equally?
The agreement can provide another allocation. Distinguish agreed remuneration, interest on contributions and the remaining profit. Statutory default rules apply where the partners have not made an effective alternative arrangement.
Sources and verification
English edition checked on 10 October 2026. Key provisions include articles 552–593 and 957 CO.
About the author
Sarah Prieur
Sarah Prieur is a Swiss certified public accountant, a partner and head of operations at Karpeo. She supports businesses, self-employed professionals and entrepreneurs with accounting, tax and VAT matters. Before joining Karpeo, she spent eight years in financial audit at PwC Switzerland, progressing to manager.
Read more about Sarah Prieur →