Forming a general partnership in Switzerland: requirements, liability and process

Between the sole proprietorship and the GmbH lies an often-forgotten legal form: the general partnership (Kollektivgesellschaft, KolG). It is the traditional form for two or more people running a business together – and it remains common in gastronomy, professional practices and family businesses. Here is how the KolG works, what unlimited liability means in practice, and whether it fits your venture.

The KolG in 30 seconds

Criterion	General partnership
Partners	At least 2
Minimum capital	None
Liability	Unlimited and joint, subsidiary
Commercial register	Entry mandatory (for commercial businesses)
Bookkeeping	Simplified accounting possible up to CHF 500,000 revenue
Company name	Must contain a partner’s surname + “KolG”
Taxes	Profit is taxed directly at the partners, pro rata

The KolG is a personal partnership: capital is not the focus – the partners and their mutual trust are. That suits teams who know each other well – and at the same time carries its biggest risk.

How to form a general partnership

1. Draft the partnership agreement. The written agreement governs the company name, registered office, purpose, contributions, profit distribution and representation. A notary is not strictly required but recommended for complex setups.
2. Choose the company name. It must contain the surname of at least one partner and carry the suffix “KolG”, e.g. “Müller & Meier KolG”. The rules resemble those of the sole proprietorship.
3. Commercial register application. File with the register office of your canton – with the agreement, signatures and ID documents. Costs barely differ from other commercial register applications.
4. AHV registration. Every partner working self-employed in the business registers with their compensation fund – with graduated contributions as in the sole proprietorship.

No notary appointment, no capital, no deposit – formation is remarkably simple. Many formation platforms support the KolG too; our provider comparison shows who covers what.

Liability: the heart of the KolG

All partners are liable without limitation and jointly – with their entire private assets, including for obligations entered by another partner. At least the liability is subsidiary: creditors must first seek recovery from the partnership assets.

In practice:

• You carry your partners’ full risk.
• If payments fail, creditors can pursue you privately once the business assets are exhausted.
• Personal guarantees on bank loans amplify this risk.

Compared with the GmbH, where your private assets are fundamentally protected, this is a weighty difference. That is precisely why the GmbH is today’s more common choice for multi-founder ventures.

Taxes and bookkeeping

Profits of the KolG are not taxed at the partnership level but pro rata directly at the partners as self-employed income – as in the sole proprietorship. Losses are likewise deductible per share.

For bookkeeping, the simplified form is permitted up to CHF 500,000 revenue; beyond that (or from 50 employees / CHF 20 M balance sheet) double-entry bookkeeping becomes mandatory. How to set up clean simple bookkeeping is explained (in German) on buchhaltung-für-selbständige.ch: starting your bookkeeping.

KolG or GmbH? The rule of thumb

• Choose the KolG if you trust each other blindly, do not want to lock up capital and the business risk stays manageable.
• Choose the GmbH if limiting liability matters, capital interests diverge, or investors might join later.

And if the business grows: a KolG can later be converted into a GmbH or an AG. For your first invoices, the free QR invoice generator from gratisrechnung.ch works immediately; to weigh the legal-form question more broadly (in German), selbständige.ch has a guide on choosing the right legal form.