What is a simple partnership?
A simple partnership is a contractual relationship between two or more persons (natural or legal persons), pursuing a common goal with common efforts or means (Art. 530 para. 1 CO) but not operating a business on a commercial basis according to the Swiss Code of Obligations.
The société simple is therefore a contract, not a legal entity or company in its own right.
Common use
In the business world, single companies are often used, for example in joint ventures or consortiums in the construction sector.
Advantages of a simple partnership
The simple partnership offers a number of advantages, including flexibility and speed of creation.
Flexibility
The simple partnership can, to a fairly large extent, be adapted to the specific needs of the partners. If they do not opt for specific rules, the provisions of articles 530 to 551 of the Swiss Code of Obligations apply.
Easy to install
Unlike a public limited company or Sàrlthe creation of a simple partnership is a relatively simple process (in part, because it's only a contract, not a business venture.
All that is required is that the founders agree to jointly pursue an objective
with joint efforts or resources. There are generally no formalities to comply with and, although it is strongly recommended, a written agreement between associates is not necessary.
Disadvantages of a simple partnership
Although a simple company is relatively straightforward to set up, it also has a number of disadvantages that need to be taken into account.
Liability
Individual partners (considered as entrepreneurs) have unlimited joint and several liability for the company's assets and liabilities.
A simple partnership cannot enter into contractual relations with third parties, assume rights or liabilities, or own assets.
Unequal sharing
The profits and losses of a simple partnership must be shared equally between the partners, irrespective of the size and nature of their contributions (art. 532 CO).
Dissolution of a société simple
A simple partnership entered into for an indefinite term may be terminated by any of the partners, subject to six months' notice (art. 546 para. 1 CO).
It is also possible to terminate a simple partnership for good reason, with immediate effect. Such termination will only be possible if the continuation of the company is absolutely unacceptable to one of the partners.
Should I set up a simple partnership?
It all depends on your objectives and those of your partners. Before making a choice, it's essential to find out everything you need to know. legal forms of enterprise in Switzerland. Sometimes, other forms of business (especially those involving limited liability) may be better suited to your objectives.
Frequently asked questions about simple partnerships
How to set up a simple company in Switzerland?
- Setting a common goal: You and your partners must agree on a common goal to pursue.
- Written agreement: Although strongly recommended, a written agreement between the partners is not necessary for the creation of a simple partnership, but will be very useful.
- Start of activity: Once you've completed the above steps, you can easily get started.
What's the difference between an SnC and a simple partnership?
The main difference between a SnC (General partnership) and a simple partnership in Switzerland is as follows:
SnC (General partnership) The SnC is a company in which all partners have unlimited joint and several liability for the company's debts. It is often used for small businesses or craft activities.
Simple partnership The simple partnership: It has no legal personality and is often used for temporary joint ventures or specific projects. Partners are also liable for debts (on an individual basis), but the simple partnership is less formal in terms of structure and regulation, as it can be modulated according to the needs of the partners.
What's the difference between a simple partnership and a sole proprietorship?
Simple partnership A partnership is a contract between two or more individuals or legal entities who pool their resources or activities for a common purpose. Partners are jointly and severally liable for the company's debts.
Sole proprietorship : L'sole proprietorship is run by a single person, who is fully liable for all the company's debts using all his or her assets. If a sole proprietorship's sales exceed a certain threshold, it must be registered with the Commercial Register.
Is a simple partnership considered a business?
No, under Swiss law, a simple partnership is not considered a company in the strict sense of the term. It is a contract, and therefore governed by contract law.
