Foundation of a General Partnership (KlG)
In many respects the KlG (General Partnership) is similar to the individual company (sole proprietorship). It is also suitable for personal undertakings and has similarities in terms of liability and social security. However, at least two natural persons are required for their formation. It is ideal for small businesses.
|Seed Capital||No minimal capital needed. Foundation fees.|
|Liability||Personal liability of the owners.|
|Company Name||Must include the suffix KlG|
|Number of Founders||At least two natural persons|
|Taxes||No separate tax return. Each associate must declare his/her share in the profits in the personal tax return.|
|Commercial Accounting||Mandatory for annual sales of CHF 500'000 or more|
|VAT Liability||Mandatory for annual sales of CHF 100'000 or more|
|Social Insurances||Mandatory social insurance contributions. Separate registration with a cantonal compensation office|
The Founding Process
Good preparation is half the battle won! Building a company and putting it on course involves some unexpected surprises. That’s why a well-thought-out plan is needed. We support you and assume the formalities.
Choose the legal structure and fill out the online form
First meeting at the Treuhandzentrum Zürich, free of charge
We’ll take care of documentation processing
Signing and certifying of documents at the notary’s office
Entry in the Commercial Register
Start now and take advantage of a free* first consultation.
Have you decided to start a General Partnership or are you still unsure about the right legal form? We will accompany you through the foundation process and beyond, just tell us your plans. We will contact you immediately after receiving your duly completed form to arrange an appointment for a free first meeting.
*The first consultation is free of charge if it leads to further cooperation. We charge for consulting or information only on a time and material basis.
KlG (General Partnership) in Detail
Company Name and Commercial Registration
The company name can be an imaginary name but must contain the suffix "KlG") The entry in the Commercial Register has purely a declaratory effect but is mandatory.
In principle, the company's assets are liable. If this is not sufficient, all partners are liable with their private assets. Thus, an individual shareholder can be made liable for the total debt of the company, if the other shareholder does not have any financial means.
Accounting and VAT
The obligation to keep double-entry books, i.e. balance sheet and income statement, starts with annual sales of CHF 500'000. Up to that moment it is sufficient to keep books about income, expenses and the asset situation. As the annual sales threshold for VAT liability is CHF 100'000, most companies start commercial accounting when they reach this sales figure.
Social Security and Taxes
The registration with the compensation office of the respective canton is an important step for the partners of a general partnership. It decides whether self-employment is recognized. Without this confirmation of self-employment, the social security contributions must be settled by the respective client.
Those earning their main income from self-employment have the option of obtaining their retirement capital from the second pillar (only if they take out capital within a year of taking up self-employment). The second pillar withdrawal triggers a capital tax.
Each partner must declare a share in profit and capital in his/her private tax return and report to the social insurance (AHV). As a self-employed person you are obliged to register with the social insurances. In contrast to an employee, no contributions can be paid to the unemployment insurance scheme (ALV), as there is no entitlement to unemployment benefit. There is no obligation for accident insurance as well; every self-employed person is responsible for those insurances.
If no contributions are made to the pension fund (2nd pillar), 20 per cent of the net earned income can be paid to the third pillar, taking into account a cap. We are happy to inform you about the maximum amount of the purchase in the third pillar, which can be deducted in the private tax return.
The rights and duties of a KlG are defined in the Swiss Code of Obligations (OR) Art. 552 – 593.