"Over two decades advising international clients, I've noticed a recurring pattern: many assume Switzerland offers only GmbH or AG structures. The Kommanditgesellschaft provides a strategic alternative for specific scenarios—particularly when combining active management with passive capital investment. Understanding its liability framework before committing is essential." — Markus Pritzker ## What is a limited partnership (Kommanditgesellschaft) in Switzerland? A Swiss Kommanditgesellschaft (KmG) is a partnership structure governed by Articles 594–619 of the Swiss Code of Obligations, designed for businesses requiring clear separation between management and capital contribution. The defining characteristic: at least one general partner (Komplementär) bears unlimited personal liability for all partnership obligations, while at least one limited partner (Kommanditär) has liability capped at their registered capital contribution (Kommanditsumme). "General partners have unlimited liability; limited partners are liable only up to the Kommanditsumme." — Fiduciaire Fidulex, 2024. Unlike corporations (AG) or limited liability companies (GmbH), the KmG is not a separate legal entity but operates as a contractual partnership with capacity to act and hold assets. This suits scenarios where operational expertise and financial backing must remain distinct—for instance, a family business where one member manages daily operations while others provide capital without management involvement. Registration in the Commercial Register is mandatory, with full disclosure of all partners, their roles, and the limited partners' liability caps. "Registration in the Commercial Register is mandatory, including disclosure of partners and limited partners' liability amounts." — Lawyers Switzerland, 2024. ### The two types of partners: a key distinction The fundamental distinction in a KmG lies in the roles and responsibilities of its two partner categories. General partners (Komplementäre) must be natural persons who manage the business and bear unlimited, joint and several liability—meaning creditors can pursue any general partner's personal assets for the full amount of partnership debts. Limited partners (Kommanditäre) contribute capital but are excluded from management and protected from personal liability beyond their registered contribution. > "Limited partners are excluded from management; general partners manage and represent the partnership." — Fiduciaire Fidulex, 2024.

General Partner (Komplementär)

Liability Unlimited, joint and several liability with entire personal assets.
Management & Representation Full authority to manage and represent the partnership.
Name in Company Title Surname typically appears in the partnership name.

Limited Partner (Kommanditär)

Liability Limited to the registered capital contribution (Kommanditsumme).
Management & Representation Excluded from management; limited voting rights on exceptional decisions.
Name in Company Title Name not required in company title.

Table 1: Comparison of General vs. Limited Partners in a Swiss KmG
Parameter	General Partner (Komplementär)	Limited Partner (Kommanditär)
Liability	Unlimited, joint and several liability with entire personal assets	Limited to registered capital contribution (Kommanditsumme)
Management & Representation	Full authority to manage and represent the partnership	Excluded from management; limited voting rights on exceptional decisions
Name in Company Title	Surname typically appears in the partnership name (verify cantonal practice)	Name not required in company title
Profit/Loss Distribution (Default)	Proportional to capital contribution unless otherwise agreed	Proportional to capital contribution unless otherwise agreed

{{cta:cta-1}} ### Legal framework: the Swiss Code of Obligations The KmG operates under Articles 594–619 of the Swiss Code of Obligations (CO), which establish minimum structural requirements while permitting significant contractual flexibility. The law mandates at least one general partner (natural person) and one limited partner (natural or legal person), with the limited partner's liability fixed at the amount registered in the Commercial Register. > "Articles 594–619 CO govern Swiss limited partnerships, including liability and registration requirements." — Fiduciaire Fidulex, 2024. The partnership agreement can modify many default provisions—including profit distribution, management procedures, and partner rights—except for mandatory rules concerning minimum structure and liability allocation. Partners may agree to unequal profit sharing regardless of capital contributions, or grant limited partners specific voting rights on strategic decisions, but they cannot eliminate the general partner's unlimited liability or allow limited partners to manage without losing their liability protection. ### Who is the KmG structure ideal for? The Kommanditgesellschaft serves specific business scenarios where liability separation and management clarity are paramount: - Family businesses where one family member actively manages operations while others contribute capital without day-to-day involvement, preserving family wealth while limiting exposure for passive members. - Startups attracting silent investors who provide funding but prefer not to participate in management or assume unlimited liability, allowing founders to retain operational control. - Professional service firms where senior partners manage client relationships and junior partners or external investors contribute capital with capped risk. - Collective investment structures, particularly following the 2024 regulatory reforms enabling Limited Qualified Investor Funds (L-QIF) in KmG form. "As of early 2025, FINMA has authorised roughly 25 limited partnerships for collective investment." — Solutions & Funds, 2025. ## KmG vs. other Swiss business structures: which is right for you? Selecting the appropriate legal form requires understanding how the KmG compares to Switzerland's most common alternatives: the GmbH (limited liability company) and the Kollektivgesellschaft (general partnership). The KmG occupies a middle ground: it offers limited liability for some partners (unlike the Kollektivgesellschaft, where all partners bear unlimited liability) but lacks the full liability shield and separate legal personality of a GmbH. "There is no statutory minimum capital for a Swiss limited partnership; contributions are defined in the partnership agreement." — Lawyers Switzerland, 2024.

Table 2: KmG vs. GmbH vs. Kollektivgesellschaft - A Comparative Overview
Feature	Kommanditgesellschaft (KmG)	GmbH (LLC)	Kollektivgesellschaft
Legal Entity	No separate legal personality; partnership with capacity to act	Separate legal entity with independent rights and obligations	No separate legal personality; partnership
Liability	General partners: unlimited; Limited partners: capped at contribution	All shareholders: limited to share capital (min. CHF 20,000)	All partners: unlimited, joint and several
Minimum Capital	None required by law; contributions defined in agreement	CHF 20,000 (fully paid-in at formation)	None required by law
Management	General partners manage; limited partners excluded unless agreed	Appointed managers (may be shareholders or external)	All partners manage jointly unless otherwise agreed
Taxation	Transparent: profits taxed at partner level (personal income tax)	Company taxed separately; shareholders taxed on distributions	Transparent: profits taxed at partner level
Formation Complexity	Moderate: partnership agreement, Commercial Register entry	Higher: notarized articles, capital deposit, registry, audits (if thresholds met)	Lower: agreement (can be oral), registry entry

"A Swiss GmbH requires a minimum share capital of CHF 20,000, fully paid in at incorporation." — Hoop.swiss, 2024.

Kollektivgesellschaft

Liability

All partners: unlimited, joint and several.

Minimum Capital

None required by law.

Taxation

Transparent: profits taxed at partner level.

KmG

Liability

General partners: unlimited. Limited partners: capped.

Minimum Capital

None required by law.

Taxation

Transparent: profits taxed at partner level.

GmbH

Liability

All shareholders: limited to share capital.

Minimum Capital

CHF 20,000.

Taxation

Company taxed, then shareholders on distributions.

From my experience advising mid-sized enterprises, the GmbH remains the default choice for most international clients seeking liability protection and credibility with banks and investors. The KmG proves advantageous when capital contributors explicitly wish to avoid management responsibilities and accept the trade-off of one or more partners bearing unlimited liability. {{cta:cta-1}} ## How to establish a Swiss limited partnership (KmG): a step-by-step guide Registering a Kommanditgesellschaft in Switzerland follows a structured process governed by the Swiss Code of Obligations and cantonal Commercial Register procedures. While simpler than incorporating a GmbH or AG (corporation)—no minimum capital deposit required—the process demands precision in documentation and partner disclosure. Timeline: Expect 4–8 weeks from initial agreement to full registration, depending on cantonal registry workload and document preparation speed. 1. Step 1: Draft the Partnership Agreement (Gesellschaftsvertrag) Although Swiss law permits oral agreements for partnerships, a written contract is essential for clarity and enforceability. The agreement must specify: (a) partner names and roles (general vs. limited), (b) capital contributions (cash or in-kind), (c) profit and loss distribution, (d) management authority and decision-making procedures, (e) conditions for partner withdrawal or admission of new partners. "A written partnership agreement is strongly recommended to clarify management, profit allocation, and exits." — Fiduciaire Fidulex, 2024. 2. Step 2: Choose and Verify the Company Name (Firma) The partnership name must include the legal form ("Kommanditgesellschaft" or "KmG") and be truthful and unique. The inclusion of a GP's surname may depend on cantonal practice. Use the Zefix database to verify availability before proceeding. 3. Step 3: Notarize Signatures & Register in the Commercial Register (Handelsregister) Submit the partnership agreement and a registration application to the cantonal Commercial Register. Signatures on the application may require notarization depending on cantonal practice. The registry will publicly disclose all partners, their roles, and the limited partners' liability caps (Kommanditsumme). 4. Step 4: Make Capital Contributions Partners must fulfill their agreed contributions—either cash deposited into the partnership's bank account or in-kind assets (equipment, intellectual property, real estate) transferred and valued. The limited partner's contribution amount must match the Kommanditsumme registered in the Commercial Register. 5. Step 5: Post-Registration Formalities After registry confirmation, complete the following: (a) open a corporate bank account in the partnership's name, (b) register with cantonal social insurance authorities (AHV) for employee contributions, (c) register for VAT with the Federal Tax Administration if annual turnover exceeds CHF 100,000. Typical costs: Commercial Register: ~CHF 600; notary's fees: CHF 2,000–4,000; start-up advisory: CHF 500–1,000. Actual fees vary by canton and scope.

Roadmap for Establishing a KmG

Draft Agreement

Verify Name

Make Contributions

Post-Registration

"Pro Tip: A detailed written partnership agreement is the single most important document to prevent future disputes. Invest time in it upfront—ambiguities around profit sharing or management authority will surface when the business scales or partners disagree." — Markus Pritzker ## The limited liability partnership (LLP) concept in the Swiss context A frequent question from international clients, particularly those familiar with UK or US legal systems: "Does Switzerland offer a Limited Liability Partnership (LLP)?" The answer is unequivocal—no. Swiss law does not recognize the LLP as a distinct legal form. The LLP, common in Anglo-Saxon jurisdictions, provides limited liability for all partners while retaining partnership taxation and governance flexibility. Switzerland's civil law tradition maintains a clear division: partnerships (including KmG and Kollektivgesellschaft) do not confer separate legal personality or full liability protection, while corporations (AG) and limited liability companies (GmbH) do. For professional service firms—lawyers, auditors, consultants—seeking limited liability, the GmbH is the standard alternative. It offers shareholders protection from personal liability (capped at their share capital contribution of at least CHF 20,000), separate legal entity status, and credibility with clients and regulators. Key Takeaway: Switzerland does not have a direct legal equivalent to the LLP. Professionals seeking limited liability typically opt for a GmbH (LLC) or AG (Corporation). ## Financial, tax, and legal obligations ### Liability rules explained in detail The liability framework is the KmG's defining feature and requires precise understanding to avoid unintended exposure. General Partners (Komplementäre): Bear unlimited, joint and several liability for all partnership obligations. Creditors can pursue any general partner's personal assets—bank accounts, real estate, investments—for the full amount of partnership debts, regardless of the partner's capital contribution. If one general partner is insolvent, creditors can claim the entire debt from another general partner. Limited Partners (Kommanditäre): Liability is strictly capped at the registered capital contribution (Kommanditsumme) entered in the Commercial Register. Creditors cannot pursue limited partners' personal assets beyond this amount, provided the limited partner does not engage in management activities. "Limited partners who participate in management risk losing their limited liability status." — Fiduciaire Fidulex, 2024. Post-dissolution liability: After dissolution, both general and limited partners remain liable for five years. ### How are partnerships taxed in Switzerland? The KmG operates under the principle of tax transparency: the partnership itself is not subject to corporate income tax or capital tax. Instead, profits and assets are allocated to individual partners and taxed at their personal level. "Limited partnerships are tax-transparent in Switzerland; profits are taxed at partner level, not at entity level." — Amizelle, 2024. For General and Limited Partners: Each partner declares their share of partnership profits in their personal income tax return, taxed at progressive cantonal and federal rates (combined effective rates typically range from 12% to 40%, depending on canton and income level). The partner's share of partnership assets is subject to wealth tax at the cantonal level. VAT Registration: The KmG must register for VAT if annual turnover exceeds CHF 100,000. For e-commerce businesses or service providers, this threshold is often met from day one. The partnership collects VAT on sales and remits it quarterly or semi-annually to the Federal Tax Administration. Cross-Border Considerations: Limited partners residing abroad are taxed on their share of KmG profits under Swiss domestic law, subject to relief under applicable double taxation treaties. ### Accounting and bookkeeping requirements Swiss law mandates that all partnerships maintain proper accounting records. For KmG partnerships with annual turnover exceeding CHF 500,000, double-entry bookkeeping and full financial statements (balance sheet, income statement, notes) are required. Below this threshold, simplified single-entry bookkeeping suffices. Audits are generally not mandatory for KmG structures unless the partnership exceeds size thresholds or operates in regulated sectors (e.g., collective investment funds, where FINMA oversight applies). ## Governance and management in a KmG ### Management and representation rights By default, only general partners (Komplementäre) possess the authority to manage the partnership and represent it in dealings with third parties—signing contracts, opening bank accounts, hiring employees. Limited partners (Kommanditäre) are explicitly excluded from management unless the partnership agreement grants them specific rights. "General partners manage and represent the partnership; limited partners may have limited voting and information rights." — Fiduciaire Fidulex, 2024. The partnership agreement can modify these defaults to a limited extent. Limited partners may be granted voting rights on extraordinary decisions (e.g., admission of new partners, sale of major assets, dissolution) or advisory roles without triggering unlimited liability. However, granting limited partners full management authority risks reclassifying them as general partners. ### Partner requirements (nationality and domicile) Swiss law imposes specific requirements for general partners but not for limited partners. General Partners: At least one general partner must be a natural person. Foreigners can be partners; local representation or residency may be required for management presence. Limited Partners: No residency or nationality restrictions apply. Limited partners can be foreign individuals, non-resident entities, or Swiss legal persons (e.g., a GmbH or AG acting as a limited partner). For collective investment KmGs regulated by FINMA, the general partner is typically a Swiss-domiciled limited liability company (GmbH) with minimum capital of CHF 100,000. "For limited partnerships for collective investment, the general partner is typically a Swiss company with at least CHF 100,000 capital." — [FINMA, 2024](https://www.finma.ch/en/authorisation/asset-management/limited-partnerships-for-collective-investment/). ## Dissolution, termination, and transfer of shares A KmG may be dissolved under several circumstances, as defined by the Swiss Code of Obligations and the partnership agreement: Grounds for Dissolution: - Mutual agreement of all partners. - Expiration of a fixed term specified in the partnership agreement. - Insolvency or bankruptcy of the partnership. - Death, bankruptcy, or withdrawal of the sole general partner (unless the agreement provides for continuation or succession). - Court order, typically in cases of irreconcilable partner disputes or breach of fiduciary duties. "A KmG dissolves upon agreed causes or partner events unless the partnership agreement provides continuation; transfers may require partner consent." — Fiduciaire Fidulex, 2024. Liquidation Process: Upon dissolution, the partnership enters liquidation. General partners (or appointed liquidators) settle outstanding debts, collect receivables, and distribute remaining assets to partners according to their capital contributions and profit-sharing ratios. The partnership is then deregistered from the Commercial Register. Transfer of Partnership Shares: Limited partners may transfer their shares to third parties, subject to consent requirements specified in the partnership agreement. General partnership shares are more restricted: transferring a general partner's interest typically requires unanimous consent of all partners. {{cta:cta-1}} ## An overview of other Swiss business structures Switzerland offers several legal forms beyond the KmG, each suited to different business needs. Sole Proprietorship (Einzelunternehmen): The simplest form, owned and operated by a single individual. No minimum capital required, but the owner bears unlimited personal liability for all business debts. Registration in the Commercial Register is mandatory if annual turnover exceeds CHF 100,000. Corporation (AG/SA): A separate legal entity with shareholders whose liability is limited to their share capital contribution (minimum CHF 100,000, with at least CHF 50,000 paid-in at formation). Governed by a Board of Directors, the AG is suited for larger enterprises, companies seeking public investment, or businesses requiring strong credibility with banks and investors. Limited Liability Company (GmbH/SARL): The most popular structure for small and medium-sized businesses. Shareholders' liability is limited to their capital contribution (minimum CHF 20,000, fully paid-in). The GmbH offers flexibility in governance, lower formation costs than an AG, and suitability for family businesses or startups. For detailed guidance on each structure, consult the following resources: - [Corporation (AG) Formation Guide](https://swissfirma.com/opening-swiss-corporation-aktiengesellschaft/) - [Company Formation in Switzerland](https://swissfirma.com/company-formation-switzerland/)

Limited partnership in Switzerland: the complete guide to kommanditgesellschaft (KmG)