Lack of independent legal personality
Since partnerships do not have any independent legal personality, business assets are owned personally by the partners (interrelationship, joint ownership).
Due to this personal bond with the partners, partnerships cannot be sold as such.
There are therefore only two possible transaction options:
- asset deals
- change of partner.
Since assets are owned personally within partnerships, assets and liabilities must be sold by the partners to the investor or investors (asset deal). The investors thus do not take over the legal entity, but rather its assets and liabilities. Such cases involve a “take-over of the business” or a “take-over of operations”.
Change of partner
Since assets are owned personally within partnerships, it is also conceivable that the “transfer of business” may be implemented by a change of partner.
Partnership types affected
- simple partnership
- general partnership [Kollektivgesellschaft]
- limited partnership [Kommanditgesellschaft].
Since assets are owned personally, the entry of a new partner requires the unanimous consent of all partners (see Article OR 542 of the Swiss Code of Obligations [simple partnership; form of association for intellectual professions without commercial organisation]; Article 576 ff. of the Swiss Code of Obligations [general partnership], Article 576 ff. in conjunction with Article 619 of the Swiss Code of Obligations [limited partnership]).
» CHANGE OF PARTNER
Irrespective of whether an asset deal involving the take-over of all assets and liabilities or a change of partner occurs, due to the requirement of accuracy and clarity as to the nature of the business, the firm or partnership must be brought into line with the new circumstances (new purpose and/or new partner) (Article 948 and/or 953 of the Swiss Code of Obligations).