What is Joint-stock partnership?

A joint-stock partnership is a business structure where two or more partners collaborate to run a business, with each partner holding shares of the company. This form of partnership combines elements of both a traditional partnership and a corporation, allowing the business to raise capital by issuing shares to partners and, in some cases, to the public. The partners’ liability is typically limited to the amount they have invested in the company, making it an attractive option for those seeking to share both the risks and rewards of business operations.

Key Features of a Joint-Stock Partnership

  • Shareholder Ownership: In a joint-stock partnership, ownership of the company is divided into shares, which are distributed among the partners. The shares represent a partner’s stake in the business, and the number of shares held determines the partner’s influence in decision-making and their share of profits.
  • Limited Liability: One of the main advantages of a joint-stock partnership is limited liability for its shareholders. Unlike traditional partnerships, where partners may be personally liable for the debts of the business, a joint-stock partnership limits liability to the amount of capital each shareholder has invested in the company.
  • Raising Capital: A joint-stock partnership can raise capital by issuing shares to new or existing partners. This ability to sell shares can be a significant advantage for businesses looking to expand or fund new projects, as it allows them to access a larger pool of capital compared to other forms of partnerships.
  • Separate Legal Entity: Similar to a corporation, a joint-stock partnership is often considered a separate legal entity from its owners, allowing it to enter into contracts, own assets, and be liable for debts in its own name. This helps to protect the personal assets of the partners.

Joint-Stock Partnership in Switzerland

In Switzerland, the concept of joint-stock partnerships is most commonly represented by Société Anonyme (SA), which is the Swiss equivalent of a joint-stock company or corporation. The SA is a popular business structure for both domestic and international companies, offering limited liability, the ability to issue shares, and flexibility in terms of governance and capital raising.

Swiss joint-stock partnerships are regulated under the Swiss Code of Obligations, which sets out rules for share issuance, shareholder rights, and corporate governance. These companies are required to have at least one shareholder, and the minimum share capital for an SA is CHF 100,000, with at least CHF 50,000 paid in at the time of incorporation.

In a Swiss joint-stock partnership, shareholders have limited liability and can transfer their shares, making it easier to raise capital or exit the business. The partnership’s governance structure typically includes a board of directors and an annual general meeting (AGM) for decision-making.

Joint-stock partnerships in Switzerland provide a flexible and secure way for businesses to attract investors, raise capital, and operate with limited liability, making them an appealing choice for entrepreneurs and investors.