What is Legal personality?

Legal personality refers to the legal recognition of an entity—whether an individual, organization, or company—as a subject capable of holding rights and obligations under the law. In Switzerland, legal personality is essential for defining the rights, duties, and responsibilities of businesses and organizations, as governed by the Swiss Civil Code and the Swiss Code of Obligations (CO).

Legal Personality in the Swiss Context

1. Natural Persons
   • Every individual is granted legal personality at birth. This includes the ability to own property, enter contracts, and take legal action.
2. Legal Entities
   • Companies, associations, and foundations acquire legal personality upon registration in the Swiss Commercial Register. This status allows them to operate independently from their founders or members.
   • Common examples of legal entities in Switzerland include société anonyme (SA), limited liability company (GmbH), and non-profit associations.

Importance of Legal Personality

• Rights and Obligations: Legal personality enables entities to own assets, enter into contracts, sue, or be sued in their own name.
• Separation of Liability: For legal entities like corporations, legal personality ensures that the business is distinct from its owners, limiting personal liability to the amount of invested capital.
• Legal Recognition: It is a prerequisite for participating in commerce, protecting both the entity and its stakeholders under Swiss law.

Legal personality is fundamental to Switzerland’s legal and economic systems, providing the framework for businesses and individuals to engage in economic and legal activities with clarity and security.