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Changes in the law of business names for general and limited partnerships

 As of July 1, 2016, major changes in the law for business names for partnerships will take effect. The relevant provisions of the code of obligations for general partnerships and limited partnerships have not been amended for hundred years. Today, the company name of a partnership must contain the name of at least one partner. If this person leaves the company, the company has to change its name, which can lead to significant economic losses.

Under the new legislation, partnerships may continue to use their company name even if a change of partner occurs. Should the parties to the partnership wish to change the company's legal form (e.g. to a company limited by shares, "AG", or a limited liability company, "GmbH"), only the respective acronym has to change: "ABC & Partner" would then become "ABC AG".

What is already the case for the AG and the GmbH will apply now to all other companies too: the company's legal form should be directly recognizable in its name. To spell the legal form in full may not be useful, which is why new abbreviations will be introduced ("KLG" = general partnership (Kollektivgesellschaft), "KmG" = limited partnership (Kommanditgesellschaft), "Gen" = cooperative (Genossenschaft)). This is especially important for potential business partners: Now they will immediately be able to note whether potential future claims may solely be enforced against the company itself (AG, GmbH, cooperatives) or against the individual partners also (as for collective or limited partnerships).

Further, there are changes regarding the name of a company. There are no longer different rules applying to different company forms with regard to their names. All company forms are subject to the same rules. This means for example that fantasy names will also be permitted for partnerships. The inclusion of the family name of at least one partner is no longer obligatory.

Finally, the geographic scope of the company name's protection will be extended to the entire territory of Switzerland for all types of companies. So far, the scope for partnerships was limited to only the municipality of the seat of their headquarters, and the immediate economic area, outside of which it was possible for competitors to have a similar company name. It is therefore recommendable for general and limited partnerships, before registering a new company, to verify whether or not an identical or very similar company name is already registered with the Commercial Registry.

The introduction of the new regulations does not oblige commercially registered companies to immediately adjust their business names to the new law. Only in case a member of a general or limited partnership leaves, the partnership will be required adapt to the new rules and to add the addendum "KLG" or "KmG" to its business name. The situation differs when an existing partnership seeks to expand its scope to the entire territory of Switzerland: in that case, they should comply with the company name indication requirements immediately upon the entry into force of the new provisions. With that, they can reduce the risk that another registered partnership will claim exclusivity for the same company name across Switzerland.