In Switzerland the "virtual company" is a new form of cooperation between several companies in the construction business. This new concept was recently developed and supported by the federal commission for technology and innovation to allow small and medium sized enterprises to compete with major firms. It was triggered by the insufficiencies of the traditional cooperation's ways in the building trade:
Small and medium sized companies sometimes form a consortium, which is a contractual relationship between them, in order to jointly participate in a construction project. This solution is very flexible but lacks permanency in the market since the partnership is dissolved and liquidated once the project has been achieved. Further, the partners are jointly and severally liable to the principal (the project master).
Beside consortiums, small and medium sized enterprises usually work as sub-contractors for a general contractor who alone enters into a construction agreement with the principal. However, this solution lacks flexibility for the sub-contractors, since they do not have any influence on the project.
The virtual company tries to combine both elements, flexibility and permanency, in a new form of cooperation by joining several small and medium sized enterprises with the purpose of entering the market together to realize projects.
The mechanism of the virtual company operates as explained in a second article.
The content of this article is intended to provide general information on the subject matter and is not a legal advice. An individual matter requires legal advice according to the specific circumstances.
