When World War II broke out, Switzerland, while officially neutral in the conflict, was faced with the threat of potential invasion by Germany. The Kriegs Technisch Amt, the Swiss government body for war preparations, sent out an ordnance survey in May 1940; upon reviewing the results, they found that the Swiss Army had less than 500 submachine guns at their disposal. The KTA therefore commissioned the two largest small arms manufacturers in the country, SIG and W+F Bern, to produce new submachine gun prototypes for the Army.
SIG developed the MP41 in response to this commission. It was adapted from the MKMO submachine gun and retained the swiveling magazine housing that folded horizontally into a groove in the fore-end. A more conventional version without this feature was also prototyped.
In 1941, the KTA ordered a trial batch of 50 MP41s from SIG and 100 of the rival design from W+F Bern. The KTA exhibited obvious favoritism towards the W+F gun and adopted it without undergoing comparative tests to SIG's MP41. Without a domestic military contract, SIG attempted to market the MP41 abroad, but were blocked from doing so by Switzerland's neutrality laws. Only 200 MP41s were produced before the design was abandoned.
The MP41 was a delayed blowback-operated submachine gun; the internal operation of the gun was largely the same as SIG's earlier MKMO, utilizing a loose firing pin and one-piece bolt. The main changes were external, as the rifle-like wooden stock of the MKMO was replaced by furniture resembling the Thompson submachine gun. It had a finned barrel and large hollowed-out handguard which the magazine could be folded into when not in use. Upon doing this, the magazine would be locked into place, and pressing a catch located just under the fore sight would release it, allowing it to drop back into its regular position for firing. The safety was on the right side of the gun, just above the trigger.