Corporate Law

The conversion of a limited liability company into a corporation offers new growth opportunities and expanded capital procurement possibilities, but poses a financial and administrative challenge, especially for smaller companies. The conversion process includes the preparation of a conversion plan and report, a review by an auditing expert and a resolution at a shareholders’ meeting before entry in the commercial register. A major stumbling block is the required minimum capital of CHF 100’000, which often necessitates a capital increase. This can be achieved through cash contributions, conversion of company loans into equity or by using freely available equity. Careful planning of the financing is crucial for the success of the conversion.

As of January 1st 2025, Articles 684a and 787a of the Swiss Code of Obligations declared avoidance transactions in connection with shell companies and organised company burials null and void. Shell companies that exist without any operational activity are often used to avoid liquidation costs and taxes. Organised company burials, in which companies manipulate their debts and put creditors at a disadvantage, are particularly problematic. The new regulations strengthen legal certainty, protect creditors and set clear limits against these unauthorised practices.