Corporate

Conversion from GmbH/Sàrl to AG/SA

2min

⚡TL;DR

  • A conversion usually consists of a capital increase from CHF 20'000 to at least CHF 50'000, immediately followed by a decision to convert the GmbH/Sàrl into an AG/SA.
  • From a balance sheet point of view, the difference between the balance sheet assets and the balance sheet liabilities must be higher than the total share capital.
  • The conversion must take place within 6 months of the last (interim) financial statement.
  • Book a free call with us.

A conversion is the fact for a company incorporated as a GmbH/Sàrl to convert into an AG/SA, effectively raising its share capital and changing its legal form.

Check out our Incorporation page for the differences between a GmbH and an AG.

The minimum share capital of an AG/SA is CHF 100’000 (min. CHF 50’000 paid in). Since most GmbH/Sàrl have a share capital of less than CHF 100’000, the share capital must first be increased to at least CHF 100’000 (it can be partially paid in).

The following two steps are required for a capital increase:

  • Cash payment (by existing or new shareholders, into a blocked bank account) or conversion of freely available equity (frei verwendbares Eigenkapital, e.g., retained earnings) into share capital. This is a Capital increase;
  • Notarized resolutions of the shareholders and the board of directors approving and implementing the capital increase. If the conversion is made by admitting new shareholders, an investment agreement is usually also required.

Immediately after the Capital increase (at the same notary appointment), the shareholders hold an additional shareholders' meeting before the notary where they (i) resolve on the conversion of the company into an AG/SA, (ii) approve the new articles of association and (iii) elect the board of directors.

Many legal documents are required for the conversion (e.g. conversion plan and report, resolution of the board of directors, new articles of association). In addition, a conversion balance sheet must be prepared. This could be the final or interim balance sheet of the company, but it must be less than 6 months old.

Balance sheet requirements

To be able to convert, the GmbH/Sàrl must not only have a share capital of at least CHF 50'000, but the Eigenkapital/Fonds propres of the GmbH/Sàrl (i.e. the difference between the balance sheet assets and the balance sheet liabilities) must be higher than the total share capital (i.e., usually CHF 100'000). This mayrequire time and money to clean up the balance sheet to meet this accounting requirement.

For example, if a GmbH/Sàrl has CHF 120'000 of assets and CHF 30'000 in liabilities after the capital increase, this it has Eigenkapital/Fonds propres of CHF 90'000, which is insufficient for the conversion, even though the share capital has been increased from CHF 20'000 to CHF 50'000.

After notarization, the documents relating to the capital increase and the conversion, together with the audit report and the balance sheet, must be filed with the cantonal commercial register. The conversion becomes legally effective as soon as the change of legal form is entered in the commercial register.

Best practices

Timing: The conversion will be decided at the beginning of the calendar year, thus streamlining the process by allowing the use of the previous closing balance sheet.

Equity: The balance sheet shows that the company has equity (Eigenkapital/Fonds propres) for more than CHF 100'000 as this is the requirement for the conversion to be possible.

Book a free call to discuss our flat-fee conversion package and understand whether your company meets the balance sheet requirements.

Read more on the LEXR Blog

https://www.lexr.com/en-ch/blog/gmbh-ag-conversion-switzerland/







Updated 06 Nov 2024
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