Since January 1, 2025, new provisions have been in force in Swiss company law that specifically prevent bankruptcy abuses, prevent trading in over-indebted shell companies and provide a clearer structure for auditing law. With the introduction of Art. 684a CO and the revision of Art. 727a CO, the legislator is setting new standards in terms of transparency and creditor protection – and creating clear rules for opting-outs and shell company transactions.
This article answers the five key questions on the new regulations – in a compact, legally precise manner and with practical added value for entrepreneurs, board members and investors.
What are the main changes to the law to combat bankruptcy abuses?
The revision of company law entails fundamental changes. Firstly, shell companies will be prohibited under certain conditions – a reaction to numerous workarounds for de facto dead companies. Secondly, opting out is no longer permitted retroactively, which improves transparency and traceability in the commercial register.
In addition, it was decided to introduce a central personal database with a search function in order to better identify the beneficial owners of legal entities. Stricter activity bans apply to persons who have already been associated with fraudulent structures or bankruptcy offenses. Finally, the bankruptcy administration now has specific reporting obligations in the event of suspected abuse. The aim of all these measures is to strengthen creditor protection and prevent structural circumvention of the law.
What do the terms "shell company" and "shell trade" mean – and what is the difference to a shelf company?
According to established Federal Supreme Court case law, a shell company is a legal entity whose business activities have been completely discontinued and whose assets no longer exist – but which continues to exist legally and is still entered in the commercial register. Subsequent shell trading aims to avoid the expense of a formal liquidation and a complete re-establishment – usually in order to save time and costs.
In contrast, a shelf company is a deliberately founded, non-operational company with fully paid-up capital that has been prepared in a legally sound manner and has no economic history. While shell companies are now considered risky and potentially illegal, shelf companies – provided they are structured correctly – are still permitted.
What does the new Art. 684a CO provide for and what is the purpose of this provision?
The new Art. 684a CO regulates the conditions under which shell trading is not permitted. This is the case if a company cumulatively:
- no longer conducts any business activities,
- no longer has any realizable assets,
- is financially overindebted, i.e. has negative net assets, without necessarily being overindebted within the meaning of Art. 725b CO.
The purpose of this standard is not only the integrity of the commercial register, but in particular the protection of creditors, who should not be jeopardized by the resale of over-indebted shell companies. The legislator wants to send a clear signal against abusive use of companies and bring orderly liquidation back into focus.
What is the legal consequence of a shell company?
A shell transaction that is not permitted under Art. 684a CO is null and void under civil law – even at the level of the obligatory transaction. This means that ownership of company shares is neither transferred nor can it be cured later by registration. Crucially, acquisition in good faith is also excluded.
Similarly, bodies appointed after shell companies are legally ineffective and obligations entered into by the company after the unauthorized acquisition have no legal effect. For new creditors, this means that they have claims for damages against the alleged board members – in analogous application of Art. 39 para. 1 CO, as they have acted without a legally valid board position and thereby caused damage that gives rise to liability.
What is new about opting out in accordance with Art. 727a CO?
According to the revised Art. 727a CO, the waiver of the limited audit (opting out) is only permitted for future financial years. A retroactive waiver – for example after the submission of a critical audit – is excluded. This means that annual financial statements without a prior audit obligation can no longer be "exonerated" retrospectively.
The prerequisite for a valid opting-out remains that the company employs a maximum of ten full-time employees on an annual average and that all shareholders agree. What is new, however, is that the waiver must be registered in the commercial register before the end of the current financial year. An audit waiver at the time of formation remains permissible, but once an audit obligation has arisen, it cannot be removed retroactively.
The aim of the revision is to better protect creditors in the event of imminent over-indebtedness and to prevent cases of abuse in which problematic audit reports were subsequently neutralized by retrospective opting-outs. With the new legal situation, such circumvention constellations are now effectively excluded.
Conclusion: Check structure – avoid risks
With the new provisions, the legislator is strengthening legal certainty and creating clear boundaries for permissible and impermissible company uses. The abuse of shell companies is effectively prevented, audit law is regulated more transparently and creditor protection is consistently enforced. Now is the right time for companies, executive bodies and investors to review existing structures and entries in the commercial register – and make legally compliant adjustments where necessary.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
