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Recently, the Federal Commercial Registry has issued important clarifications on certain aspects of the concept of a capital increase from freely disposable equity under Swiss law. We have taken the opportunity to summarize all legal aspects and corporate steps, including important tax consequences, in a short briefing.
- A capital increase from freely disposable equity under Article 652d of the Swiss Code of Obligations (CO) enables a Swiss stock corporation (Aktiengesellschaft) to convert existing freely disposable equity into share capital.
- In principle, this requires up-to-date audited annual financial statements or interim financial statements, together with a positive assurance from the auditors, to serve as proof of coverage.
- In its Practice Notice (Praxismitteilung) 2/26 of 9 June 2026, the Federal Commercial Registry Office (Eidgenössisches Handelsregisteramt, EHRA) clarified the requirements for proof of coverage.
- These clarifications are of particular and practical relevance to companies subject to a limited audit or that have opted out of an audit.
- From a tax perspective, the choice of the equity capital positions used for the conversion is decisive: converting retained earnings reserves has withholding tax and income tax consequences (as bonus shares), whereas converting capital contribution reserves remains tax neutral.
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.
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