No reform of LLC law

Since 1 January 2008, the nominal capital of a LLC, set at a minimum of CHF 20'000, must be fully paid up at the time of in corporation. The Federal Council notes that the number of new LLCs has risen sharply since 2008 and has even exceeded that of companies limited by shares since 2021. While neighbouring countries have more flexible requirements regarding the amount and payment of the nominal capital, these are offset by additional measures to protect creditors. After examining the possible changes, the Federal Council has concluded that no new measures are required to encourage the incorporation of LLCs. In its view, a partial release of the nominal capital does not constitute a real easing of the burden, but merely a financial relief at the time of the incorporation, since payment of the amount not released is only deferred.

The Federal Council is also opposed to reducing the capital to a symbolic one franc, since companies are likely to be perceived as unreliable. In this case, it is also legitimate to question whether the company is still a limited company. Although it is conceivable that a reduction in the minimum capital requirement to CHF 10'000 would lead to a surge in activity for LLCs, it is difficult to establish the scale of the boost it would give, as this is a widely used legal form that is already experiencing strong growth. A reduction in the nominal capital would lead to less creditor protection, which would have to be offset by additional regulations, e.g. a revision of the opting-out system and the publication of annual financial statements.

Should you have any questions in relation to a LLC, do not hesitate to contact us. For the changes under the revision of company law, please refer to our Legal Compass.