Why a capital increase is a strategic lever — and not just a formal requirement

When a Swiss SME needs liquidity, wants to bring in an investor, or must strengthen its equity to obtain bank financing, increasing share capital is often the cleanest route. Unlike a shareholder loan, a capital contribution increases equity without creating a financial liability owed to the company. Unlike a simple transfer of shares between private parties, a capital increase releases new funds directly into the company's bank account.

In a GmbH (Sagl) and an AG (SA), procedural rules, competent bodies, and accounting entries differ substantially. Confusing a capital increase with a contribution to the shareholder current account, or forgetting the notarial formalities, can invalidate the transaction or create unexpected tax liabilities. This guide outlines the two main paths — capital increase and entry of a new shareholder — with reference to the Code of Obligations (CO) and Swiss accounting practice.

Whether you manage your accounts with Accountex or with a trusted advisor, having a clear operational sequence allows you to correctly record capital, share premium, and payments, and to prepare documentation in advance for the Commercial Register and the shareholders' meeting.

Capital increase vs. new shareholder entry: what changes in GmbH and AG

Before starting any transaction, distinguish between the two main ways to bring in a new investor or strengthen equity:

Aspect	Capital increase	New shareholder entry (share transfer)
Balance sheet effect	Share capital increases; new funds flow into the company	Share capital remains unchanged; the price goes to the transferring shareholder
Legal basis — GmbH	Art. 777 CO — amendment of articles of association, notarial deed required	Art. 794 CO — transfer of shares with notarial deed; approval clause
Legal basis — AG	Art. 650 et seq. CO — shareholders' meeting resolution, notarial deed, Commercial Register entry	Art. 685 CO — transfer of registered shares; statutory restrictions possible
Decision-making body	Shareholders' meeting with qualified quorum (as a rule, 2/3)	Shareholders' meeting to approve transfer (GmbH); AG often without approval requirement
Payment	Contribution in cash or in kind to the company's assets	Payment to the outgoing shareholder, outside the company balance sheet
Share premium	Possible: the amount exceeding par value goes to the share premium reserve	Not relevant in company accounts; taxed privately by the transferor
Commercial Register	Mandatory registration of new capital and new shareholders	Update of shareholders (GmbH); registered shares yes, bearer shares no
Corporate tax impact	No taxable income; increase in net equity	No effect on corporate income
When it makes sense	Equity financing, new investor, balance sheet strengthening	Restructuring of shareholding without new funds in the company

Types of capital increase

The CO distinguishes several forms of capital increase. For SMEs, the most common are:

Capital increase paid in cash

Shareholders (or a new shareholder) subscribe to new shares by paying cash into the company's bank account. This is the simplest form and is preferred when the goal is to bring in immediate liquidity.

In a GmbH, capital must remain fully paid up after the increase. In an AG, at least 20% of the par value of the new shares must be paid up at subscription; the share premium may be paid according to the terms of issue.

Capital increase with contributions in kind

Real estate, machinery, patents, or receivables are contributed in exchange for shares. This requires a valuation by a licensed audit expert (Art. 628 and 777 CO) and a detailed description in the notarial deed.

Accounting is based on the value agreed in the valuation report. Note: contributions in kind by shareholders may have tax implications regarding implicit realization gains.

Capital increase from retained earnings (equity)

Retained earnings or reserves are capitalized without a cash payment. This does not bring liquidity, but strengthens share capital and can facilitate future distributions or financing transactions.

In an AG, a capital increase through conversion of bonds or debt instruments is also possible — a rarer form among SMEs.

Authorized capital (AG only)

The shareholders' meeting may authorize the board of directors to increase or reduce capital within statutory limits for a maximum period of five years (Art. 653s et seq. CO). Useful for flexible investment rounds without convening the general meeting each time.

The GmbH has no equivalent mechanism: every increase requires a new shareholders' meeting resolution and a notarial deed.

Step-by-step procedure

A correctly executed capital increase follows a precise sequence. Skipping a step leads to rejection of the Commercial Register entry or partial nullity of the transaction.

1

Planning and valuation

Define the amount of the increase, the issue price (par value ± share premium), the allocation between existing shareholders and the new entry, and verify that post-increase capital meets the legal minimums (CHF 20,000 for GmbH, CHF 100,000 for AG).
2

Shareholders' meeting resolution

Convene the meeting with a specific agenda. As a rule, amending the articles of association (share capital) requires a two-thirds majority of votes represented and an absolute majority of share capital. Document the minutes, attendance, and voting results.
3

Notarial deed and subscription

The notary prepares the capital increase deed with the amendment of the articles of association. Subscribers must pay up the shares: bank transfer marked «capital increase» or delivery of the contribution in kind. Keep the bank confirmation and the payment certificate.
4

Commercial Register entry

File the registration application with the notarial deed, meeting minutes, updated articles of association, payment certificate, and confirmation from the licensed audit expert. The application must be filed within six months of the resolution, otherwise it lapses (Art. 650 para. 3 CO). The increase takes effect vis-à-vis third parties only upon registration (Art. 946 CO). Until then, the company cannot legally treat the new capital as valid.
5

Accounting entries and notifications

Record the journal entries, update the register of shareholders, and notify any new shareholder to the register of insured persons (BVG/AHV) if they qualify as an employer or receive remuneration.

Accounting entries: capital, share premium, and payments

Entries depend on the form of the increase. Below are the most common patterns under Swiss accounting standards (Swiss GAAP FER / CO).

Example: capital increase paid in cash with share premium

A GmbH increases capital by CHF 20,000 (200 new shares at CHF 100 each) with a total share premium of CHF 30,000. The new shareholder pays CHF 50,000 into the bank account.

Account	Debit	Credit
1020 Bank	50,000	—
2800 Share capital	—	20,000
2350 Share premium reserve	—	30,000

In Accountex, record the transaction on the actual payment date (bank credit), attach the payment confirmation and notarial deed as supporting documents. The share premium reserve is not distributable until it is converted into capital or used in accordance with the articles of association.

Capital increase from retained earnings: capitalization of reserves

Retained earnings (CHF 15,000) are capitalized without any cash movement:

Account	Debit	Credit
2970 Retained earnings	15,000	—
2800 Share capital	—	15,000

Caution: do not confuse with the shareholder current account

A payment to the shareholder current account (account 2380 or similar) does not increase share capital. If the intention is a permanent contribution, the full legal procedure is required. If it is instead a temporary loan from the shareholder, document it with a contract and a market interest rate to avoid tax challenges regarding adjustments to operating capital maintenance.

Entry of a new shareholder: approval, price, and rights

When a new shareholder enters through a transfer of existing shares (GmbH) or purchase of shares (AG), the company does not receive money: the price is paid to the transferring shareholder. However, the transaction has management relevance and, in a GmbH, often requires shareholders' meeting approval.

In GmbHs, the statutory approval clause applies (Art. 794 CO): transferring shares to a third party requires approval by the shareholders' meeting, unless the articles of association provide otherwise. Also check any statutory pre-emption rights, which give existing shareholders priority to purchase.

In AGs, registered shares may include statutory restrictions on transferability; in unlisted companies, shares are as a rule registered (bearer shares are permitted only in special cases provided by law). For an external investor bringing in fresh capital, a capital increase remains almost always preferable to a mere transfer.

GmbH — entry checklist

Check approval clause and pre-emption rights
Shareholders' meeting resolution approving the new shareholder
Notarial deed for share transfer
Update register of shareholders and Commercial Register
BVG obligations if the new shareholder receives a salary or acts as a director

AG — entry checklist

Verify share type (as a rule, registered shares in unlisted SMEs)
Possible board or shareholders' meeting approval for restricted registered shares
Transfer by assignment or capital increase with subscription
Update register of shareholders (share register)
Notification to the cantonal tax office for material transactions

Tax implications

A capital increase does not generate taxable income for the company: it is a balance sheet transaction. The tax consequences mainly concern the shareholders.

Corporate level

Capital and share premium increase net equity without affecting operating profit. There is no taxation of internal gains. In the case of contributions in kind, carefully assess the tax value of the assets contributed: an excessive value may trigger tax assessments.

Shareholder level — individuals

A cash contribution is not a tax-relevant event for the contributing shareholder. In the case of a share transfer, the transferor may realize taxable capital gains if the price exceeds the acquisition cost. Gains on qualifying participations may benefit from favorable cantonal regimes if the holding criteria are met.

Property gains tax (cantonal)

The transfer of shares in predominantly real estate companies may be subject to cantonal property gains tax, as it is economically equivalent to a transfer of real estate. Rules vary by canton; for complex transactions involving real estate or contributions in kind, consult the cantonal tax advisor before signing the notarial deed.

Common mistakes to avoid

Payment before the notarial deed

Crediting funds as «capital increase» before the shareholders' meeting and notary have formalized the transaction creates an accounting grey area. Treat them provisionally as shareholder current account entries until Commercial Register registration.

Forgetting pre-emptive subscription rights (AG)

In an AG, unless limited by articles of association approved by the shareholders' meeting, existing shareholders have the right to subscribe to new shares in proportion to their holding (Art. 652b CO). Excluding them without the correct procedure exposes the company to challenge.

Undercapitalization

After a partial increase or a loss, verify that GmbH capital remains fully paid up and that the AG meets the minimum of CHF 100,000 nominal with at least CHF 50,000 paid up.

Failure to update the register of shareholders

The register of shareholders (GmbH) or share register (AG) must reflect the new holdings with date, number of shares, and amount paid up. It is a mandatory document by law and essential in due diligence or a future sale.

Managing the transaction with Accountex

A well-documented capital increase simplifies financial statements, tax returns, and banking relationships. In Accountex, you can structure the transaction in an orderly way:

Record capital and share premium entries with payment date and attachments (bank confirmation, notarial deed)
Update the chart of accounts if you introduce new share premium reserves or change the equity structure
Monitor net equity in the balance sheet report to verify the effect of the increase on solvency ratios
Use the document register to archive meeting minutes, updated articles of association, and Commercial Register certificate
Coordinate with your trustee on correct tax treatment, especially where contributions in kind or new shareholders with remuneration are involved

For transactions involving multiple shareholders, material amounts, or complex contributions in kind, always involve a notary and a trusted advisor: legal and accounting precision protects the corporate structure and investor confidence.