Capital increase at an LLC: Here's how it works step by step

Capital Increase in an LLC: A Guide

The capital increase of an LLC refers to the targeted raising of the share capital through contributions from existing or new shareholders. This strategic measure enables companies to strengthen their financial base and open up new business opportunities. In this guide, you will learn everything you need to know about the legally secure execution of an LLC capital increase as well as its strategic importance for your company.

Central Aspects of the LLC Capital Increase

• Minimum amount: The legal basis of the share capital exceeding 20'000 CHF must not be undercut

• Flexibility: Cash contributions or contributions in kind possible

• Legal certainty: Notarial certification required

The importance of capital increases is steadily growing for Swiss LLCs. In a dynamic economic environment, additional equity serves as:

• A basis for investments in new technologies

• Strengthening of creditworthiness

• Improvement of the balance sheet structure

• A signal of stability to business partners

For growth-oriented LLCs, a capital increase offers a strategic option for sustainable corporate development. Professional execution requires precise planning and legally secure implementation in accordance with current Swiss legislation.

The correct structuring of the capital increase secures long-term corporate success and creates the conditions for further growth in a changing economic environment.

The Ordinary Capital Increase in Detail

The ordinary capital increase represents the only form of capital raising in an LLC. The Swiss Code of Obligations (CO) sets clear and binding regulations for the ordinary capital increase in an LLC. Regarding the share contributions, there is no legally defined upper limit, which allows shareholders a great deal of leeway in determining the increase. The only requirement is that a full payment (liberation) of the newly paid-in capital must take place (no partial payment possible). To pass a resolution on a capital increase, a qualified majority of the shareholders as well as the absolute majority of the entire share capital is required, which ensures broad agreement within the company. These legal frameworks create transparency and security for all parties involved in the process of the capital increase.

Requirements for the Ordinary Capital Increase

A successful capital increase is based on the following elements:

• Shareholder resolution with a qualified majority

• Public notarisation of the resolution

• Liberation (e.g. by cash contribution of the amount by which the share capital is to be increased)

• Commercial register entry of the capital increase

Execution of the Capital Increase

The process takes place in defined steps:

Passing of Resolution

• Convening of all shareholders

• Resolution on the capital increase with a qualified majority

• Determination resolution of the management

• Recording of all decisions

• Determination of the new capital

• Amendment of the articles of association

Commercial Register Entry

• Submission of the necessary documents

• Review by the commercial registry office

• Legally effective entry

The commercial register plays a central role as a public supervisory body. It checks the submitted documents for completeness and legality. The capital increase only becomes legally effective upon entry in the commercial register and can be carried out quickly and easily with expert help to advance company goals.

Economic Reasons for a Capital Increase and Their Effects on Shareholders and Equity Financing

The decision to increase the capital of an LLC is based on various economic motives:

Strategic Growth Financing

• Expansion into new markets

• Development of innovative products

• Modernisation of production facilities

• Digitisation of business processes

Strengthening the Equity Base

• Improvement of creditworthiness

• Optimisation of the balance sheet structure

• Increase of liquidity reserves

• Risk minimisation in times of crisis

Example 1: Expansion Abroad

Müller IT Solutions LLC plans to enter the market in Germany. In order to rent office space and hire staff, it increases its share capital by CHF 50'000 to finance the expansion.

Example 2: Admission of a New Shareholder

Traumdesignwerkstatt LLC wants to take on an experienced partner. This partner contributes CHF 30'000 and receives new shares in return – the capital increase serves the purpose of participation and the strengthening of equity.

Effects on the Shareholder Structure

The capital increase can lead to significant changes in the shareholder structure. The admission of new strategic partners results not only in altered ownership holdings, but also in a redistribution of voting rights within the LLC. This can significantly influence the decision-making processes and the strategic direction of the company. The restructuring of profit distribution is also an important aspect that must be carefully regulated to appropriately consider the interests of all shareholders and avoid potential conflicts.

The capital increase sustainably influences the financing structure of the LLC. A solid equity base enables better loan terms from banks and strengthens the bargaining position towards business partners. The additional financial resources create room for strategic investments and support long-term corporate development.

Equity financing through a capital increase offers the advantage that no regular interest payments are incurred. The LLC thereby gains financial flexibility and can focus on the implementation of its growth strategy.

Conclusion

The capital increase of an LLC is an important step in corporate development. To ensure that everything runs legally correctly, careful planning and professional support are required. A structured approach that considers all legal requirements minimizes risks and ensures a successful implementation of the capital increase.

For a successful capital increase of your LLC, Jurata is at your side as a reliable partner – competent, efficient, and future-oriented.