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 increase of share capital through contributions from existing or new shareholders. This strategic measure enables companies to strengthen their financial base and seize new business opportunities. In this guide, you will learn everything important about the legally compliant execution of an LLC capital increase and its strategic significance for your company.

Key Aspects of LLC Capital Increase

• Minimum Amount: The legal basis of the share capital over CHF 20,000 must not be undercut

• Flexibility: Cash deposits or contributions in kind are possible

• Legal Certainty: Notarization required

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

• Basis for investments in new technologies

• Strengthening of creditworthiness

• Improvement of balance sheet structure

• Signal of stability to business partners

For growth-oriented LLCs, the capital increase offers a strategic option for sustainable corporate development. Professional execution requires precise planning and legally compliant implementation according to current Swiss legislation.

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

The Ordinary Capital Increase in Detail

The ordinary capital increase is the only form of capital increase in an LLC. The Swiss Code of Obligations (CO) sets clear and binding regulations for the ordinary capital increase in an LLC. Regarding the capital contributions, there is no legally defined upper limit, which gives shareholders great leeway in determining the increase. It is only required that a full payment of the newly paid-in capital is made (no partial payment possible). For the resolution on the capital increase, a qualified majority of the shareholders and the absolute majority of the total share capital is required, ensuring broad approval within the company. These legal frameworks create transparency and security for all 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 qualified majority

• Public Notarization of the resolution

• Payment (e.g., by cash deposit 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:

Resolution

• Convening all shareholders

• Resolution on the capital increase with qualified majority

• Resolution verification by management

• Recording all decisions

• Determining the new capital

• Amendment of the statutes

Commercial Register Entry

• Submission of the necessary documents

• Review by the commercial registry office

• Legally binding registration

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

Economic Reasons for a Capital Increase and Its Impact 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

• Modernization of production facilities

• Digitalization of business processes

Strengthening the Equity Base

• Improvement of creditworthiness

• Optimization of the balance sheet structure

• Increase of liquidity reserves

• Risk minimization in times of crisis

Example 1: Expansion Abroad

The Müller IT Solutions LLC plans to enter the German market. 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

The 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 for participation and strengthening of equity funds.

Effects on the Shareholder Structure

The capital increase can lead to significant changes in the shareholder structure. By taking on new strategic partners, not only are there changed ownership ratios but also a redistribution of voting rights within the LLC. This can significantly influence the decision-making processes and strategic orientation of the company. The redesign of profit sharing 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 favorable credit conditions with banks and strengthens the negotiating position with 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 due. The LLC thus gains financial flexibility and can focus on implementing 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 takes all legal requirements into account minimizes risks and ensures the successful implementation of the capital increase.

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