Fundamentals of Liquidating an LLC or Stock Corporation
The limited liability company (LLC) and the stock corporation are the two most common types of corporations under Swiss corporate law. Both legal forms are characterised by a clear separation between the company’s assets and the private assets of its owners.
The legal framework governing liquidation is set out in the Swiss Code of Obligations (CO). The Commercial Register Office oversees the formal liquidation process and ensures that all legal requirements are met.
The Dissolution Process
The dissolution of an LLC or stock corporation begins with a formal resolution. The process is subject to clearly defined legal requirements under the Swiss Code of Obligations.
Resolution of the Shareholders’ Meeting or General Meeting
The resolution to dissolve the company must be adopted by the shareholders’ meeting of an LLC or the general meeting of a stock corporation. The resolution must be publicly notarised.
The dissolution is then reported to the Commercial Register Office. The company name subsequently receives the addition “in liquidation”, while the company remains registered in the commercial register.
Once the resolution has been adopted, the actual liquidation phase begins. The company retains its legal personality, but its business activities are limited to the steps required to complete the liquidation.
The Liquidation
The liquidation of an LLC or stock corporation requires the appointment of a liquidator. This role may be assumed by an existing managing director, a member of the board of directors or an external specialist.
Appointment of the Liquidator
The liquidator plays a central role in the dissolution process. The legal requirements include the following:
Residence in Switzerland: At least one liquidator must be resident in Switzerland.
Authority to represent the company: The liquidator must have individual signatory authority or, where several liquidators are appointed, collective signatory authority.
Entry in the commercial register: The liquidators must be entered in the commercial register together with the resolution to dissolve the company.
Duties and Responsibilities
The liquidator has a wide range of duties, including:
Preparing an opening liquidation balance sheet
Managing the company’s assets
Winding up ongoing business activities
Collecting outstanding receivables
Settling liabilities
Representing the company externally
Preparing the final liquidation accounts
Liquidators may be held personally liable for damage caused through a culpable breach of their duties. Careful documentation of all actions and decisions is therefore essential. In complex cases, obtaining support from a legal expert is advisable.
Companies requiring legal and administrative support during the dissolution process can carry out the liquidation of an LLC or stock corporation with Jurata. Jurata prepares the necessary documents, coordinates the notarisation of the dissolution resolution, arranges the publication of the call to creditors and prepares the application for the company’s subsequent deletion from the commercial register. This ensures that the key formal steps of the liquidation are handled in a structured manner while keeping the administrative burden on shareholders to a minimum.
Inventory and Realisation of Assets
At the beginning of the liquidation, the liquidator prepares a complete inventory of the company’s assets. This includes tangible assets such as real estate, machinery, vehicles and inventories, as well as intangible assets such as patents, trademarks, licences and existing customer relationships. This comprehensive inventory forms the basis for the remainder of the liquidation process.
The assets must be realised with the aim of achieving the best possible value. In doing so, the liquidator must take the interests of both creditors and shareholders into account.
Assets may be realised through targeted sales, auctions or transfers. Careful documentation of all asset realisation activities is legally required and serves as evidence that the liquidation has been conducted properly.
Publication of the Call to Creditors
The call to creditors is a central part of the liquidation process. The liquidator must invite the company’s creditors to submit their claims by publishing a liquidation call to creditors in the Swiss Official Gazette of Commerce, known as the Schweizerisches Handelsamtsblatt (SHAB).
Important deadlines and requirements relating to the call to creditors:
The legal provisions governing the call to creditors were simplified on 1 January 2023 through an amendment to Article 745 paragraph 2 of the Swiss Code of Obligations. Since then, the liquidation call to creditors only needs to be published once.
The company may generally be deleted from the commercial register no earlier than one year after the call to creditors has been published. However, an application for earlier deletion may be submitted after only three months if a licensed audit expert confirms that all debts have been settled and that no third-party interests are at risk.
Creditors must submit their claims to the liquidator in writing and provide the relevant supporting evidence. Claims that have not been submitted but are evident from the company’s accounting records must also be taken into account. The liquidator carefully reviews the claims submitted and decides whether they should be recognised.
Distribution of Assets After All Debts Have Been Settled
The proceeds from the liquidation are distributed in accordance with a clearly defined legal framework. Unless the articles of association provide otherwise, any liquidation surplus is distributed among the shareholders in proportion to their respective ownership interests:
For an LLC: Distribution according to the shareholders’ capital contributions
For a stock corporation: Distribution according to the nominal value of the shares
Conclusion
The orderly liquidation of an LLC or stock corporation requires careful planning and professional execution. A structured approach helps protect shareholders, managing directors and members of the board of directors from legal risks and financial disadvantages.
Key factors for a smooth liquidation include:
Planning the dissolution at an early stage
Complying with all statutory deadlines and legal requirements
Obtaining professional support from qualified experts
Maintaining complete documentation of every step in the liquidation process
“A professionally conducted liquidation provides legal certainty and helps protect the shareholders’ private assets.”
Contact us for a non-binding consultation regarding professional support with the dissolution of your company. With Jurata, you can manage the liquidation of your LLC or stock corporation safely and efficiently.
