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Capital increase audit

There are three options for increasing the share capital of a company: The regular, the approved and the conditional capital increase. In addition, differentiation is made between simple and qualified capital increases. The latter includes increases via contributions in kind, asset takeovers and offsetting. In addition, it is possible to increase the share or participation capital from freely disposable capital reserves. Depending on the type of capital increase, no audit may be required – in the case of a regular capital increase with cash (without subscription rights restrictions), for instance. The audit of the capital increase report is particularly necessary in the case of qualified capital increases (at least by a certified auditor). In the case of a conditional capital increase, a licensed audit expert has to examine the issuing of the new shares for compatibility with Swiss law and statutes.

Good to know

In situations of excess debt, the board of directors often wants to bring about restructuring by convincing the company’s creditors to waive their loans or account credits and convert these into equity of the company. This type of restructuring is very common, especially among smaller, owner-run companies. Although this process does not provide the company with any new funds, the equity situation is improved. In particular, this lack of cash inflow is one reason why certain authors consider this type of restructuring in situations of excess debt to be inadmissible. They see this as encompassing so-called “below par issuance”. Other authors believe that this type of transaction should be permitted if it results in the excess debt being removed (or in combination with other restructuring measures). This is also supported by the argument that the other creditors of the company enjoy an improved situation with the conversion of liabilities into equity. 

In its auditing work, PRÜFAG accepts the conversion of liabilities into equity at companies with excess debt, to the extent that the excess debt is completely removed by the restructuring measure(s).

Project Lead
Project Lead
  • Daniel Carotta

    Daniel Carotta

    +41 44 533 76 00

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