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Starting from January 1, 2025, new legal regulations regarding the opting-out option for companies will come into effect in Switzerland. These changes primarily impact companies experiencing capital loss and their audit obligations. Businesses must ensure compliance with the new rules to avoid legal consequences and financial risks.
A capital loss occurs when a company’s equity falls below 50% of its paid-in share capital or nominal capital. Under Article 725a of the Swiss Code of Obligations (CO), the board of directors must take immediate action in case of capital loss. This includes preparing an interim financial statement and, if necessary, convening a general meeting to discuss restructuring measures. Failure to take appropriate action can lead to over-indebtedness and, ultimately, mandatory insolvency filing.
Until now, companies with fewer than 10 full-time employees (FTE) were eligible to opt out of the statutory audit requirement under certain conditions. However, starting from January 1, 2025, new regulations will apply, particularly for companies facing financial distress.
Under the revised law, companies experiencing capital loss will no longer be eligible for the opting-out exemption. Even if a company meets the standard opting-out criteria, it will still be required to undergo a limited statutory audit as long as it remains in a capital loss situation. This measure aims to strengthen creditor protection and encourage early restructuring.
The new regulations will have significant implications, especially for financially struggling companies:
The updated opting-out restrictions offer several benefits but also present challenges:
From 2025 onwards, companies suffering from capital loss will no longer be eligible to opt out of the statutory audit requirement. Even if they meet the previous opting-out criteria, they must conduct a limited statutory audit. These new regulations aim to enhance creditor protection and promote early restructuring for financially troubled companies. Businesses should familiarize themselves with these legal changes in advance to avoid financial and legal risks.