Company Conversion in Switzerland: GmbH to AG

Converting a company from one legal form to another — GmbH to AG, sole proprietorship to GmbH, or partnership to corporation — is a standard restructuring procedure under Swiss law. The Federal Merger Act (FusG) provides a framework for conversions that preserves the company’s identity: the same commercial register number, the same contracts, the same employees. No liquidation is required, and the conversion can be structured as tax-neutral.

For acquisitions and mergers (combining two entities rather than changing one), see our M&A guide. For forming a new company from scratch, see the registration guide.

Why convert a company?

The most common path is GmbH to AG, driven by the AG’s advantages for larger operations: freely transferable shares (no notary for transfers), ability to issue different share classes, capital band for flexible financing, and stronger market perception for B2B or international business.

Which conversions are permitted?

FusG Art. 54 lists the permitted conversion routes:

Key rule: A conversion to a legal form with less liability protection is restricted. You cannot convert a GmbH or AG back into a sole proprietorship because that would expose the former shareholders to unlimited personal liability — which the FusG does not permit.

How does the conversion process work?

The general procedure under FusG Art. 53-68 applies to all conversions:

Step 1 — Conversion plan and report. The board or managing directors prepare a conversion plan (Umwandlungsplan) specifying:

• Current and new legal form
• New articles of association (Statuten or Gesellschaftsvertrag)
• Allocation of ownership interests (e.g., how GmbH Stammanteile become AG shares)
• Any changes to capital structure

A conversion report (Umwandlungsbericht) explains the reasons for the conversion and its legal and economic consequences.

Step 2 — Audit confirmation. A licensed auditor confirms that:

• The converting entity’s equity covers the minimum capital of the new legal form
• Creditors’ claims are fully covered
• The allocation of ownership interests is fair

Step 3 — Shareholder resolution. The shareholders approve the conversion. Required majorities:

• GmbH → AG: two-thirds of votes represented + absolute majority of total capital (OR Art. 808b)
• AG → GmbH: two-thirds of votes represented (OR Art. 704)
• Sole proprietorship → GmbH: sole proprietor’s decision (no meeting needed)

Step 4 — Notarisation. The cantonal notary authenticates the shareholder resolution, the conversion plan, and the new articles of association.

Step 5 — Commercial register filing. The board files the conversion with the cantonal register. Required documents:

• Authenticated shareholder resolution and conversion plan
• New articles of association
• Auditor’s confirmation
• Board member/director identification and signature specimens (if changed)
• For GmbH as target form: shareholder list

Step 6 — Registration. The register office processes the filing (one to two weeks). The conversion takes legal effect on the date of registration. The company retains its existing register number — a new entry is created under the new legal form, and the old entry is marked as converted.

How do you convert a GmbH to an AG?

This is the most common conversion and follows the general process above with these specifics:

Capital requirement: The AG must have minimum share capital of CHF 100,000, of which at least CHF 50,000 must be paid in. If the GmbH’s current capital is below CHF 100,000, a capital increase must be executed simultaneously with the conversion. If the GmbH’s capital is CHF 100,000 or more and fully paid in, no additional payment is needed.

Share allocation: Each GmbH Stammanteil (minimum nominal value CHF 100) is converted into AG shares (minimum nominal value CHF 0.01). The conversion ratio must reflect the existing ownership proportions unless all shareholders agree otherwise.

Example: A GmbH with CHF 20,000 capital (two shareholders, 50% each) converts to an AG:

1. Capital must be increased to at least CHF 100,000 (CHF 80,000 new capital, paid into a blocked bank account)
2. Shareholder resolution: conversion + capital increase (two-thirds majority)
3. New AG articles drafted (share capital CHF 100,000, divided into 1,000 shares at CHF 100 nominal)
4. Each shareholder receives 500 shares
5. Notarisation, auditor confirmation, commercial register filing
6. GmbH entry marked as converted; new AG entry created under the same register number

What changes:

• Legal form: GmbH → AG
• Shares: Stammanteile → Aktien (freely transferable without notary, unless articles restrict)
• Governance: Geschaeftsfuehrer → Verwaltungsrat (board of directors)
• Shareholder register: public (GmbH shareholders in register) → private (AG shareholders not in register)

What stays the same:

• Commercial register number
• All contracts, licences, permits
• Employment relationships
• Tax positions (loss carryforwards, VAT registration)
• Bank accounts (bank updates its records)

How do you convert a sole proprietorship to a GmbH?

Under FusG Art. 69, a sole proprietorship registered in the commercial register can transfer its business to a new or existing company through universal succession:

Step 1 — Form the GmbH. The sole proprietor (or together with additional founders) forms a new GmbH following the standard registration process. The GmbH’s articles specify the share capital and structure.

Step 2 — Transfer agreement. A transfer agreement (Uebertragungsvertrag) specifies which assets and liabilities transfer from the sole proprietorship to the GmbH. In most cases, the entire business is transferred.

Step 3 — Valuation. The sole proprietorship’s assets are valued. If they are contributed as in-kind contributions (Sacheinlagen) to the GmbH’s capital, a qualified formation report (Gruendungsbericht) and auditor confirmation are required.

Step 4 — Registration. Both the new GmbH formation and the deletion of the sole proprietorship are filed with the commercial register simultaneously. The sole proprietorship’s entry is deleted with a reference to the successor GmbH.

Key consideration: The sole proprietorship must be registered in the commercial register for the FusG universal succession to apply. If the sole proprietor’s annual turnover is below CHF 100,000 and they are not registered, they must either register first (voluntary registration is possible) or form the GmbH separately and transfer assets individually (which requires contract-by-contract consent from counterparties).

Tax: The transfer can be tax-neutral if structured correctly (book value carryover, continued business). A five-year lock-up period applies: if the sole proprietor sells the GmbH shares within five years of the conversion, the deferred capital gain from the business transfer becomes taxable.

How do you convert an AG to a GmbH?

Less common but straightforward. Reasons include simplifying governance for a small shareholder group, reducing administrative overhead, or ensuring all shareholders are visible in the commercial register (useful for compliance or regulatory purposes).

Process: Same general procedure as above. Key specifics:

• AG share capital of CHF 100,000 can be reduced to CHF 20,000 (GmbH minimum) as part of the conversion — but this triggers the creditor protection procedure (auditor confirmation, two-month creditor call)
• If the AG maintains its capital at CHF 100,000 or above, no creditor protection procedure is needed
• AG shares (Aktien) become GmbH Stammanteile — each shareholder’s holding is recorded in the commercial register (loss of privacy)
• Future share transfers require notarisation (GmbH requirement)

Shareholder approval: Two-thirds majority of votes represented at the general meeting.

How is a conversion taxed?

Federal and cantonal profit tax: A conversion under the FusG is tax-neutral provided:

• Assets are carried over at book values (no step-up)
• The business continues in the new legal form
• The tax liability remains in Switzerland

No profit tax, real estate gains tax, or transfer tax is triggered.

Stamp duty (Emissionsabgabe): The 1% federal issuance stamp duty applies only to new equity exceeding the cumulative CHF 1 million threshold. For most conversions (especially GmbH to AG within the same capital amount), no stamp duty is owed.

VAT: No VAT consequences — the conversion is not a supply of goods or services. The VAT registration number typically remains the same (the Federal Tax Administration updates its records).

Sole proprietorship to GmbH — special rule: The conversion from personal to corporate taxation triggers a deemed disposal of business assets. This is tax-neutral under the reorganisation relief, but a five-year lock-up applies: if the owner sells the GmbH shares within five years, the originally deferred gain is taxed as personal income. This is the most important tax trap in this type of conversion.

Tax ruling: For any conversion, a pre-transaction tax ruling from the cantonal tax authority is strongly recommended. The ruling confirms the tax-neutral treatment and prevents surprises during the next tax assessment. Cost: typically free (most cantonal authorities do not charge for rulings), but the preparation by a tax advisor costs CHF 1,000-3,000.

What does it cost?

Total for a standard GmbH → AG conversion: CHF 5,000–12,000. Total for sole proprietorship → GmbH: CHF 5,000–15,000 (higher due to formation costs and valuation).

Timeline:

Why you can trust this guide

This guide is written by Florian Rosenberg, a former fiduciary office manager who has managed company conversions between Swiss legal forms. Legal references cite the Federal Merger Act (FusG Art. 53-68) and the governing provisions of the Code of Obligations. Verify any point against the primary source.

Frequently asked questions