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A capital loss arises when a company’s equity (share capital plus legal and free reserves) is no longer fully covered by its assets — that is, when accumulated losses have eroded the company’s capital base to such an extent that liabilities exceed or threaten to exceed available equity. Depending on the severity, this may constitute a capital loss (Unterbilanz) or even overindebtedness (Überschuldung) under Swiss law.

Many entrepreneurs wonder whether they should distribute profits each year or rather leave them in the company. From a tax perspective, it can be advantageous to retain profits in the business instead of paying them out regularly and being taxed as income. If the shares of the company are sold later, you realize a tax-free capital gain – and in the best case “sell the full wallet” including retained profits, because the sale proceeds are correspondingly higher. This is precisely where indirect partial liquidation comes into play. This special rule can result in the tax-free capital gain being retroactively reclassified as taxable income. However, those who know the rules can prevent this and make use of the advantage – but must also ensure that the buyer does not drain the company’s cash within the next five years.

The acquisition, merger or sale of a company – Mergers & Acquisitions (M&A) – is a significant process for both buyers and sellers. Such a corporate transaction usually involves substantial amounts of money, reputation, and responsibility towards employees, customers, and the business-owning family. Particularly for small and medium-sized enterprises (SMEs), a clear structure and legally sound guidance throughout the transaction are crucial for its success. At the same time, almost every deal follows a proven process with recurring milestones: preparation, letter of intent, contract negotiations, due diligence, signing, closing, and integration. In this article, we provide you with a practical, concise overview of how a deal typically unfolds, explain the key terms, and outline a realistic timeline.

Whether it's a company sale, a financing round or succession planning – as soon as a company changes ownership or a new investor joins, an important question arises: How well do you really know the legal and economic starting position of the company? This is exactly where due diligence comes in. It makes visible what would otherwise remain hidden and forms the foundation for viable decisions in transactions.

Since 1 January 2023, Swiss stock corporation law has provided for the possibility of holding the Annual General Meeting (AGM) with the help of electronic means. Even before the revision of the law, it was possible to hold a general meeting at several conference venues in parallel and to combine it with the help of a live broadcast. There now also is the possibility for individual shareholders to participate via video chat – or even for the AGM to take place completely virtually. Incidentally, this also applies to limited liability companies. In our blog post, you will learn about the opportunities and risks of conducting the AGM electronically and whether it is suitable for your company.

In Switzerland, almost 100,000 SMEs will be facing succession issues in the coming years. One in three of these will not find a suitable successor. Those who postpone succession planning for too long will not only miss out on financial opportunities, but also risk not being able to entrust their life’s work to reliable hands or having to give up their say completely. In the worst case, the company may even face liquidation.