Converting a limited liability company (LLC) into a public limited company (PLC) – legal basis and procedure

The conversion of a limited liability company (LLC) into a public limited company (PLC) is based on the provisions of the Federal Act on Mergers, Demergers, Conversions and Asset Transfers (Merger Act, FusG). This law regulates the legal framework and procedure for conversion.

Type of conversion

An essential feature of the conversion is that the existing company continues to exist. In contrast to liquidation and re-establishment, the company does not have to be completely dissolved. The company continues to exist, but takes on the legal structures of a public limited company.

Effects of the conversion

The conversion involves an adjustment to the legal requirements of the new legal form. A LLC that is converted into a PLC must meet all the requirements that would also apply to the formation of a new public limited company. This includes, in particular, an increase in the share capital. While a minimum capital of CHF 20,000 is required for a LLC, a PLC requires a minimum share capital of CHF 100,000. A capital increase is therefore essential before the conversion can be completed.

The conversion process

The conversion of a LLC into a PLC takes place in several steps. The first and decisive step is the capital increase. Since a PLC requires significantly higher share capital, the shareholders must first ensure that the required capital of at least CHF 100,000 is available. This can be done either by contributing additional funds or by other appropriate measures.

After the capital increase, a shareholders' meeting must be convened and held before a notary public. At this meeting, the shareholders officially resolve to convert the LLC into a PLC. At the same time, the new articles of association of the company are adopted, which must be adapted to the requirements of a public limited company. Another key point is the election of the board of directors. In many cases, the existing shareholders also take on board of directors functions, ensuring continuity within the company.

Once the shareholders' meeting has approved the conversion and all formal steps have been completed, the change is submitted to the commercial register. Both the capital increase and the conversion are entered in the commercial register. This entry makes the conversion legally effective, and the LLC continues to exist as a public limited company.

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If a company is looking for external investors or wants to give employees a stake in the business, there is often no way around converting from an LLC to a PLC. The advantages are the anonymity of the shareholders and the easier transferability of the shares.

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