Simultaneous Registration of an ordinary share capital increase and a Capital Band: What is the correct sequence to follow?

The Swiss Federal Commercial Registry Office (FCRO) published its Communication FCRO 1/25 on 7 April 2025, providing clarification for practitioners.

The capital band, introduced by the corporate law reform (articles 653s et seq. of the Swiss Code of Obligations) that came into force in 2023, offers corporations a new tool for flexible financing. The upper and lower limits of the capital band are determined in relation to the share capital as registered in the commercial register.

  1.   Principle

When an ordinary capital increase and an amendment to the articles of association introducing or modifying a capital band are registered simultaneously, the increased capital can serve as the basis for setting the capital band limits.

Despite the apparent simplicity of this principle, the interaction between an ordinary capital increase and the introduction or modification of a capital band remained open to interpretation and uncertainty.

Communication FCRO 1/25 of 7 April 2025 now provides clarification and outlines the various possible scenarios for simultaneous registration.

  2.   Application Cases

As detailed below, particular attention must be given to the sequence of resolutions adopted by the general meeting to ensure the simultaneous registration of both elements.

Case No. 1: The capital increase is immediately executed by the Board of Directors before the introduction of the capital band

1. The general meeting approves an ordinary capital increase, which is immediately executed by the board of directors (BoD).
2. A second resolution by the general meeting (either after a break or in a new meeting) introduces the capital band, based on the increased capital.
3. The new shareholders must be admitted to vote on the introduction of the capital band.
4. Both resolutions must be registered with the competent register of commerce within six months.
5. This is the easiest solution.

Case No. 2: The capital increase is executed after the general meeting decisions on the capital increase and the capital band

1. The general meeting first resolves to increase the share capital.
2. It then adopts a second resolution to introduce a capital band, conditional upon the capital increase being executed.
3. The BoD executes the capital increase, and both the capital increase and the capital band are then registered together within six months.
4. Even if the capital increase has not yet occurred at the time of the vote, the capital band limits can already be based on the future increased capital.
5. The new shareholders must be informed about the pre-approved introduction of the capital band.
6. This scenario is admissible if the sequence above is strictly followed.

Case No. 3: Capital increase with a maximum nominal amount is executed after the decision on the capital band

1. The general meeting first decides on an ordinary capital increase with a maximum nominal amount.
2. It then adopts a second resolution to introduce a capital band, conditional upon the capital increase being executed and registered simultaneously.
3. At the time of the capital band resolution, the exact amount of the increased capital is not yet known.
4. A “formula” must therefore be used when introducing the authorisation clause, such as: “Share capital after the capital increase plus/minus 20%” or “Share capital after the capital increase plus/minus a certain number of shares.” After execution, the BoD will update the articles with the actual numbers.
5. The BoD has no discretionary power; it merely updates the figures based on the number of subscribed shares.
6. This option is consistent with Case No. 2 above.

  3.   Conclusion

The FCRO’s Communication provides welcome clarifications that should lead to a more harmonized practice among the cantonal registers of commerce.

The sequence of the resolutions adopted by the general meeting is the key to ensuring a smooth simultaneous registration of an ordinary capital increase and the introduction or modification of a capital band.

However, it is important to remember that a different interpretation by a court cannot be ruled out.