In a practice note dated 27 August 2026, the Federal Commercial Register Office (EHRA) clarified the registration practice applicable where a company‘s articles of association provide for conditional capital both within a capital band and outside the capital band. This article sets out the resulting registration practice.
1) Background
Since the entry into force of the corporate law revision on 1 January 2023, conditional capital is also possible within the framework of a capital band (“conditional capital within the capital band”, article 653t(1) no. 9 Swiss Code of Obligations (CO)). It remains possible to include conditional capital outside the capital band (“conditional capital outside the capital band”, article 653 et seq. CO). Under article 653a(1) CO, the nominal amount by which the share capital may be conditionally increased may not exceed half of the share capital registered in the commercial register. In this context, the question arises whether a cumulation in the articles of association of the possibility of conditional capital within the capital band up to the maximum size of the capital band and of conditional capital outside the capital band up to the maximum amount under article 653a paragraph 1 CO is permissible, or whether this would impermissibly exceed the maximum amount of conditional capital under article 653a paragraph 1 CO.
Because the commercial register authorities‘ power of review over questions of substantive law is limited, EHRA concludes that the cumulation of conditional capital within and outside the capital band does not clearly and unambiguously contravene applicable law and rests on an interpretation of the law. The commercial register authorities‘ power of review must therefore be considered limited in this respect, leaving the question of permissibility to the civil courts. The practice note sets out the latest registration practice.
2) Registration Practice of the Commercial Register Authorities
a) Conditional Capital Within the Capital Band
Even where the articles of association already provide for conditional capital outside the capital band, at the maximum amount under article 653a(1) CO or otherwise, EHRA will register conditional capital within the capital band.
b) Conditional Capital Outside the Capital Band
A company whose articles of association already provide for a capital band containing conditional capital cannot – due to the limited power of review of the commercial register authorities – be prevented from additionally registering conditional capital outside the capital band, if applicable up to the maximum amount under article 653a(1) CO. Due to their limited power of review, the commercial register authorities do not have to examine whether conditional capital within the capital band would reduce the permissible maximum amount of conditional capital outside the capital band (regardless of whether option or conversion rights have already been issued or not).
c) Lapse of the Capital Band with Conditional Capital
Where a capital band containing conditional capital lapses, for example upon an ordinary capital increase, while option or conversion rights remain outstanding under the conditional capital within the capital band, that conditional capital must survive as conditional capital outside the capital band to protect the rights of the holders of option and conversion rights, notwithstanding the absence of an explicit statutory basis for such survival. The disclosures in the articles of association pursuant to article 653t(1) no. 9 CO may not be deleted for transparency reasons; if it had been integrated into the authorization clause, a new provision on the conditional capital must be added to the articles of association upon deletion of that clause.
Following such conversion, the company may hold, side by side, a pre-existing conditional capital at the maximum amount under article 653a CO and a (new) conditional capital originally created via the capital band, up to the former upper limit of the band under article 653s(2) CO. Because that new conditional capital remains identified in the register as having been created via the capital band, EHRA will not object to its registration for breach of article 653a CO; conversely, on a later registration of conditional capital outside the capital band, a conditional capital created via the capital band need not be counted towards the article 653a CO maximum. Cancelling or amending the provision on conditional capital created via a capital band requires, as for ordinary conditional capital, confirmation by a licensed auditor (article 653u(5) CO in conjunction with article 653i(2) CO).
Deletion of the capital band with conditional capital, without any survival of conditional capital created via the band, will likewise be registered upon submission of a report by a licensed auditor confirming that the conversion or option rights have lapsed, that none were ever granted, or that all holders have waived their exercise (article 653u(5) CO in conjunction with article 653i(2) CO).
3) Practical Significance and Judicial Review
The EHRA practice note provides registration certainty, but not substantive-law certainty. It establishes that commercial register authorities will not refuse registration merely because a company‘s articles of association provide for conditional capital both within and outside a capital band, even where the aggregate theoretical conditional increase capacity exceeds one-half of the registered share capital.
The practice note does not, however, resolve whether such structures ultimately comply with article 653a(1) CO as a matter of substantive corporate law. In the event of a dispute, that question remains subject to review by the civil courts.
For companies, and in particular listed companies using convertible bonds, employee participation plans or other equity-linked instruments, the practice note is nevertheless of practical importance. It provides a clear registration path for maintaining flexibility in the use of conditional capital within and outside a capital band and for preserving outstanding option and conversion rights when a capital band lapses, while expressly leaving the underlying substantive-law question open.
Samuel Hochstrasser (samuel.hochstrasser@nkf.ch)