Bankruptcy (Konkurs / faillite)

How bankruptcy works under Swiss law

Swiss bankruptcy is governed by the Debt Enforcement and Bankruptcy Act (SchKG). A court opens bankruptcy either at the request of a creditor who has pursued debt enforcement (Betreibung auf Konkurs) or at the request of the company itself when it is over-indebted (Art. 725b CO, in force since 1 January 2023). The court may also open bankruptcy when a moratorium (Nachlassstundung) ends without a confirmed composition agreement.

The opening of bankruptcy dissolves a stock corporation (AG) (Art. 736 para. 1 no. 3 CO) and a GmbH (Art. 821 para. 1 no. 3 CO). From that moment, the bankruptcy office takes over the administration of the company's assets and liabilities. The board of directors loses its power to represent the company.

The board's duty when over-indebted

Under Art. 725b CO, if there is reason to fear over-indebtedness, the board of directors must draw up interim accounts at going-concern and liquidation values. If both show that liabilities exceed assets, the board must notify the court, unless creditors subordinate claims covering the shortfall or there is a reasonable prospect of removing the over-indebtedness within 90 days. The court then decides whether to open bankruptcy or grant a moratorium (Nachlassstundung, Art. 293 ff. SchKG). The moratorium gives the company time to restructure under supervision and avoid a bankruptcy altogether.

How bankruptcy appears in the register and SHAB

The register office enters the opening of bankruptcy and adds «in Liquidation» to the company name. The SHAB publishes the opening, the call to creditors, and later the closure or suspension of the proceedings. A typical notice states the court that opened the bankruptcy, its date, and the bankruptcy office responsible for administering the estate.

Suspension for lack of assets

When the estate has too few assets to cover the costs of the proceedings, the court suspends the bankruptcy (Art. 230 SchKG). If no creditor advances the costs within ten days, the proceedings are closed. The register entry stays for two years after the suspension is published; if no justified objection is filed in that time, the company is deleted (Art. 159a HRegV). In practice, a large share of bankruptcies ends this way.

Bankruptcy versus debt collection

Debt collection (Betreibung) is the enforcement procedure that precedes bankruptcy. It runs through the debt enforcement office and is recorded in a separate register (the Betreibungsregisterauszug). A company can face dozens of debt collection proceedings without ever being declared bankrupt. Prospex tracks commercial register entries and SHAB publications but does not hold debt enforcement records.

What a bankruptcy entry tells you

A company «in Liquidation» following a bankruptcy is being wound up by the bankruptcy office, and its creditors are unlikely to be paid in full. Before signing a contract or extending credit, check the company's register status. If you depend on a customer or supplier, set up monitoring so you learn of a dissolution before the deletion. The liquidator page covers who signs for a company in voluntary liquidation; in a bankruptcy, the bankruptcy office acts. For context on the full process, see our guide on Swiss company liquidation and reading SHAB notices.

Revocation of bankruptcy

A bankruptcy can be revoked if the debtor pays all admitted claims in full or if all creditors withdraw their claims (Art. 195 SchKG). The court then revokes the opening, and the register office removes the «in Liquidation» suffix. The company resumes its activity as if the bankruptcy had not occurred.