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16 August 2022 New Corporate Law: The offsetting contribution (no. 8)

The new company law, which comes into force on 1 January 2023, brings many changes. In our current blog series, we present these in detail.

One change brought about by the revised company law concerns offsetting contributions. Until now, it has been disputed whether offsetting a contribution with non-recoverable receivables is possible. This article discusses which changes the revision will bring about from this point of view and what this means in practice.

What is offsetting contribution?

The shareholder has a duty to pay his contributions. The payment of the contribution can be made in various ways: In cash (so-called cash liberation), in kind, in equity or by offsetting it against a claim (so-called offsetting liberation).

In order for the contribution to be made by offsetting, two opposing claims are required: The shareholder settles his contribution debt for shares subscribed by him (claim of the company against him) with a pre-existing claim which he has against the company. Thus, its purpose quickly becomes clear. The purpose of payment by offsetting is the conversion of debt capital into equity capital of a company (also referred to as a "debt-equity swap"). From the company's point of view, this is a pure liability swap; debts (borrowed capital) are converted into equity. The assets are not affected.

Unlike a cash contribution, no new funds are injected into the company. However, the company is relieved of liabilities, which increases the company's own funds.

The offsetting contribution can take place in the context of the incorporation of a company (rare case), the subsequent payment of not yet fully paid-in contributions (rare case) or on the occasion of a capital increase (most frequent case).

What changes under the new company law?

The offsetting contribution has been around for quite some time. In addition to numerous ambiguities, it was disputed for a long time, among other things, whether a set-off contribution is also possible in the case of non-recoverable claims, i.e., even if the claims of the creditors against the company are no longer fully covered by the assets of the company limited by shares, i.e. the company is over-indebted.

1. Offsetting contribution in all deposit payment situations

The new Art. 634a para. 1 CO states that the contribution may also be made "by offsetting against a claim". The explicitly stated admissibility of the subsequent payment of a contribution by offsetting remains unchanged, but is now found in Art. 634b para. 2 revised CO. This clarifies that offsetting contribution is available in all contribution situations.

2. Receivables that are not recoverable

Art. 634a para. 2 revised CO now also clearly states that "offsetting against a claim" also counts as "cover" if "the claim is no longer covered by assets". This answers the controversial question of whether a receivable that is not recoverable can in principle be offset.

3. Articles of Association basis

Probably the most significant change concerns the basis in the articles of association, as it is now laid down in Art. 634a para. 3 revised CO. It is now mandatory to include offsetting contributions in the articles of association. Thus, the amount of the claim brought for to be offset, the name of the shareholder and the shares issued for it must be stated. The general meeting may repeal the provisions of the articles of association after ten years.

The new Articles of Association basis was already known in this form for the contribution in kind and the acquisition in kind and is now also applied for the offsetting contribution. According to the new law, the articles of association are to be made accessible free of charge on the internet, which significantly enhances the impact of publication in the articles of association

The provisions on the written accountability report of the founders or the board of directors on the existence and offsettability of the debt remain unchanged. This report must be audited by a licensed auditor who must confirm in writing that the report is complete and correct.  


In principle, the changes in the revision of company law are stringent and to be welcomed. Only the Articles of Association, which is made freely accessible on the internet, is likely to have a deterrent effect. However, it is justified especially with regard to the new possibility of offsetting non-recoverable claims on the one hand and the protection of creditors on the other.

Our team will be happy to answer any specific questions you may have.

Other articles in the series:

Authors: Francesca Pesenti, Roland M. Müller