Bankruptcy as a result of defects in the organization of the company

This type of bankruptcy usually occurs when the company has already ceased trading. It is therefore not important from an economic perspective.

Bankruptcy as a result of defects in the organization of the company (Art. 731b CO) is not bankruptcy in the ordinary sense, caused by a problem of excessive debt. This specific instance of bankruptcy occurs when the company no longer has all the organs required by law or when one of these organs is not composed according to the rules. Initiation of proceedings for bankruptcy as a result of defects in the organization of the company features significantly in the official statistics of bankruptcies in Switzerland: in 2011, this represented 2,478 out of a total 13,551 proceedings, according to the Swiss Federal Statistical Office (OFS).

In actual fact, these figures often conceal an ordinary administrative procedure intended to remove companies that no longer exist but which have never been removed from the trade register. Since these companies no longer have all the required organs, the trade register official has the option of asking the court to issue a wind-up order for the company in order to “tidy up" their database.


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Last modification 20.08.2018

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