Swiss corporate law reform

Swiss company law will be reformed in multiple ways, in this overview we have outlined some of the upcoming changes which will be implemented in 2023.

What is new?
Valuta of the share capital
The general meeting of shareholders of both public and private limited liability companies (the Aktiengesellschaft, or AG and the Gesellschaft mit beschränkter Haftung, or GmbH) will be allowed to change the currency of the capital of the respective AG or GmbH in a permissible currency, such as USD, EUR, GBP or JPY. The accounting and financial reporting must be done in the same chosen currency of the share capital. In order to change the currency of the capital, the articles of association of the AG or GmbH will need to be amended by means of a notarial deed. It must be noted that the share capital needs to still equal at least the minimum capital of an AG, namely CHF 100,000 or a GmbH, namely CHF 20,000.

Place of general meeting of shareholders
Furthermore, it will be allowed to hold General Meetings of Shareholders physically and/or (partly) virtually, or by written circular resolution. It will, if certain formalities have been met, also be possible to hold a general meeting of shareholders abroad. In order to hold a general meeting of shareholders virtually or abroad, an amendment of the articles of association of the AG or GmbH is required.

Authority of the general meeting of shareholders
Aside the current authority of the general meeting of shareholders, the following matters will be attributed to authority of the general meeting of shareholders: (i) the introduction of a capital band; (ii) the change of currency of the share capital; (iii) the introduction of the casting vote of the chairman in the general meeting of shareholder; (iv) the introduction of a provision in the articles of association concerning the holding of the general meeting of shareholders abroad; (v) the introduction of an arbitration clause in the articles of association; (vi) the waiver of the appointment of an independent proxy for the holding of a virtual general meeting of shareholders for companies whose shares are not listed on a stock exchange.

Contribution via offsetting
The new law introduces the possibility of the contribution that may also be made "by offsetting against a claim", the so-called contribution in kind. The "offsetting against a claim" also counts as "cover" if "the claim is no longer covered by assets”. In other words: a receivable that is not recoverable can in principle be offset. It is now mandatory to include offsetting contributions in the articles of association. Thus, not only the amount of the claim brought for to be offset, but also the name of the shareholder and the shares issued for it must be stated. The general meeting of shareholders may repeal the provisions of the articles of association after ten years. This form of inclusion was already known for the contribution in kind and the acquisition in kind and is now also applied for the offsetting contribution. Additionally, 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 offset stability 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.

Interim distributions
The new company law provides that interim dividends may be distributed .
A basis in the articles of association is not required for this.
The procedure must be carefully followed because as interim dividends
entail the risk of withdrawing funds from the company even though
the operating business is already performing poorly,
interim financial statements must be prepared in advance.
The interim financial statements must be
prepared in accordance with the
provisions governing the annual
financial statements and shall contain a balance sheet,
an income statement and an annex. However, the law
permits certain simplifications or reduced requirements,
provided that this does not impair the presentation
of the course of business. When determining the interim dividend,
allocations to the statutory and voluntary reserves
must be made in advance. The interim financial
statements must in principle be
audited by the auditors prior to the resolution of
the shareholders' meeting, otherwise the resolution
of the shareholders' meeting is null and void.
If the company is subject to neither the ordinary
nor the limited audit obligation there is no duty to audit.
Moreover, the duty of due diligence should prohibit the board
of directors from proposing an interim dividend to the
shareholders' meeting if this would jeopardize the company's required liquidity.