Revision of stock corporation law

The current Swiss company law is more than 30 years old. The main objectives of the revision of company law are to improve corporate governance, make capital regulations more flexible, strengthen shareholder and minority rights and modernize the law. Some changes are already in force today. The remaining provisions will come into force on January 1, 2023.

We will inform you about the most important innovations in a 3-part blog:

1. Changes to capital regulations and reserve allocation, modernization of the Annual General Meeting

2. Gender benchmarks and sustainability reporting

3. Interim dividend and changes regarding capital loss and over-indebtedness

    

Capital band

The newly introduced capital band is intended to increase the flexibility of capital increases and reduce administrative hurdles. Under the old law, it was already possible for the General Meeting to authorize the Board of Directors to increase the capital in one or more steps within a specified range over a period of two years by means of an authorized capital increase. This period has now been extended to five years. Furthermore, it is not only possible to increase capital, but also to reduce it within the capital band. The biggest change, however, concerns the administrative process. Whereas previously a general meeting had to be held after each capital increase and the increase had to be settled with the taxes, this can now be done once after the entire duration of the capital band for the entire capital difference. The prerequisite for the implementation of a capital band is a statutory basis and no voluntary waiver of an audit (opting out).

Reserve allocation

The second reserve allocation of 10% on super dividends is no longer applicable. Instead, 5% of the annual profit must now be allocated to the statutory retained earnings until this reaches 50% of the capital, in place of 20% as before. Companies whose main purpose is to invest in other companies still only have to allocate reserves until they reach 20% of the capital.

Modernization

Annual General Meeting In times of digitalization, the provisions of the old company law regarding the Annual General Meeting seemed like something from another era. This is now a thing of the past! The documents for the Annual General Meeting can now be made available to shareholders digitally. They only have to be distributed physically on request. Flexibility has also been created with regard to the venue of the meeting. Shareholders no longer have to meet in one place; video conferences are also possible.

Conclusion

There are exciting opportunities for Swiss companies and some administrative adjustments will have to be made. In particular, articles of association, regulations and contracts must be adapted to the new law within two years, i.e. by January 1, 2025. We are happy to answer any questions you may have and look forward to supporting you with the transition.

 

Continue to part 2 and part 3.