Stock Corporation Law Reform

In June 2020, the revision of the Stock Corporation Act in the Code of Obligations (CO) was approved by Parliament. The new law will come into force on January 1, 2023.

Some of the changes mainly affect listed companies. In particular, there are new regulations regarding the proportion of women (target gender quota of 30% on the board of directors and 20% on the executive board) or compensation issues. In the latter case, the Ordinance against Excessive Compensation (VegüV), which became known as the "Minder Initiative" or "Rip-off Initiative", was incorporated into company law.

In the following, we would like to focus on the most important changes for non-listed SMEs.

Capital

• Cancellation of the minimum par value of the share capital
• Possibility to pay share capital in foreign currencies (determined by the Federal Council)
• (intended) takeover of assets in kind: the transparency requirements in the articles of incorporation regarding the assets taken over by shareholders or their related parties do not apply
• Introduction of a capital band: The Articles of Incorporation can now authorize the Board of Directors (BoD) to increase or decrease the capital within two lock-up periods for a maximum of 5 years.
• Capital reserves may be distributed if the statutory capital and retained earnings exceed half of the share capital recorded in the commercial register
• Permission to distribute interim dividends, provided that revised interim financial statements are available

Tax effects due to adjustments related to capital:

• even if the accounting is done in a foreign currency, the taxable equity and the taxable net profit must be converted into CHF. The closing rates published by the FTA at the end of the tax period (equity) or the average tax rates for the tax period (net income) are applicable.

General Meeting (GV)

• Possibility of virtual AGM, if suitable electronic tools are used
• Possibility of parallel implementation at several conference venues, provided that sound and image can be transmitted
• Implementation of the GV abroad is permissible under certain conditions
• Admissibility of circulation resolutions
• To convene an AGM, 10% of the share capital or - new - 10% of the votes are required. The previously required threshold of CHF 1 million no longer applies.
• Right of tranching upon (cumulative) holding of 5% of the share capital or votes (previously 10%)

Corporate Governance

Strengthening minority shareholders through

• Entitlement to written information outside the AGM, to be answered by the BoD within 4 months, and to inspect the books of account if this is necessary to exercise shareholders' rights and if the threshold of 5% of the share capital or votes is reached.
• Possibility of stipulating an arbitration clause in the Articles of Association

Redevelopment

• Duty of the BoD to act even in the event of imminent insolvency
• Notice of overindebtedness: tolerance period of 90 days, provided that there is a concrete prospect of reorganization
• Cancellation of the bankruptcy stay in the OR and integration into the composition proceedings SchKG

Next steps

The changes in the new stock corporation law may result in an adjustment of the Articles of Association and/or Organizational Regulations. Companies are therefore called upon to review and, if necessary, adapt these, for which a transition period has been granted until January 1, 2025.

If you have any further questions or would like to call on our assistance in reviewing the articles of incorporation and bylaws, please email our tax department.