New Swiss Law and its Impact on a Company’s Articles
The new law on corporations contains a certain number of modifications whereby companies organized under the laws of Switzerland are required to update their articles of association within a time frame of two years, namely until 31 December 2024. The new law aims at (i) making the rules on creation and capital more flexible, and (ii) allowing the share capital to be issued in a foreign currency (typically EUR, GBP or USD). We note that, beyond the legal obligation, the modifications set out in the new law are opportunities allowing companies to benefit from legal and technological evolutions and companies wishing to benefit from these evolutions will need to reflect them in their articles of association in order for them to be valid. If companies do not wish to adopt any of these evolutions, they should still be aware of performing a formal check to ensure that no provision of its articles is in contradiction with the contents of the new law).
Key changes and requirements
The key changes are as follows:
Possibility to hold the General Meeting in an electronic form (virtual meeting) and simultaneously in different locations in Switzerland and abroad;
Possibility to hold a General Meeting by way of circulated correspondence (in written form, i.e. on paper or in electronic form) instead of holding an in-person meeting;
The Board of Directors will also be able to take its decisions in electronic form (telephone or videoconference, in addition to in-person meetings and decisions taken in writing);
The share capital may be now denominated in certain foreign currencies (the Swiss Federal Council allows denomination in USD, EUR, GBP and JPY);
Interim dividends are now permitted;
Introduction of a capital-band: the Board of Directors may increase or reduce the capital within a bandwidth of 50% of the nominal share capital registered in the Register of commerce at the time the authorization is made.
Adopted by the Parliament in June 2020, the new law came into force on 1st January 2023. Companies whose articles of association and internal regulations do not comply with the new provisions are required to adapt them by 31 December 2024. In particular, they will have to make these changes in order to be able to benefit from some of the key changes (such as virtual General Meetings or capital-band). Regarding action items, companies should be aware of performing a review of the articles of association and proposing amendments where appropriate. Amendments of articles of association are decided by the General Meeting of the company, to be held by public deed in front of a notary.
How can we help?
Computershare Governance Services can support with the initial review of your articles and the adaption to comply with the new requirements through our dedicated team of governance professionals. This new requirement reiterates the important need for good international governance and our team would be glad to discuss how we can work with you to meet all requirements. Companies should consider proceeding in the coming months and not waiting until the last minute in 2024.
Contact
Please contact your dedicated Computershare Relationship Manager or send an email to globalentityservices@computershare.com for more information about how Computershare may assist you in responding to these new requirements.
This notice is provided by Computershare for general informational purposes only and is not intended and should not be construed as legal, regulatory, financial or tax advice. Computershare is not licensed or authorized to practice law in any jurisdictions and hence does not provide any legal advice and it does not hold itself out as doing so. Neither Computershare nor any of its affiliates or contributors accept any responsibility or liability for the quality, accuracy or completeness of any information contained in this notice. It is important that you seek independent professional advice relating to the subject matter of this notice before relying on it.