Revision of stock corporation law

On June 19, 2020, after years of preparatory work, the Swiss Parliament passed the “major” revision of company law.

The aim of the revision of company law was and is to implement the “rip-off” initiative at the legislative level (by transferring the Ordinance against Excessive Compensation in Listed Companies Limited by Shares (VegüV) to the Swiss Code of Obligations). In addition, company law is to be modernized while retaining its core principles and adapted to economic needs and contemporary circumstances.

The revision brings major and minor changes in almost all areas of company law: share capital, shareholder rights, the General Meeting, reorganization law, remuneration and corporate governance. Notable changes in detail are, for example:

• The current authorized capital increase will be replaced by the so-called capital band. The Board of Directors can increase or reduce the capital within a range of +50% or -50% of the registered share capital within a maximum of 5 years.
• The rights of minority shareholders will be extended by lowering the thresholds for exercising shareholder rights. The delisting of shares now requires the approval of the General Meeting.
• In future, the Annual General Meeting can be held virtually and at several venues, including abroad. Resolutions of the General Meeting may be passed in writing or electronically.
• In future, large listed companies should fill more management positions with women. Specifically, a new benchmark of 30 % women on the Board of Directors and 20 % women on the Executive Board applies. If these benchmarks are not met, the company is obliged to state the reasons in the remuneration report and explain the measures taken to improve the situation (“comply or explain” rule)

The first provisions on gender representation and disclosure requirements for commodity companies as well as the revised provisions of the Commercial Register Act already came into force on January 1, 2021. The other amendments in connection with the revision of company law are expected to come into force in 2022, but in the second half of 2021 at the earliest.

Swiss stock corporations, limited liability companies and cooperatives are advised to review their articles of association and internal regulations promptly in order to ensure compliance with the new provisions and to benefit from the greater flexibility and the new instruments.

We will be happy to advise you in detail on the changes to Swiss company law and support you in adapting your articles of association and internal regulations to the new law, taking into account the applicable transitional provisions.