Revision of the law on public limited companies from 2023. The most important changes.
Tue, 20.09.2022, 08:00
What can you expect from the revision of the law on public limited companies in 2023 or what should you look out for if you want to incorporate a public limited company or a limited liability company from 2023? This article informs you about the most important changes of this extensive revision, so that you can prepare yourself in the best possible way.
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Share capital now also in foreign currencies
The new law on limited liability companies harmonizes the provisions on the currency of share capital with those on the presentation of accounts. With the revision of Corporate Law, a company may not only present its (annual) accounts in a foreign currency, but also its share capital, which may be denominated in a foreign currency for its business activities. The Federal Council has determined the following permitted foreign currencies: The euro, the US dollar, the pound sterling and the Japanese yen.
Those who wish to change their currency may do so at the beginning of each financial year. To do so, a decision of the general meeting or of the partners by a qualified majority and an amendment to the articles of association are required.
Minimum nominal value of shares and units
Under the current law, the nominal value of a share must be at least 1 cent (Ltd.) and that of a share at least CHF 100 (LLC). As the need for a share split or a reduction in nominal value may also exist for shares and corporate units with the minimum nominal value, the new Stock Corporation Law only prescribes that the nominal value of a share or a corporate unit must be greater than zero Swiss francs. Fractions of centimes are therefore also permitted. In order to adjust the nominal value of the shares, a resolution of the general meeting and an amendment to the articles of association are required.
More flexible capital rules
The revision of the law on public limited companies introduces a new legal institution: the capital strip. In future, the board of directors (Ltd.) or the directors (LLC) may be authorized to increase and reduce the share capital in a flexible manner within a fixed framework for a maximum of five years. However, it is not permitted to fall below the minimum capital prescribed per company form, even with the capital margin.
In order to use the flexibility of the capital buffer for your company, you must define the authorization granted to the board of directors or the directors in the company's articles of association and have the decision entered in the commercial register. If you also want to authorize the board of directors or the directors to reduce the capital, you must at least have the annual accounts of your company audited in a limited way. Capital reductions are therefore only permitted within the capital band if the limited audit of the annual accounts has not
been waived.
Simplified rules for the acquisition of assets
The (intended) acquisition of assets, i.e. the acquisition of assets in the context of a foundation or capital increase from persons close to the company, will in future no longer be regarded as a qualifying event. Thus, according to the new law, it will no longer be necessary to draw up foundation/increase in capital reports and audit certificates for such cases. The requirement for entries in the articles of association and in the
commercial register is also abolished.
The reason for foundations qualifying for an asset takeover is capital protection: it must not be possible to redistribute the funds contributed at the time of the foundation or capital increase to persons close to you by paying excessive prices for assets. The new legal situation does not change this. A number of other safeguards are maintained. The provisions on contributions in kind cannot be circumvented; if there is a clear disproportion between the performance and the consideration, reimbursement can be demanded; organs or other participants who have acted negligently or collusively can be held personally liable for damage.
Interim closing and dividend
The legal basis for the General Meeting to decide on the payment of an interim dividend has been created. In principle, an audited interim balance sheet is required for this purpose; however, the audit can be waived in the event of an opting-out and with the agreement of all shareholders, provided that this does not jeopardize the rights of creditors.
More flexible general or shareholders' meeting & board or directors meetings
The new law also modernizes the provisions on decision-making. It is now possible to hold a virtual or hybrid general or shareholders' meeting and to hold it at several locations or abroad. In order to be able to hold a virtual general meeting or a general meeting abroad, you have to provide for this in your articles of association. In the case of a universal meeting, decisions can now be taken electronically. A general meeting by circular is also permitted under the new law, provided that no shareholder or partner requests an oral discussion.
The board of directors or the directors may also use electronic means of communication. Decisions can thus be taken electronically and without a meeting place. A signature is not required for electronic decision-making.
Need for action
From the entry into force of the revision of the law on public limited companies on 1 January 2023, you have two years to adapt your company's articles of association and bylaws to the provisions of the new law and to amend any provisions that are no longer permitted. If you do not do so, all provisions that are not compatible with the new law will lapse (on 1 January 2025).
Some of the new features of the law on public limited companies, such as the creation of a capital band or the holding of a virtual AGM or an AGM abroad, must be included in the articles of association before they can be used. On the other hand, certain mandatory contents of the articles of association under the old law no longer need to be included in the articles of association, as they are directly derived from the law (e.g. the convening of the AGM, the shareholders' right to vote or the appointment of organs).
We will be pleased to help you prepare your articles of association in time for the entry into force of the new law.
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