Company Law Reform
The Swiss Federal Council is pursuing a modernisation of Swiss company law. On 23 November 2016, it submitted its message to Parliament.
The Swiss Federal Council is pursuing a modernisation of Swiss company law. On 23 November 2016, it submitted its message to Parliament.
The reform was adopted by both parliamentary chambers on 19 July 2020.
Key Highlights of the Reform
Integration of VegüV into Company Law
Sign-on bonuses are now permissible if they compensate for the loss of claims against a former employer.
Compensation for non-compete clauses is allowed up to the average of the employee’s compensation over the past three financial years.
Prospective approval of variable compensation remains permitted, but a non-binding (consultative) vote on the compensation report in the following year is required.
Greater Flexibility in Capital Structure
Nominal value of shares can now be less than one Swiss centime
Companies may now denominate share capital in a foreign currency
The “authorized capital increase” is replaced by a capital band of ±50% of the registered capital, allowing the board to adjust capital within five years
Interim Dividends
Strengthened Minority Shareholder Rights
Threshold for requesting an extraordinary general meeting reduced to 5% of share capital or voting rights (from 10%)
Right to add items to the agenda:
0.5% for listed companies
5% for private companies (instead of 10% or shares with nominal value of CHF 1 million)
Introduction of a quorum requirement for delisting:
Two-thirds of represented votes and
Majority of represented capital must approve
Digital Modernisation of General Meetings
Articles of association can now permit digital or virtual general meetings
General meetings may now also be held abroad, provided this is foreseen in the articles
Confidentiality of Proxy Instructions
The independent proxy may only inform the board of directors about received instructions three working days before the general meeting at the earliest
Corporate Recovery Measures
Boards of directors are now legally obliged to monitor a company’s liquidity and act accordingly in case of financial distress.
Gender Representation Targets
For large listed companies, new benchmarks apply:
At least 30% of board members should be women
At least 20% of executive committee members should be women
If the targets are not met, companies must explain why in their compensation report and outline steps for improvement.
Transparency for Raw Materials Companies
Companies active in the extraction of raw materials must disclose payments to government authorities.
The exact date of entry into force of the company law reform has not yet been announced. It is generally assumed that implementation will not take place before the second half of 2021.