Corona-Pandemic (COVID-19) and General Meetings
Questions and answers in relation to COVID-19 in Switzerland
My company plans its annual general meeting. Are general meetings affected by the Swiss measures to prevent the spread of coronavirus?
In order to contain the spread of SARS-CoV-2, the Swiss Federal Council enacted several ordinances which account for certain measures, also concerning general meetings, respectively more generally (private and public) events. With effect as of 17 February 2022, such measures have, however, been lifted. It is thus possible to hold meetings with the physical presence of shareholders again, even in case of a large shareholder base. Still, the provisions rendering it possible to hold generally meetings without the physical presence of shareholders remain in place for the time being.
Can my company nevertheless hold its general meeting?
As mentioned above, holding meetings with the physical presence of shareholders is possible again.
In addition, article 8 of the COVID-19 Act entitles the Federal Council to provide that general meetings can continue to be held without the physical presence of shareholders. On that basis, the Federal Council enacted article 27 of the COVID-19-Ordinance 3 of 19 June 2020 (COVID-Ordinance 3), rendering it possible to hold general meetings in writing, electronic form or by way of an independent proxy. These rules have not been repealed with the lifting of the restrictions on events.
Currently, companies have thus two options (until the end of 2022):
- Hold their general meetings physically; or
- Use one of the procedures introduced by article 27 of the COVID-19-Ordinance 3.
What procedure must be followed according to article 27 of the COVID-19-Ordinance 3?
Article 27 of the COVID-19-Ordinance 3 provides that the shareholders must be able to make use of their rights at the general meeting either in writing or in electronic form or by way of an independent proxy designated by the company. The company has to inform its shareholders of the procedure to be followed at the latest four days prior to the general meeting.
It is generally also possible to hold a general meeting pursuant to this procedure if (parts of) the agenda items require notarization. The details should, however, be clarified with the notary in charge in advance.
Is there a risk that resolutions of a general meeting held according to the procedure pursuant to article 27 of the COVID-19-Ordinance 3 can be challenged?
There is a certain risk that such resolutions can be challenged. Shareholders could, for example, argue that their right of information or their right to put forward motions within certain agenda items has been violated. This risk can be reduced if shareholders have the possibility to participate in the general meeting, for example via a chat function (see next question).
What practical recommendations can you give me/my company?
In order not to limit the rights of shareholder, companies can again hold their meetings physically.
However, if companies want to (continue to) hold their meetings by electronic means, we recommended that companies provide for a mechanism, such as a chat function, to enable shareholders to ask questions, present their arguments and submit motions on the agenda items. In addition, ideally every statement made by a shareholder should also be made available to the other participating shareholders.
Moreover, we recommend to adhere to the time limits and means of communication provided for in the Swiss Code of Obligations and the articles of association (in particular the 20 days' invitation period) also when notifying the shareholders that a general meeting will be held according to article 27 of the COVID-19-Ordinance 3, even if this article provides for the possibility to notify the shareholders accordingly only 4 days prior to the general meeting, either in writing or by electronic means (e.g. email).
This article was written by CMS partner Alain Raemy, LL.M. and associate Dr Matthias Kuert, LL.M. and was first published on CMS Law-Now on 18 February 2022 available here
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.