On January 1, 2023, the revised corporate law entered into force. It provided for both a welcomed modernization and clean-up of Swiss corporate law (see our previous Smart Insights). The revised law granted the companies a two-year adjustment period to align their articles of association and other regulations to the revised law by end of 2024. This update summarizes some important practical and legal considerations that require attention of any privately held company after the expiration of the transitional period:
- Articles of association and other corporate regulations: While
most of the public companies listed on SIX Swiss Exchange aligned
their articles of association to the provisions of the revised law
at their 2023 AGM, privately held companies were less stringent and
have taken considerably more time to implement the necessary
changes. If the articles of association and/or other regulations
(in particular the organizational regulations) of a privately held
company still contain provisions that contradict the revised law,
those provisions ceased to be applicable by the end of 2024. Since
January 1, 2025, such provisions are no longer valid and have been
automatically replaced by the provisions of the revised law.
Furthermore, the new features introduced by the revised law, such
as for example the ability to hold virtual shareholders'
meetings or the option to denominate the share capital in a foreign
currency, need to be incorporated into the articles of association
if a company intends to utilize them. Privately held companies
should therefore prioritize updating their articles of association
at their next shareholders'meeting. This update should address
any provisions that contradict the revised law and, if desired,
incorporate the new features provided by the revised law
The revised law allows not only virtual shareholders' meeting but also virtual board meetings and the adaption of board resolutions through electronic means. As long as all board members agree with a virtual meeting or the adaption of a board resolution through electronic means, the respective meeting or resolution, as applicable, is valid even if the articles of association or organizational regulations do not explicitly provide for virtual meetings or electronic resolutions (as long as they do not explicitly exclude it). However, it is recommended to update the articles of association and/or the organizational regulations to explicitly include provisions for holding virtual board meetings and passing resolutions electronically. - Capital band: The revised law replaced the concept of
authorized capital by the capital band. The capital band needs to
be introduced by the shareholders'meeting and grants the board
of directors the authority to increase or reduce the share capital
within upper and lower limits set by the shareholders' meeting.
During the transition period, the previous provisions of the law
continued to apply to authorized capital that was introduced before
January 1, 2023. However, as the authorization to issue shares from
the authorized capital was limited to a maximum of two years under
the old framework, companies can now no longer rely on it.
With the expiration of the two-year validity for authorized capital, companies wishing to authorize their board of directors to adjust the share capital must now implement a capital band in their articles of association. Furthermore, companies that have already introduced a capital band should verify its validity and, if necessary, consider including the renewal of the capital band in the agenda of the next shareholders' meeting.
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.
