Basically, the company law must be adapted to the current economic climate. A number of provisions found to be impracticable under the current law will be amended or repealed, as well as shareholder and minority rights.
What will be the most important changes?
· Capital regulations will be more flexible
The share capital can be denominated in the following currencies: USD, EUR, GBP, or JPY if it is essential for the business activities of the company in that currency. It is acceptable for a share to have a nominal value less than 1 cent as long as it is greater than zero. In place of the authorized capital increase, the board of directors can increase or decrease the share capital within a range using a statutory instrument called the capital band, which is valid for a maximum of five years.
· Simplified general meeting process
The general meeting will be able to be held virtually or abroad. During the Corona pandemic, the COVID 19 Ordinance 2 introduced the possibility of holding virtual general meetings, while COVID 19 Ordinance 3 extended it until the new company law entered into force. Under the new company law, if a virtual general meeting is to remain possible, however, a statutory basis must be established and, in principle, an independent representative must be elected.
The Board of Directors may also vote electronically. Moreover, the list of resolutions that require a qualified majority by law for approval at a general meeting will be extended.
· New rules for treating insolvency and over-indebtedness
The law specifically requires the board of directors to monitor solvency and initiate restructuring measures in the event of imminent insolvency. If a company is over-indebted or has a corresponding concern, the board of directors must act. Now, it is clear under which circumstances the bankruptcy court notification can be omitted when the company is over-indebted.
Amending the Articles of Association
If the Federal Council has approved the proposed revision to the Commercial Register Ordinance, the articles of association can be amended in advance with the commercial register office. There must, however, be a clear statement in the articles of association that the new provisions will only apply when the new company law takes effect.
All other amendments required to comply with the revised constitution can also be passed this year, however, it can only be registered with the commercial register office once the revised constitution has taken effect. This amendment to the articles of association must be passed by the general meeting under the condition precedent that the new company law will enter into force. The amendment to articles of association can be registered with the commercial register office as soon as the new company law becomes effective.
Nevertheless, there is no requirement to amend the articles of association before the new company law enters into force. A period of two years will be given to companies to amend any provision of their articles of association that isn’t consistent with the new law.