Posts tagged "Commercial Register Ordinance"

Flexible Regulations with the New Company Law after January 2023

On 2 February 2022, the Federal Council adopted changes to the Code of Obligations (OR) and its Commercial Register Ordinance (HRegV). From 1 January 2023, the upcoming legislation will apply and enable Swiss companies to be more flexible and adopt various innovations. The following are a few examples.

Foreign exchange capital

In the past, the share capital had to be in Swiss francs. As of now, foreign currencies can be used for business activities. Accepted currency types are Swiss francs CHF, British pounds GBP, Euros EUR, US-Dollars USD, and Japanese yen JPY.

It is relevant for all sides of corporate law, such as starting a company, increasing and decreasing its capital, allocating profits (dividends/reserves), assessing loss of capital/over-indebtedness, etc. Taxable profits must be converted into Swiss Francs.

In advance of the next fiscal year or retroactively, the General Assembly can decide on a change in currency.

Shares used to have a nominal value of at least one centime; now, all that is needed is that the value is greater than zero.

Introducing the Capital Band

Capital bands allow for more flexibility in calculating capital increases and decreases, and the General Assembly can add a corresponding article to the articles of association. Over half of the share capital registered in the Commercial Register can either exceed or fall below the capital band.

It replaces the current “approved capital increase” with a quasi-“approved capital decrease.”

Capital increases and decreases innovations

The amended law simplified the ordinary capital decreases. The Swiss Official Gazette of Commerce may now publish only one call to creditors instead of three previously. Furthermore, creditors have to request indemnification within 30 days (instead of 60 days previously).

Following the resolution of the General Assembly, the Board of Directors has six more months to implement it. The Commercial Register entry no longer determines compliance with this deadline.

Interim dividends

Dividends can now be directly decided by the General Assembly based on interim financial statements. Auditors generally audit annual financial statements. There are exceptions: when the Company waives the limited audit (opting-out) or, all shareholders agree to the payment of the interim dividend. No claims of creditors are affected by this payment.

Claim of arbitration

Swiss Arbitral tribunals can now judge disputes over corporate law if their basis is in the articles of association of a company. There has been controversy over whether a company can specify arbitration clauses for its Articles of Association and thus bind all shareholders.

Virtual General Assembly

Various modernizations are made to the General Assembly’s preparation and execution of the revised law. This will be the first time that the Swiss General Assembly can be held virtually, using electronic means. Swiss Code of Obligations now explicitly outlines this option. In addition to electronic voting, shareholders are also able to participate in circular voting even if they cannot attend.

Articles of incorporation

The acquisition of assets during the establishment or capital increase is no longer a qualified fact. As a result, it no longer has to be mentioned in the articles of association or accompanied by an audit report. In addition, it does not require publication in the Commercial Register.

Articles of association of Swiss companies will be able to be modernized under new legislation from 1 January 2023. The upcoming changes include establishing a capital band and holding a virtual General Assembly.