Stock Corporation Law Revision enhances Shareholder Rights
An Overview of the Impact of the Stock Corporation Law Revision
Significant amendments to Swiss stock corporation law have been implemented at the beginning of 2023. In the following post, we highlight the most important changes from the perspective of the shareholders of non-listed companies. It should be noted that the regulations for shareholders in listed companies may vary from some of the rules outlined below.
Strengthening of Shareholders' Rights
- The threshold for shareholders of private companies to convene an extraordinary meeting remains at 10% of the voting rights. However, the alternative threshold of one million in nominal value has been replaced by 10% of the share capital.
- The threshold for placing items on the agenda and submitting motions has been reduced to 5% of voting rights and share capital.
- Shareholders holding a minimum of 10% of the shares or voting rights in private companies now have the right to raise questions to the Board of Directors outside of shareholders' meetings. The board is required to respond within four months. Previously, shareholders were only allowed to ask questions during shareholders' meetings.
- Shareholders holding at least 5% of the share capital or voting rights have the right to access the company's books for the exercise of their shareholder rights, taking into account the company's legitimate confidentiality interests.
- The requirements for lawsuits against shareholders, directors, and managers for the repayment of unduly received benefits have been simplified. Claims can now be filed against members of the management and individuals associated with shareholders, directors, and managers. The financial condition of the company no longer affects the outcome.
Modernization of Shareholders' Meetings
The revised stock corporation law aims to enhance the flexibility in organizing shareholders' meetings and promote the active participation of shareholders.
- Shareholders' meetings can now be conducted exclusively through electronic means and without physical venue (virtual meetings), if so provided in the Articles of Association.
- Moreover, shareholders have the option to remotely participate in a physical general meeting through electronic means and exercise their voting rights. A statutory basis is not necessary for this.
- Shareholders' meetings can also be held simultaneously at different locations or outside of Switzerland, provided such arrangements are permitted in the Articles of Association, shareholders' rights are not unduly restricted, and an independent voting proxy is appointed.
- Shareholders' meetings may also be conducted in writing, such as through circular resolutions.
Conclusion
In conclusion, the revision of Swiss stock corporation law has significantly strengthened shareholders' rights in unlisted companies. These changes include lower thresholds for convening meetings and submitting motions, expanded opportunities for shareholders to raise questions and access company information, simplified requirements for lawsuits, and greater flexibility in organizing shareholders' meetings. These revisions aim to empower shareholders, promote transparency, and enhance their overall participation in corporate decision-making processes.
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