Effect of the new stock corporation law on articles of association of stock corporations
The revision of stock corporation law contains numerous adjustments which also affect commercial register law. As a result of the necessary adjustments to the commercial register act, the articles of association of stock corporations must be updated in order to take advantage of the new legal provisions and not suffer any disadvantages due to outdated structures.
In particular, the following provisions must now be included in the statutes:
- Currency of the share capital
- Possibility of creating a capital band
- Authorization of the Board of Directors to hold a virtual General Meeting
- General Meeting abroad
In contrast, the following previously mandatory provisions, for example, no longer need to be included in the articles of association, as they result directly from the law:
- Convocation of the Annual General Meeting and the voting rights of shareholders
- Naming of the bodies for administration and audit
Why companies should start planning today
The commercial register act provides companies with a short period of time to implement amendments to articles of association and regulations. Thus, these must be revised within two years after the new commercial register act enters into force, i.e. by 31 December 2024 at the latest. Should companies refrain from adjusting during this period, provisions of the articles of association and bylaws that are incompatible with the new law will cease to apply without further notice on 31 December 2024. This means that these provisions no longer form a valid basis for the company to support its actions. Since a resolution of the General Meeting is required to amend the articles of association, a general revision of the articles of association during the ordinary General Meetings in 2023 or 2024 is a suitable option, unless the company wishes to benefit from certain innovations before then.
Of greater importance in practice is the new provision that (intended) acquisitions of assets by related parties (Sachübernahmen) after incorporation or capital increase from 1 January 2023 no longer have to be mentioned in the articles of association as a qualified fact and also no longer appear in the company's extract from the commercial register. Together with the relief that founder's reports and audit confirmations are no longer required for (intended) acquisitions in assets by related parties (Sachübernahmen), it is incumbent on companies to plan precisely whether corresponding transactions can only be carried out after the revision of the stock corporation law has come into force.
In addition to the already existing option of keeping the accounts in a foreign currency, in the future the share capital can also be denominated in one of the following four foreign currencies: USD, EUR, GBP, JPY. Group companies can thus now also state their capital in the currency relevant to the group.
What can already be done today
To take advantage of new opportunities offered by the revision of the stock corporation law immediately after its entry into force, the Swiss Federal Commercial Registry Office (EHRA) specified in its practice note EHRA 1/22 of 17 January 2022, under which conditions amendments to the articles of association can already be adopted today with a view to the future law. Considering the principle of the prohibition of anticipation of future law, the following constellations are conceivable:
a) Scheduled amendment to the articles of association
In case of facts that are not subject to publication requirements - i.e. facts that are not listed in the company's extract from the commercial register (e.g. virtual General Meeting) - amendments to the articles of association can be adopted by the General Meeting on a scheduled basis. This means that the relevant provisions of the articles of association will automatically come into force as of 1 January 2023, and will replace existing provisions of the articles of association, if any. According to the EHRA, for example, a formulation such as the following is conceivable for a scheduled resolution to amend the articles of association:
"As of the entry into force of the new stock corporation law of June 19, 2020, presumably as of 1 January 2023, the following shall apply: [New provision of the articles of association]."
The scheduled amendments to the articles of association can be filed with the commercial register as soon as the revised commercial register act has been passed by the Federal Council.
b) Conditional amendment of the Articles of Association
Amendments to the articles of association which relate to facts requiring publication (e.g. the introduction of a capital band or the change of the share capital to a foreign currency) can also be resolved by the General Meeting already today, but on condition that the revision of the stock corporation law enters into force.
The conditional amendments to the articles of association can be filed with the commercial register as soon as the revised stock corporation law enters into force. Registrations submitted prior to the entry into force of the revised stock corporation law will be returned by the commercial register.
MME's corporate law team will be happy to advise you on all issues relating to the implementation of the revised stock corporation law and the revised commercial register act.
We look forward to hearing from you.
