It will soon be that time again – the end of the current financial year is accompanied by the planning of the Annual General Meeting. According to Law, Swiss companies limited by shares must hold this general meeting within six months of the close of business year. Companies often use this opportunity to make changes to their articles of association. Any change to the articles of association is subject to approval by the general meeting of shareholders and must be publicly certified. In this article, we explain why you should subject the articles of association of your SME to a (total) revision in the course of the next ordinary general meeting.
I. DLT Law Amendments: Issue of ledger-based securities pursuant to Art. 973d et seq. nOR
The Swiss Federal Council recognized the potential of the new DLT technologies early on and set itself the goal of further developing Switzerland as a leading financial center and innovative location for fintech and blockchain companies. Combating abuse and creating legal certainty are of elementary importance for this. The ""Adaptations of Federal Law to Developments in Distributed Ledger Technology"" were adopted this year by the Swiss Parliament without any dissenting votes. Parliament has thus sent out a strong signal. Already on February 1, 2021, the adaptations of the Swiss Code of Obligations (""CO"") in nArt. 973d et seq. will come into force.
With the amendments to the law, there will also be a novelty in securities law with the introduction of the so-called ledger-based security (Art. 973d ff. nOR). This will introduce a new category in addition to the traditional forms of securities, the security according to Art. 965 CO and the uncertificated security according to 973c CO, and, following the creation of intermediated securities, a further step will be taken towards the dematerialization of the share. With the ledger-based security, an electronic or digital registration of uncertificated securities in a so-called securities ledger will be possible in the future. This means that uncertificated securities such as shares can be digitally securitized, asserted and transferred exclusively via the securities ledger without the need for an intermediary.
The advantages of issuing shares in the form of ledger-based securities are manifold, but lie in particular in the simplification of corporate housekeeping: as each transfer of digitally mapped shares is always recorded in the securities ledger in a timely and unalterable manner, the share register can be updated automatically. The tokenization of shares will also make it possible in the future to trigger dividend payments directly via so-called smart contract functionalities.
The issue of uncertificated securities pursuant to Art. 973c and of ledger-based securities pursuant to nArt. 973d CO requires an authorization in the Articles of Association pursuant to nArt. 622 CO.
II. Implementation of virtual general meetings
The revision of Swiss Company Law has been under discussion for more than a decade - and with it the introduction of the fully virtual general meeting. Although it is already possible today for shareholders of listed Swiss companies limited by shares to vote electronically at the general meeting via so-called ""indirect voting"", there is still no legal basis for holding virtual general meetings. Among other things, the current draft for the revision of the company law addresses and fills this gap. The implementation of virtual general meetings in accordance with the new provisions on companies limited by shares (Art. 701d et seq. E-OR) will also require a mandatory basis in the Articles of Association.
According to prevailing doctrine and practice, virtual participation in the General Meeting is already possible today (so-called ""Internet General Meeting""). However, for this to be valid, at least some of the shareholders must actually be physically present at the designated venue and the physically present and electronically participating shareholders must always be able to interact with each other on an equal footing during the general meeting, i.e. simultaneously and without delay (""physical-equivalent participation possibility"").
Contrary to countless other areas, the Corona crisis, which has given a real boost to the digitization of corporate law processes, has exceptionally ensured acceleration and progress here: Art. 27 para. 1 lit. a of COVID-19 Regulation 3 then permits the holding of company meetings ""in electronic form"".
In order to be ""ready to go"" in the future, i.e. after the revision of Company Law has come into force, it is advisable to include a generic formulation for holding virtual general meetings already today. If you are planning to amend the Articles of Association anyway, you should include this authorization at the same time.
III. Implementation via the daura platform
daura is a prospering start-up founded by Swisscom AG and Dr. Luka Müller (MME). The young company has developed a digital platform for issuing digitized shares: Thanks to DLT, share registers can be digitized quite easily and capital increases can be handled quickly and cheaply at the push of a button. Recently, virtual general meetings can also be processed via daura, whereby shareholders can exercise their voting rights without any time delay. Investors registered on daura also gain access to a whole world of investments in Swiss SMEs. daura is a joint venture between the established and innovative Swiss partners Swisscom, SIX, Sygnum, Luka Müller (MME) and Christian Wenger (Wenger & Vieli).
