Their end was unavoidable. Following a recent legislative amendment which entered into force on November 1st, 2019, the Swiss Parliament has put an end to the possibility of holding a company through bearer shares. The change is significant, as it concerns more than 55'000 companies located in Switzerland.
If you are a stakeholder in one of the 55'000 Swiss companies concerned, then please feel free to contact us for a first free assessment of your immediate next steps. In simple cases, we will be happy to refer you directly to a competent notary public who will support you with the conversion; in more complex cases, we will set out a high-level step plan, tailor-made to your needs, and provide you with a fee quote for you to decide whether we can be your legal partner of choice throughout the conversion process.
According to the new provisions, bearer shares will no longer be permitted. There are two exceptions to this rule:
If the company has publicly traded equity securities; or If the bearer shares are issued in the form of book-entry securities (i.e. securities registered in an account deposited with a custodian). Given the substantial impact that this change brings for Swiss companies, the latter will benefit from a transition period of 18 months to convert bearer shares to registered shares. The transition period will expire on May 1st, 2021.
The Swiss legislator has also strengthened the obligation to report the beneficial owner. In fact, the notification requirement already came into effect on July 1st, 2015 and applies to bearer shares as well as registered shares. For registered shares, the notification obligation is triggered the moment a shareholder holds, alone or in concert with third parties, 25% of the share capital or voting rights of a company. If the shareholder does not comply, the economic rights connected to the shares are suspended.
From November 1st, 2019, the legislator has decided to penalize, by means of a fine of up to CHF 10'000, the violation of the obligation to announce the beneficial owner of registered shares. Companies that have established the share register or the register of beneficial owners in an improper manner may also be affected by the fine.
Failure to comply with the new corporate laws can have significant consequences for companies and shareholders.
In fact, if they fail to convert bearer shares to registered shares by the transitional period fixed by...