The (Almost) End Of Bearer Shares In Switzerland

Author:Mr Olivier Cavadini
Profession:Charles Russell Speechlys

At its meeting on 27 September 2019, the Federal Council decided that the Federal Law on the Implementation of the Recommendations of the World Forum (the FLIRWF) would enter into force on 1 November 2019. The FLIRWF was passed by Parliament with the aim of passing the next exam of the Global Forum on Transparency and Exchange of Information for Tax Purposes. It marks the end of bearer shares, which will only remain authorised for companies with listed equity securities or if they are issued in the form of intermediated securities.

The conversion will not take place automatically when the law comes into force, but after a period of 18 months. However, companies with bearer shares would be well advised not to wait until the end of this period and to take advantage of their next amendment to the Articles of Association to convert their shares into registered shares.

Pursuant to the (existing) art. 697i of the Swiss Code of obligations, any person who acquires shares in a company whose shares are not listed on a stock exchange must give notice of the acquisition, together with their first name and surname or business name and their address to the company within one month. According to the FLIRWF, bearer shares converted into registered shares, for which no one has announced themselves, will be cancelled five years after the law comes into force. Shareholders will forfeit their rights and the cancelled shares will be replaced by the company's...

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