The (almost) End of Bearer Shares in Switzerland
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 own shares. In this connection the FLIRWF also provides for fines for shareholders and companies, which omit to disclose the beneficial owners or to hold a register of shareholders and of beneficial owners.
Finally, it is worth noting the FLIRWF brought a modification to the Federal Law on the Tax Administrative Assistance, according to which, if a legal entity whose main office is located abroad has its effective administration in Switzerland, it must keep a list of its holders at the place of its effective administration. This list must contain either the first name and surname (or the company name and address) of these persons.
Companies should also take this opportunity to check where the issued shares are stored and the arrangements surrounding the issuance of those shares. It happens too often, in the context of a merger or acquisition or in a succession context, that clients are unable to locate original share certificates. This can lead to concerns about title and any subsequent valid transfer of such shares.
Our thinking
Pei Li Kew
Pei Li Kew writes for Pharmacy Business on the link between pharmacy and IP
Pei Li Kew writes for Pharmacy Business on the link between pharmacy and IP
Michael Wells-Greco
Same-sex marriage in Switzerland: financial considerations and parentage
Swiss law on same-sex marriage will come into force on 1 July 2022.
Mark Howard
Charles Russell Speechlys advises Acora on its acquisition of Secrutiny
Charles Russell Speechlys advises Acora on its acquisition of Secrutiny
Nick White
Charles Russell Speechlys advises Symphony Holdings Limited on the sale of its PONY trade mark portfolio for USD $28 million
Charles Russell Speechlys advises Symphony Holdings Limited on the sale of its PONY trade mark portfolio for USD $28 million.
Simon Ridpath
Simon Ridpath featured in the Lawyer’s Hot 100 list
Simon Ridpath features in The Lawyer’s Hot 100 list
Mark Howard
Charles Russell Speechlys advises Europa Oil & Gas (Holdings) plc on its £7m equity fundraising
Europa Oil and Gas is a renewable energy, oil and gas development and production company.
Simon Green
International Bar Association quote Simon Green on the future of the legal sector in Hong Kong
International Bar Association quote Simon Green on the future of Hong Kong's legal sector
Bart Peerless
The Lawyer reports on the Firm's promotion announcement
The Lawyer reports on the Firm's promotion announcement
Bart Peerless
Charles Russell Speechlys promotes six to Partner
Charles Russell Speechlys promotes six to Partner
Lesley O’Leary
Briefing publishes Lesley O’Leary 's comments on hybrid working and the impact on collaboration
Briefing publishes Lesley O’Leary 's comments on hybrid working and the impact on collaboration
Sophie Hart
Key Considerations for a Swiss Executor Dealing with UK Assets
What should a Swiss based executor dealing with assets in the UK be thinking about?
Dharshi Wijetunga
Do Economic Substance rules apply to PTCs?
The potential application of economic substance laws to private trust company structures, and do economic substance rules apply to PTCs?
Patrick Chan
Corporate Treasurer publishes Patrick Chan's comments regarding the No Consent Regime
Corporate Treasurer publishes Patrick Chan's comments on the No Consent Regime
Jamie Cartwright
Jamie Cartwright comments on the potential impact of the plastic packaging tax
Jamie Cartwright comments on the potential impact of the plastic packaging tax
Helen Coward
Helen Coward quoted in Construction News on residential developer tax
Helen Coward quoted in Construction News on residential developer tax
Rebecca Burford
Charles Russell Speechlys partners with the Crafty Counsel community
Crafty Counsel brings together in-house legal professionals to share their experiences.
Jonathan Morley
International Business Reports reported on the firm’s involvement advising Battery Ventures on the sale of Forterro to Partners Group for €1 billion
The firm has advised global, technology-focused investment firm Battery Ventures on the sale of Forterro to Partners Group for €1 billion.
David Hicks
David Hicks quoted by FT Adviser on why Succession sold up to Aviva
David Hicks explains that private equity backers have a time horizon for their investments.
Sarah Wigington
How will the new Economic Crime Levy impact residential development joint ventures?
The Economic Crime (Transparency and Enforcement) Bill is being created through Parliament this month.
Mark Howard
Public Company Update: Winter 2021
Welcome to the Winter 2021 Public Company Update.