LALIVE Newsflash: New Swiss Shareholder Transparency Law26 June 2015
On 1 July 2015 new shareholder transparency rules will enter into force in Switzerland. The law implements the 2012 Financial Action Task Force (FATF) recommendations on shareholder and beneficial owner transparency.
Under the amended Code of obligations, non-listed Swiss companies limited by shares must keep a register of all bearer shareholders (if the company issued bearer shares) as well as a register of all beneficial owners with a controlling quota of 25% of more (regardless of whether the shares are registered or issued to bearer). New shareholders are obliged to report to the company within 30 days any acquisition of bearer shares as well as their reaching of or exceeding a quota of 25% of the nominal capital or the voting rights of the company. The reporting duties also apply to pre-existing shareholders. The rules on beneficial ownership transparency also apply to quota holders of non-listed Swiss limited liability companies.
Non-compliance with new disclosure obligations has severe consequences: the participation rights attached to the shares/quotas are suspended until the disclosure obligations are fulfilled. Pecuniary rights are forfeited if the disclosure obligation is not fulfilled within one month after the acquisition. With respect to the pecuniary rights of pre-existing bearer shareholders, a transition period until 31 December 2015 applies. The board of directors (respectively the general manager in case of a limited liability partnership) must ascertain that no unreported shareholder exercises his rights as a shareholder. The exercise of suspended participation and forfeited pecuniary rights entails significant risks: shareholder meeting resolutions can be challenged in court, annual accounts are materially wrong and establishing them may qualify as criminal conduct (forgery of documents), board members can be sued for damages if they fail to prevent unreported shareholders from exercising shareholder rights.
We hope the above information will be of use and remain available for any assistance required in implementing these new legal requirements.
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