On 1 July 2015, new company law provisions took effect in Switzerland, designed to ensure greater transparency by legal entities, their shareholders and beneficial owners.
The regulations apply to private joint-stock companies, limited liability companies and cooperatives, but – in accordance with the Federal Act on Intermediated Securities – it is not applicable to shares in the form of book-entry securities.
The changes follow recommendations from the international Financial Action Task Force on Money Laundering to prevent the misuse of bearer shares. Anyone acquiring bearer shares must disclose their identity to the company within one month, and provide proof that they are in possession of the shares.
In addition, companies’ articles of association may no longer specify a higher quorum than is required by law for the conversion of bearer shares to registered shares. There is now an obligation to report the name of the beneficial owner when the acquisition of registered or bearer shares results in a holding that makes up at least 25% of the share capital or voting rights of a company. The purchaser is also required to report within one month.
Failure to comply will result in suspension, or even forfeiture, of certain shareholders’ rights. Shareholders who already held bearer shares before the law took effect have been granted six months to comply.
Companies are required to maintain a register containing certain details relating to the bearer shareholders and beneficial owners. The information will not be made public, but must be accessible at any time to companies’ local representatives.
EY contact: Urs Wolf