Revision of the Swiss Corporate Law: Shareholders' meeting and resolutions (2/2)
Some of the amendments regarding notice, venue and form of meetings, as well as means of attendance, representation and voting, correspond with the provisions of the provisional regulations applicable during the COVID-19 pandemic.
Call, notice, agenda and motions
The annual (ordinary) shareholders' meeting shall take place within six months from the close of the business year of the company. In addition, the board of directors may call extraordinary shareholders' meetings anytime.
Shareholders representing together in the case of listed companies five percent and in the case of unlisted companies ten percent of the share capital or votes may request the board of directors to call an extraordinary shareholders' meeting. The written request shall encompass the items of the agenda requested and the respective motions. Should the board of directors fail to call the meeting within 60 days maximum, the shareholders may request the court to do it.
With regards to any shareholders' meeting, whether called by the board of directors or requested by the shareholders, shareholders representing in the case of listed companies 0.5 percent and in the case of unlisted companies five percent of the share capital or votes may request the board of directors for inclusion of (i) items on the agenda, (ii) motions to any item on the agenda, as well as (iii) a short justification of such items and motions, to be set out in the notice. Should the board of directors fail to follow such requests, the shareholders may request the court to order the board of directors to do so.
In any case, the (chairman of the) board of directors ought to give written notice to all of the shareholders at least 20 days in advance stating the date, hour, form and place of the shareholders' meeting; the agenda items; the motions of the board of directors and their short justification (the latter only in the case of listed companies); any motions of the shareholders and their short justification; the name and address of the independent proxy, if any.
During a shareholders' meeting, all of the shareholders may submit motions within the scope of the items on the agenda.
Universal shareholders' meetings and circular resolutions
A shareholders' meeting can be held – physically, hybrid or virtually (see hereafter) - without complying with the rules applicable to calling it, provided, however, that all shareholders attend the meeting (personally or by proxy) and no objection is raised by any shareholder or proxy.
Unless a shareholder or a proxy requests an oral discussion, without need for a provision in the articles of association, such a "universal" shareholders' meeting may pass resolutions also in writing (in hardcopy or electronically).
Venue inside and outside Switzerland
The board of directors determines the venue of the shareholders' meeting.
Without need for a provision in the articles of association, the meeting may be held simultaneously at different locations. In this case, the votes of the participants must be transmitted directly in sound and vision to all meeting locations.
Subject to a provision in the articles of association and the board of directors designating an independent proxy in the notice, the shareholders' meeting may also be held outside Switzerland. To assure compliance with the revCO, the same rules apply also if the meeting shall be held simultaneously at different locations, where (at least) one is outside Switzerland. In the case of unlisted companies, the independent proxy need not be appointed, provided that all shareholders agree. It should be noted that holding meetings outside Switzerland, especially on a regular basis in the same place, may trigger unwanted tax consequences, since such (foreign) place may be deemed the place of actual management of the Swiss company.
Without need for a provision in the articles of association, the board of directors may allow shareholders who are not attending a shareholders' meeting personally or by proxy to exercise their rights by electronic means. These are considered hybrid meetings.
Shareholders' meetings with a physical venue only, during which the shareholders and proxies present may vote using electronic voting devices or which are transmitted electronically without the possibility of interaction, are not considered hybrid meetings.
Subject to a provision in the articles of association and the board of directors designating an independent proxy in the notice, the shareholders' meeting may also be held by electronic means only, i.e., completely virtually, without any physical venue. In the case of unlisted companies, the independent proxy need not be appointed, provided this requirement is waived in the articles of association.
Requirements for the use of electronic means
Pursuant to the revCO, it is the duty of the board of directors to provide for rules related to the use of electronic means and to ensure that (i) the identity of all the participants is known; (ii) the comments made during the meeting are transmitted directly; (iii) each participant can submit motions and can participate to the discussion; and (iv) the result of the vote cannot be falsified.
Videoconferencing is not necessarily the only electronic means allowed. E.g., provided the identity of all the participants can be established, teleconferencing is also possible.
If technical problems, which cannot be resolved, occur during the hybrid or virtual shareholders' meeting, not allowing for a proper conduct of the meeting, the same must be adjourned to another time. This is not the case if the technical problems occur at a shareholder's premises.
The resolutions already passed by the shareholders' meeting before the technical problems occurred, however, remain valid.
Further shareholders' rights
The shareholders continue not to have any right to request from the board of directors a specific (physical, hybrid or virtual) form or a particular venue of the shareholders' meeting. The revCO only posits that the board of directors, when determining the venue, must not make it unreasonably difficult for any shareholder to exercise the rights in connection with the shareholders' meeting.
Articles of association
As we have seen, for the shareholders’ meeting to be held (exclusively or additionally) abroad as well as for it to be held virtually, the articles of association need to be amended.
Should you have any questions regarding the revCO or should you require any assistance in corporate matters, please do not hesitate to contact our specialists in Geneva, Lugano or Zurich. We would be more than happy to assist you.