The non-competition clause in a shareholders’ agreement
Introduction In public limited companies (SA/AG), the shareholder’s only obligation is to pay up the subscribed capital (art. 680 CO). Unlike the law governing limited liability companies (Sàrl/GmbH), the law governing public limited companies does not provide for the possibility of subjecting shareholders to a prohibition on competing with the company. The law only lays […]
Defects in the organization of a public limited company (art. 731b CO) – how to avoid this pitfall and/or remedy a deadlock situation
In many of Switzerland’s smaller limited companies, annual general meetings are not held on a regular basis. In fact, it is not uncommon for a general meeting not to be held for two or three consecutive years. What happens in such a case if the company’s articles of association stipulate that members of the Board […]
The transfer of capital contributions in a limited liability company and its particularities
Introduction According to data from the Swiss Federal Statistical Office, Switzerland had a total of 129,451 limited liability companies, compared with just 122,235 public limited companies (August 24, 2023). In other words, the number of limited liability companies has exceeded the number of public limited companies. It is therefore important for both lawyers and professionals […]
The general meeting by circular resolution (art. 701 para. 3 CO) under the new Swiss Company Law
1. Introduction Since the new Swiss Company Law on public limited companies came into force, Article 701 para. 3 of the Swiss Code of Obligations (“CO”) (or Art. 805 para. 5 no. 5 CO in conjunction with Art. 701 para. 3 CO for limited liability companies) provides for the possibility of holding a general meeting (but […]
Golden Shares -> a possibility under Swiss law?
1. Introduction Golden Shares were historically used by states in the 20th century to maintain control over formerly state-owned companies, in particular to prevent other states from acquiring control over these companies. Golden shares are still used in most Asian countries (notably China). This term has become generic to designate preferred shares in relation to others […]
Legal uncertainty surrounding Russian sanctions
The sanctions taken by Switzerland against Russia following the invasion of Ukraine are unprecedented in their nature and scope, and undermine certain basic principles of the rule of law. In this article, the authors are highlighting certain problems with regards to the Federal Council Ordinance enacting these sanctions that they have encountered in the course […]
Factors to be taken into account in the traditional discharge granted by the annual shareholders’ meeting to the Board of Directors
With the vast majority of Annual shareholders’ meetings being held in June in accordance with the requirements of art. 699 para. 2 of the Swiss Code of Obligations (CO), the question arises whether the traditional discharge should be granted to the members of the Board of Directors. In fact, according to art. 698 para. 2 […]
Departure of an employee who is a shareholder of the company: the good leaver/bad leaver clauses that must be provided for contractually
1. Introduction In practice, companies (start-ups, SMEs, large companies) frequently grant shares to certain employees as an incentive and with the purpose of giving them a direct share in the company’s results through the receipt of dividends. In this context, it is advisable to conclude a shareholder agreement with the employee to whom the company […]