Abolition of Bearer Shares – November 1, 2019

Oct 30, 2019 | News

The new law affects approximately 57,000 companies. The law establishes the following main provisions: § From November 1, 2019, bearer shares will only be allowed if the company has listed securities or if the bearer shares are in the form of book-entry securities. § On May 1, 2021, bearer shares that are not allowed will be converted by law into registered shares. § Shareholders who have not fulfilled their disclosure obligation and whose shares have been converted may apply to the court within five years of the entry into force of the law for the registration of the shares in the company’s share register. The shares of shareholders who have not come forward will be canceled on November 1, 2024. § Shareholders and partners who do not disclose the beneficial owners, as well as directors and managers who do not keep the share register, the book of partners or the list of beneficial owners of shares, are punishable by a fine. § Legal entities with their head office abroad that have their effective management in Switzerland must keep a list of their owners at the place of effective management. The Federal Law of June 21, 2019, which implements the recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes, enters into force on November 1, 2019. From this date, bearer shares will only be allowed if the company has listed securities or if they are in the form of book-entry securities within the meaning of the Securities Act of October 3, 2008. At the end of the 18 months following the entry into force of Article 622 paragraph 1bis CO, i.e. on May 1, 2021, bearer shares that are not allowed will be converted by law into registered shares. The law also provides for a procedure to identify shareholders who, under current law, have not fulfilled their disclosure obligation to the company and whose shares have been converted. The procedure provides for the cancellation of unannounced shares after a period of five years from the entry into force of the law. In addition to the new criminal provisions in case of failure to disclose the beneficial owner of shares or partnership interests and violation of the corporate law obligations on the keeping of lists, the law contains a clarification of the obligation of the shareholder or partner of a limited liability company to disclose the shares or partnership interests held by the beneficial owner. According to the law, companies that do not keep the share register, the book of partners, the list of partners or the list of beneficial owners correctly and companies that create bearer shares but do not meet the conditions set by the new legal provisions may be subject to proceedings before the judge for shortcomings in the organization of the company. Main points of the law:
November 1, 2019May 1, 2021November 1, 2024October 31, 2034
Restriction of the right to create new bearer shares.
Entry into force of Art. 327a CP
Automatic conversion of non-admitted bearer shares into registered shares.Automatic cancellation of unannounced sharesExtinction of the right to compensation for shareholders without fault deprived of their rights.