The General meeting of shareholders of Swiss Stock Corporations as of 2023
The revised Swiss Corporation Law which comes into force on January 1, 2023, increases the flexibility of the board of directors with regard to organizing general meetings of shareholders. The general meeting does no longer have to be held in person – instead, general meeting of shareholders with different venues, hybrid general meetings, purely written general meetings or even completely virtual meetings are finally (and irrespective of COVID) permitted.
The following article sets out the essential aspects of the various implementation options and points out unique features.
As of 2023, a general meeting of shareholders may be held without complying with the rules on convening meetings if (i) the resolutions are passed in writing on paper or in electronic form and (ii) no shareholder requests oral deliberation.
The following options are available:
Ballot: In the case of a ballot, the shareholders receive pre-printed voting forms. They hand in the completed ballot papers within the deadline to a central office, or the send them to another address where they are counted and recorded.
Circular resolution: In the case of a circular resolution, the parties involved send the proposed result to the other shareholders with pre-prepared minutes. In contrast to the ballot, the shareholders cannot choose between several options in this procedure but may only accept the proposed result.
In case of a general meeting of shareholders held in writing, it is not necessary for all shareholders to participate contrast to a universal meeting). The requirements for the written resolution are therefore less strict than for a universal meeting.
Finally, according to the prevailing doctrine, written means that the vote is also valid if it is sent by e-mail.
Although so-called multi-local general meetings of shareholders were considered permissible under the current law, art. Art. 701a para. 3 nCO now expressly provides that a general meeting of shareholders may be held at different locations at the same time. In this case, the votes of the participants must be transmitted directly in picture and sound to all meeting locations.
This means that a general meeting of shareholders may be held at two or more venues. If the meeting venue is exclusively abroad, the articles of association must expressly provide that a general meeting of shareholders abroad is permissible (see Section III.).
A general meeting of shareholders which is only held abroad is permissible if the articles of association provide for it and the board of directors designates an independent proxy.
If a company’s shares are not listed on a stock exchange, the board of directors may abstain from appointing an independent proxy, provided that all shareholders agree to this. If the modalities for obtaining consent are not determined by the articles of association, they shall be determined by the board of directors.
The general meeting of shareholders may also be held at several meeting locations abroad or at several meeting locations in Switzerland and abroad. If the general meeting of shareholders is also held in Switzerland, it is not a general meeting of shareholders abroad pursuant to art. 701b para. 3 nCO and a statutory basis is not necessary.
The introduction of a statutory basis for holding a general meeting of shareholders abroad requires a qualified double quorum of two thirds of the votes represented and an absolute majority of the par value of the shares represented (art. 704 para. 1 item 1 nCO). The articles of association may either specify the foreign venue or authorize the board of directors to designate it.
A hybrid general meeting of shareholders is a mixture of a face-to-face and virtual meeting, i.e., a general meeting of shareholders with a physical venue takes place and shareholders can choose to participate either remotely or physically on-site. The meeting location can be in Switzerland or abroad. Shareholders who are not present at a meeting location can exercise their rights electronically.
In the latter case, the members join either by telephone or otherwise and exercise their membership rights in this manner. If all participants decide to participate electronically, the meeting is basically a virtual general meeting of shareholders.
However, as long as physical participation is possible, the general meeting of shareholders falls under Art. 701c nCO and not under Art. 701d nCO, which governs the "actual" virtual general meeting of shareholders.
A purely virtual general meeting of shareholders is held entirely in digital space without a physical venue. It is permissible if the articles of association provide for it and the Board of Directors designates an independent proxy. If the company’s shares are not listed on a stock exchange, the articles of association may provide that the appointment of an independent proxy may be waived.
To allow a company to conduct virtual general meetings of shareholders, the respective resolution must be passed with a simple majority of the share votes represented. Non-listed companies do not need to appoint an independent proxy if there is a respective article in the article of association which can be passed with a qualified double quorum of two-thirds of the votes represented and a majority of the par value of the shares represented.
In general, an invitation to a general meeting of shareholders should be sent in the form as provided for in the articles of association. The company can choose freely how the invitation should be communicated to the shareholders. It may also be purely digital.
Further, the board of directors may only summarize the agenda items in the invitation to the general meeting of shareholders if it makes further information available to the shareholders "by other means" (art. 700 para. 4 nCO). In addition, art. 699a nCO states that the annual report and the auditors' reports must be made available to shareholders at least 20 days before the general meeting of shareholders of shareholders. Within the framework of the articles of association, the board of directors is also free to decide in what form it makes the annual report and the audit reports available to shareholders. If the documents are not accessible electronically, each shareholder may request that they be sent to him. However, there is no legal entitlement to delivery of written documents, provided that electronic access is guaranteed.
When it comes to organizing general meetings of shareholders in the future, the existing articles of association should be examined in detail, particularly with regard to the following:
Amendment of the provision of the articles of association governing the form of convening a general meeting of shareholders (art. 626 para. 1 item 7 in conjunction with art. 700 CO)
Introduction of a provision in the articles of association allowing to hold a general meeting of shareholders abroad and ruling whether an independent proxy must be appointed (Art. 701b CO)
Introduction of a provision in the articles of association providing for a virtual general meeting of shareholders without a meeting place and regulating the question of whether an independent proxy must be appointed (art. 701d CO)
One last note. If someone cannot wait until 2023, the amendments to the articles of association are already possible in 2022. One just has to adhere to the publication of the Federal commercial registry.
So-called scheduled amendments to the articles of association are to be used in accordance with the instructions in Practice Note EHRA 1/22 of January 17, 2022.