In June 2019 the Swiss government adopted the Federal Act (The Act) that will put an end to Swiss companies and enterprises being able to issue Bearer Shares.
The Act is in line with the recommendations put forth by the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Before The Act was adopted, Swiss firms were able to issue Bearer Shares. Anyone who acquired these shares were required to report the acquisition to the company within one month and the identity of the beneficial owner was to be disclosed (if the Bearer Shares reached the 25% threshold of share capital or voting rights) with names added to a register to be kept by the company for 10 years. This followed a Federal Act passed in 2015 aimed at fighting money laundering.
Thanks to the passage of The Act, from January 1, 2020 no Swiss company will be able to issue Bearer Shares. There will be a ‘grace’ period from January 2020 to July 1, 2022, after which firms who had previously been able to issue Bearer Shares will be required to redraft the articles of association to remove their ability to issue such shares.
As these articles of association are being redrafted, any Bearer Shares should be converted to registered shares with the names of the registered shareholders recorded in the company’s shareholder register. Voting rights, nominal value and other particulars of the shares will remain the same.
Should a holder of Bearer Shares not comply with their duties with regards to The Act, they will lose their financial and voting rights. A shareholder that has not provided the required information will not be registered in the shareholder register and must apply for registration in court within five years from July 1, 2022. Failure to comply with The Act may lead to fines.
Companies that have securities listed on a stock exchange or have issued intermediated securities are not subject to the consequences of The Act, though they should inform the commercial register before the July 1, 2022 deadline.
For more information and advice contact the Alpadis Group Swiss office here