Legally compliant share transfer in Switzerland: What you need to know

Introduction

During the life cycle of most Swiss stock companies, there are occasional changes in the composition of owners. The legally compliant transfer of shares and ownership of them represents a central part of the purchase and sale of unlisted securities. However, this process is subject to certain legal requirements in order to make the transfer of ownership clear, legally effective and secure. In this blog, we explain why a declaration of assignment (assignment) is essential, what requirements it imposes and how you can avoid mistakes when transferring shares.

Table of contents

1. Legal basis of share transfer
2. The importance of cession in transfer
3. Formal requirements for a valid declaration of assignment
4. Risks associated with a lack of documentation
5. Consento: Electronic share register for legally compliant transactions
6. conclusion

Legal basis of share transfer

The transfer of shares issued as value rights takes place in two stages under Swiss law:

1. Commitment transaction: This is the sales contract or other agreement that forms the basis for the transfer. The commitment transaction is formless, i.e. can also be made orally, although a share purchase agreement is regularly concluded.
2. Disposal transaction: This is implemented by a written declaration of assignment (also known as assignment), which legally transfers ownership of the shares. There are therefore strict and indispensable formal requirements, which we present in more detail below.

The importance of cession in transfer

The cession is at the heart of the transfer of ownership of shares. It ensures that the claim — in this case the rights to the shares — is correctly transferred. Without a valid assignment, the transfer of ownership remains incomplete, which can lead to legal uncertainties and potential conflicts.

Formal requirements for a valid declaration of assignment

For a declaration of assignment to be legally effective, the following criteria must be met:

• written form: The declaration of assignment must be recorded and signed in writing.
• Precise description of the claim: The shares to be assigned and the issuer must be clearly identified or identifiable.
• Desire to assign: The assignor (seller) must clearly explain his will to transfer.
• Signing of assignor: Only the seller is required to sign. The signature of the assignee (buyer) is not required. The seller's signature must either handwritten on paper or by Qualified electronic signature (QES) be done on a PDF document. However, notarization by a notary is not necessary.
• Party information: The names and addresses of the assignor and assignee should be provided to ensure the identity of the parties.
• dating: The date of transfer should be recorded in order to clearly document the chronological order of several sellers of the same share.

Risks associated with a lack of documentation

If a declaration of assignment (assignment) under Swiss law has not been prepared or can no longer be found, there are serious consequences:

Effects on the buyer

• No legal property: Without assignment, the buyer does not acquire legal ownership of the shares.
• Restrictions on shareholder rights:
  • No legal entry in the share register
  • No entitlement to dividends
  • No right to liquidation or sale proceeds
  • No valid exercise of voting rights at general meetings

Effects on the public limited company

• Incomplete chain of owners: Without complete documentation, the joint stock company cannot prove a complete chain of owners. This leads to legal and operational problems.
• Risks associated with sales revenues: The original seller remains the legal owner and could make claims later, particularly if the share value rises.
• Due diligence and exit issues: Professional investors check the complete documentation of the chain of owners. If even one assignment is missing, this can prevent investments or the sale of the joint stock company and thus block an exit.
• Contestable general meeting resolutions: Resolutions in which shareholders not legally registered in the share register took part are subject to appeal. This jeopardizes society's legal certainty and ability to act.

Missing or defective statements of assignment have far-reaching consequences. They prevent the lawful acquisition of ownership, damage shareholder rights, lead to uncertainties in general meeting resolutions and can prevent a company from leaving. Careful documentation is of paramount importance for everyone involved.

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Konsento: Electronic share register for legally compliant transactions

Accurate recording of stock transactions

Konsento offers you a modern, electronic share register that helps you to process share transactions in accordance with the law. When entering transactions, the system reminds you that a transfer requires a declaration of assignment. In addition, Konsento provides you with a template for a legally compliant declaration of assignment.

Ensuring seamless owner chains

You can attach complete and correctly signed statements of assignment directly to the respective transaction in the Konsento share register. In this way, the documentation of your company's share transfers remains complete and legally secure. This is critical because a faulty or incomplete chain of ownership poses a significant risk to the public company.

Subsequent preparation of statements of assignment

Another highlight: Konsento allows you to carry out evaluations of gaps in the ownership chain and, if necessary, to automatically create statements of assignment from the share and trade register afterwards. Hundreds of documents can thus be generated at the push of a button — efficiently and legally compliant. Should there still be gaps afterwards, Konsento, in cooperation with partner law firms, will support you with further consulting and technical services to restore a seamless chain of ownership as efficiently and effectively as possible.

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Conclusion

Missing or defective statements of assignment have far-reaching consequences. They prevent the lawful acquisition of ownership, damage shareholder rights, lead to uncertainty in decisions taken at general meetings and can block a company's exit.

With Konsento, you can meet these challenges. Our electronic share register not only provides you with legally compliant tools for creating and documenting statements of assignment, but also helps you to ensure a seamless chain of ownership. Automated processes, reminder functions and templates ensure that all formal requirements are met. This gives you and your joint stock company legal certainty and increases attractiveness for investors.

Register now for Konsento's free share register and check whether the chain of ownership of your company is seamless and legally compliant. Or if you have any questions, contact us directly for a non-binding private conversation.

Contact us now for a non-binding consultation

REGISTER NOW FOR THE FREE SHARE REGISTER

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