Reporting Duties of Shareholders and Beneficial Owners under LETA

Introduction

The Federal Act on the Transparency of Legal Entities (LETA) significantly changes corporate governance in Switzerland. Not only companies themselves, but also the individuals behind shareholdings are central to the new disclosure duties. Anyone holding shares, units or cooperative interests – or benefiting economically from them – must actively contribute to fulfilling the legal transparency requirements.

These duties are not merely formal. Without active cooperation from the persons involved, companies cannot fulfil their own identification and reporting obligations. Transparency can only arise if all participants take responsibility. This creates new legal and organisational pressure for companies, shareholders, and beneficial owners.

Table of contents

1. Who qualifies as a holder of company interests?
2. Who is considered a beneficial owner?
3. Why must shareholders and beneficial owners cooperate?
4. Disclosure duties of shareholding individuals
5. Disclosure duties of beneficial owners
6. Sanctions: fines up to CHF 500,000 and prosecution
7. Conclusion

Who qualifies as a holder of company interests?

Holders of company interests include:

• shareholders of a corporation (AG)
• members of a limited liability company (GmbH)
• cooperative members
• entrepreneur shareholders of a SICAV
• holders of interests in any other legal entity subject to LETA, including foreign legal entities

They constitute the level of legal ownership. Reporting obligations are directly linked to their status as holders – regardless of whether they are economically entitled or act as nominees.

Who is considered a beneficial owner?

The beneficial owner is the natural person who ultimately controls a company by holding at least 25% of the capital or voting rights, who controls it in another manner (Art. 4 LETA), and who ultimately receives the main economic benefit.

Control may be exercised directly or indirectly, alone or together with others.

Typically, the beneficial owner is the person who:

• controls voting rights or capital interests
• exercises de facto control through contractual arrangements
• is the principal behind a nominee shareholder

For SICAVs, a beneficial owner is any natural person who directly or indirectly holds at least 25% of the compartment or otherwise controls the SICAV (Art. 5 LETA).

If no person meets the criteria, the highest member of the governing body is deemed the beneficial owner. What matters is not formal ownership but actual control and economic entitlement.

Why must shareholders and beneficial owners cooperate?

According to the Federal Council’s Message on LETA (pp. 99–101), although companies hold primary responsibility for identifying and reporting beneficial owners, they can only comply if shareholders and beneficial owners actively participate.

Three reasons support this:

First

Only the holders themselves know whether they act on their own behalf or on behalf of someone else. Structures such as nominee arrangements or voting agreements are often invisible to the company.

Second

Beneficial owners, by definition, lie “behind” the visible ownership structure. Without their own information, companies cannot identify or verify them.

Third

Changes often occur outside the company’s sphere of influence: sales of shares, nominee arrangements, or shifts in control. To maintain transparency, such changes must be reported immediately — as required by LETA.

Disclosure duties of shareholding individuals

Anyone whose holding grants ultimate control over the company must, under Art. 13 LETA, report the beneficial owner. This report includes:

• name and first name
• date of birth
• nationality
• address and country of residence
• required information on the nature and extent of control

Upon request, the holder must provide any documents needed to verify the beneficial owner’s identity and status.

For listed companies, simplified reporting (registered office and listing details) is sufficient.

A key challenge is the duty to spontaneously report any change (Art. 13 para. 5 LETA), including:

• changes in the beneficial owner’s name or address
• replacement of the beneficial owner (e.g. due to changes in nominee arrangements)
• changes in ownership or economic entitlement

Changes must be reported within one month after becoming aware of them.

Disclosure duties of beneficial owners

To enable companies and holders to fulfil their reporting obligations, beneficial owners themselves have independent duties (Art. 14 LETA), including:

• spontaneously providing all information required for identification
• reporting any change in personal data or control position within one month
• directly informing the company if control is exercised through a chain of entities

They must also provide documents necessary to verify their identity and status.

This means their role is no longer passive: beneficial owners become integral elements of the new transparency framework.

Sanctions: fines up to CHF 500,000 and prosecution

LETA provides for strict sanctions:

• fines up to CHF 500,000 for intentional violations (Art. 43 LETA)
• administrative criminal procedures (Art. 45 LETA)
• seven-year limitation period
• possible court proceedings before the Federal Criminal Court

The message is clear:
ignoring these duties poses significant legal and financial risks.

Conclusion

LETA imposes obligations not only on companies but also on individuals holding interests or benefiting economically from them. The Federal Council emphasises that transparent ownership structures can only arise through active cooperation of all parties.

In practice, companies will face the challenge of reminding holders and beneficial owners of their duties in a timely manner and ensuring that deadlines and formal requirements are met. Another challenge lies in coordinating the various flows of information. This requires companies — particularly those with more than just a few shareholders or beneficial owners — to establish clear processes.

Konsento operates a legally compliant digital share register with dedicated access for companies, shareholders and beneficial owners. Shareholders can be integrated into the beneficial owner identification process when registering or transferring shares, ensuring correct reporting for the transparency register and relieving companies of administrative effort.

LETA is expected to enter into force in Q4 2026 and provides surprisingly short transition periods. Companies — regardless of their size — should document their ownership structures as early as possible to ensure timely reporting and avoid severe consequences.

Register your company now for Konsento’s smart digital share register, free for up to 150 shareholders.