The Corona pandemic and the lockdown in spring 2020 helped Swiss stock corporations modernize their stock corporation law at an early stage: by means of a Covid ordinance, the Federal Council has also enabled shareholders to exercise their rights in electronic form. As a result, he introduced an instrument at an early stage which should be introduced with the reform of stock corporation law, which had already been negotiated in Parliament for several years and finally passed in June 2020: the online general meeting. In the following sections, we want to show the main features of the new forms of participation in general meetings and explain the influence of the Covid measures until the new stock corporation law comes into force.
Stock corporation law goes digital
The holding of online general meetings (AGM) was fraught with considerable legal uncertainties before the introduction of the — time-limited — Covid measures. The revision of company law decided by Parliament will now put an end to this ambiguity. It aims to improve corporate governance even in unlisted companies and to modernize the AGM by approving electronic means.
In addition to the conventional general meeting with physical participation, the revised stock corporation law provides for the following three new variants of the general meeting:
- virtual general meeting without a meeting place,
- hybrid general meeting (general meeting with a physical meeting place and the option of virtual participation)
- Circular resolution (written or electronic)
The new forms of general assembly
Virtual general meetings without a meeting place
From now on, the General Assembly can be held exclusively by electronic means and without a venue. However, this requires that the statutes explicitly provide for the possibility of a virtual general meeting. In addition, the articles of association of unlisted companies may dispense with the designation of an independent proxy. For most joint stock companies, both require a corresponding resolution of the General Assembly and an amendment to the articles of association.
In the case of a virtual general meeting, the correct exercise of shareholder rights and in particular the possibility of voting or changing them during the AGM as well as undistorted voting results must be ensured. This requires, among other things, that the identity of the participants is established.
Hybrid general meeting
Shareholders who are not present at the general meeting can exercise their rights electronically. In this case, the Board of Directors must regulate the use of electronic means and ensure that the identity of the participants is established, that the votes in the General Assembly are transmitted directly, that every participant can submit motions and participate in the discussion. In particular, the shareholder should be able to pass his resolution during the AGM as a result of the discussion and to cast his vote during - and not just before - the AGM, regardless of whether he is participating physically or electronically. Finally, the result of the vote must not be falsified.
General Assembly Decisions Circularly
The new stock corporation law then provides for a new form of universal assembly. At the Universal Assembly, a general meeting is held without compliance with the regulations applicable to the convocation (e.g. the convocation period), unless any of the shareholders objects to this. Until now, however, universal meetings also had to be held physically or through mandate and instruction from a proxy. Resolutions can now be made in writing or in electronic form, unless a shareholder or his representative requests oral advice.
Entry into force
The revised stock corporation law is not expected to come into force until 2023. As mentioned at the beginning, however, the special measures to combat Covid-19 have enabled the forms of participation and decision-making in GVs described above. Parliament has now enshrined in the Covid-19 Act its extension until the revised stock corporation law comes into force, but until December 31, 2023 at the latest. This provision is not affected by the referendum against the Covid-19 Act, which should pave the way for the continuation of the virtual, hybrid and circular AGM.
And why Konsento?
At Konsento, we have decided to offer you a platform to hold general meetings electronically and online in accordance with the law. You can also digitally manage and organize your stocks, investments, and communications.
The points mentioned in this blog post are only a very brief excerpt from the changes in the Code of Obligations, which will come into force with the revised stock corporation law. However, users of the Konsento platform enjoy the convenience of not having to deal with the legal details. Our platform is designed in such a way that it takes into account key requirements of stock corporation law — especially when it comes to holding your virtual, hybrid or circular general meeting. Our legal and financial experts build know-how into the platform so that you can save yourself time and expensive consulting fees. You can also save time by using our platform to log information about stocks, resolutions, election results, etc.
Would you like to find out more about this topic without obligation or have we made you curious about what else our platform offers? Then write to us either via our contact form or via hello@konsento.ch — we are delighted!