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The crux of the beneficial owner register – tightening up

13 January 2020

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Since 1 July 2015, purchasers of shares have been subject to reporting requirements defined by the Swiss Code of Obligations. Notification must be made to the issuing company of anyone who acquires registered shares of a non-listed company and thereby reaches or exceeds 25% of the share capital or votes.

The notification must include the full name and address of the beneficial owner of the acquired shares and must be submitted within one month of acquisition. If this notification is not made in time or is omitted completely, the consequences include all shareholder rights being suspended during the notification period, i.e. the shareholder cannot exercise voting rights and no dividends are paid. If the notification period expires, the dividend right is forfeited in full.

The company is obliged to maintain a register of the beneficial owners of the company. This register can be combined with the share register.

In addition to the end of bearer shares detailed in our July 2019 update here, the provisions concerning reporting obligations for beneficial owners will also be further tightened. Breach of the duty to report beneficial owners at shareholder level and breach of the responsibilities to keep share registers and register of beneficial owners at company level will now also be subject to fines. Furthermore, the company may be investigated due to lack of organisation and, in the worst case, forced deregistration by the court.

Based on the existing and amended provisions, the above-mentioned reporting obligations apply to those who:

  • directly or indirectly hold the majority of the voting rights;
  • directly or indirectly have the right to elect or remove the majority of the members of the board; or
  • are enabled with a controlling influence over the shareholder stated in the articles of the association, the deed of incorporation and/or an agreement.

If no such person is in existence, the shareholder must submit a corresponding message to the company confirming that no such person controls the shareholder base.

If the shareholder is a listed joint-stock company, or if such a company has overall control, or if the shareholder owns a listed company, then this fact must be reported accordingly, along with the name and registered office of the listed company. These rules apply not only to limited companies but also to limited liability companies and have been in effect as of 1 November 2019.