As a reminder, since 1 November 2019, unlisted companies or companies that do not take the form of intermediated securities are prohibited from issuing new bearer shares, as stated by The Federal Act on the Implementation of Recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purposes.
Existing bearer shares must be converted into registered shares, at the shareholders' initiative, by 30 April 2021 at the latest.
The conversion procedure requires an amendment to the articles of association to be approved by the general meeting, which requires the involvement of a notary. Bearer share certificates will be recovered and cancelled. The Board of Directors is then required to register the holders of these shares as registered shareholders in the shareholders' register; this presupposes that the shareholders have notified each other in advance in accordance with Article 697i of the Swiss Code of Obligations.
Automatic conversion of bearer shares from May 1, 2021
If the companies have not taken the necessary steps before the cut-off date, bearer shares will be automatically converted into registered shares as of May 1, 2021. The companies are not exempt from having to adapt their articles of association accordingly. Failing this, any amendment to the articles of association will be rejected.
Companies whose shares have been automatically converted are therefore recommended to update their articles of association at the next meeting.
Suspension of shareholders' rights not announced in due time
Shareholders holding bearer shares are required to register with the company in order to continue to benefit from their corporate and property rights.
Shareholders who have not registered by 30 April 2021, have until 31 October 2024 to apply for entry in the register, and thus the reactivation of their rights, by judicial means only. They will have to obtain the company's approval and prove their status as shareholders.
After this deadline, their shares will be cancelled. Shareholders who have been deprived of their rights through no fault of their own may claim compensation from the company until 31 October 2034.
Interested in knowing more? Get in contact with us today to properly approach the upcoming deadlines or contact our experts of Fidinam Genève!
This article has been extracted by Fidinam Genève Newsletter. Read here the full issue