SWITZERLAND Law and Practice Contributed by: Mariel Hoch, Dominic Leu and Fabienne Perlini-Frehner, Bär & Karrer
10. Shareholders’ Remedies 10.1 Remedies Against the Company Shareholders can challenge resolutions of the share- holders’ meeting if they are: • null and void; or • voidable (see 2.11 Challenging a Resolution ). If the board of directors refuses a shareholders’ request for information or inspection, the requesting shareholders can apply to the court for an order to provide the information or to permit inspection. Where the board of directors fails to grant a share- holders’ request to convene a shareholders’ meeting within a reasonable time, at the most within 60 days, the requesting shareholders may request that the court orders the meeting to be convened. Shareholders representing at least 10% of the share capital or the votes can request the court to dissolve the company for good cause. Resolutions of the board of directors can only be challenged by shareholders if they are null and void (see 6.2 Challenging a Decision Taken by Directors ). Moreover, shareholders have legal remedies against the members of the board of directors (see 10.2 Rem- edies Against the Directors ). 10.2 Remedies Against the Directors Shareholders of Swiss companies may file liability actions against the directors, members of the execu- tive management or the auditors. The directors and the executive management of the company have fiduciary duties. If these fiduciary duties are breached and a damage results, the direc- tors and/or members of the executive management are liable to the company and the shareholders. If the breach of the fiduciary duty only results in a damage to the company, a shareholder is only enti- tled to bring a legal action against the respective director(s) and/or member(s) of the executive man- agement to indemnify the company. If a shareholder suffers a direct damage as a result of the breach of the
ples – ie, the relationship between shareholders, the board of directors and the executive management in appropriate form. Listed Swiss companies are there- fore obliged to publish a corporate governance report annually. The Swiss Code of Best Practice for Corporate Gov- ernance (the “Swiss Code”) primarily focuses on pub- lic corporations and contains non-binding recommen- dations and guidelines with a special focus on the rights and duties of shareholders and the board of directors. The Swiss Code requires companies that do not comply with its recommendations to provide an explanation for their non-compliance (the “comply or explain” principle). Most public companies follow the recommendations of the Swiss Code, although it constitutes soft law. There is no specific duty of a controlling company towards the shareholders of the controlled company. The only duty of all shareholders (including controlling shareholders) is to pay the issue price for their shares. However, subject to the existence of different share classes, in general all shareholders of a company must be treated equally. 9. Insolvency 9.1 Rights of Shareholders If the Company Is Insolvent Shareholders are entitled to a share of the liquida- tion proceeds in proportion to their pro rata share or depending on the rights a specific share class con- veys. However, before any shareholder receives its pro rata share of the liquidation proceeds, the creditors of the company are paid. This means that shareholders usually do not receive any liquidation proceeds in the case of an insolvency. 8. Controlling Company 8.1 Duties of a Controlling Company
264 CHAMBERS.COM
Powered by FlippingBook