SWITZERLAND Law and Practice Contributed by: Beda Kaufmann, Alexander von Jeinsen, Daniel Raun and Laurent Riedweg, Advestra
4. Corporate Governance and Disclosure/Reporting 4.1 Corporate Governance Framework Private Companies As mentioned in 3.1 Transaction Structures , the two most commonly used legal entity forms for private companies of a certain size are the company limited by shares and the limited liability company. Generally, both legal entity forms are available and suitable for FDI and – apart from the publicity of share transfers in limited liability companies – the selection for a par - ticular vehicle is typically driven by tax considerations. Public Companies Public companies are almost exclusively established as companies limited by shares, which typically have only one share class. However, a limited number of Swiss public companies have issued different share classes, allowing a separation of economic ownership and voting rights to a certain degree. The Swiss corporate governance framework is based on three main pillars. • First, the Swiss Code of Obligations sets out the legal framework for legal entities, including cor - porate bodies and their roles, shareholder rights and obligations and a minimum set of financial and other reporting obligations, which include manda - tory reporting on non-financial topics (such as envi - ronmental, social and labour matters, as well as on human rights) for certain companies. • Second, the Swiss Code of Best Practice for Cor - porate Governance, which has been established by economiesuisse (the largest umbrella organi - sation representing Swiss businesses), sets out non-binding recommendations for good corporate standards for Swiss listed companies on a comply- or-explain basis. • Third, the Directive on Information Relating to Cor - porate Governance (DCG) of SIX Swiss Exchange is binding on all companies whose equity securities have their primary listing on SIX Swiss Exchange. The DCG requires issuers to make certain key information relating to corporate governance avail - able to investors in an appropriate form. The DCG also follows a comply-or-explain approach, mean -
ing that issuers have to give specific reasons when certain information is not disclosed. 4.2 Relationship Between Companies and Minority Investors Generally, for Swiss companies limited by shares and limited liability companies, which are the two most common legal entity forms for companies of a certain size (see 3.1 Transaction Structures ), there are no particular laws/rules governing their relationship with minority investors. However, certain minority interests are protected by the Swiss Code of Obligations and/ or the relevant company’s articles of association by requiring a qualified majority to pass certain important resolutions (eg, the introduction of shares with pref - erential voting rights or restrictions or cancellations of the subscription right) or granting certain share - holder rights already at a percentage of voting rights below 50%. Notably, the Swiss corporate law reform that came into force on 1 January 2023 strengthened minority rights by expanding the list of matters requir - ing a qualified majority and lowering the applicable thresholds to exercise many shareholder rights, such as the right to request that a shareholders’ meeting be called or to request the inclusion of an item on the agenda. Given that statutory minority protection rights are mostly limited to information and participation rights, it is common in cases of minority investments in pri - vate companies for the investors to enter into a share - holder agreement setting out additional minority rights (eg, board representation or veto rights) on a contrac - tual basis. Minority investors are subject to the reporting obliga - tions for beneficial owners, which kick in at 25% of the voting rights for private companies and 3% of the voting rights for public companies. For further details, see 4.3 Disclosure and Reporting Obligations . 4.3 Disclosure and Reporting Obligations Given that Switzerland has yet to adopt a general FDI regime, there are no generally applicable disclosure obligations for FDI. For further details, see 7. Foreign Investment/National Security .
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