New practice note of the Swiss Federal Commercial Registry Office – Minutes-taking of resolutions and the capital band

1.—Written Resolutions: Requirements

With the corporate law revision effective from 1 January 2023, the shareholders’ meeting of a corporation (Ltd) may pass resolutions in writing. While no statutory basis is required for written resolutions, all shareholders must consent to pass the resolution in writing. However, unanimity is not necessary for material resolutions passed in writing like (interim) dividend resolutions or the election of board members in writing; an absolute or, where applicable, qualified majority is sufficient. The same applies to written resolutions of the quotaholders’ meeting in a limited liability company (LLC).

2.—Minutes of written resolutions: Compliance and Best Practice

The board or the management, as the highest governing body, is responsible for recording written resolutions and verifying their validity. The board or the management shall keep a record of the results of the written resolution in a so-called acknowledgement protocol. The acknowledgement protocol shall document when voting documents were distributed and the final voting day as well as the date of the resolution. As the date of the resolution, for example, the final voting day or the day of counting or recording can be stated. However, the absence of this information may not be criticised by the commercial register since it is not relevant for entry in the commercial register. The acknowledgement protocol must be signed by the chairperson of the board and a secretary. An acknowledgement protocol preserves the anonymity of shareholders, as the names and voting behaviour of individual shareholders are not recorded. The practice of the FCRO is therefore to be welcomed.

Circular resolutions are distinct from the acknowledgement protocol. In the case of a circular resolution, the resolution document is circulated among the shareholders, who express their consent by signing the resolution. A circular resolution of the shareholders’ meeting must be signed by all shareholders, either by hand or with a qualified electronic signature. The signed circular resolution can be submitted as evidence to the commercial register. For corporations, an additional declaration from the board is required confirming that the circular resolution was signed by all shareholders and that the resolution became valid on date X. To maintain anonymity of shareholders, we recommend using the acknowledgement protocol instead of circular resolutions when submitting a resolution to the commercial register.

Depending on cantonal certification law, resolutions requiring public certification can generally not be passed in writing. We therefore recommend consulting the notary in advance to determine the content of the resolution as well as the method of passing resolutions requiring certification.

3.—Virtual shareholders’ meetings

Virtual shareholders’ meetings permissible only with a statutory basis. Additionally, an independent proxy must be appointed, unless the articles of association provide for the possibility of waiving the appointment of an independent proxy. The FCRO emphasizes that the competent commercial register will check for a statutory basis and will object to the resolution if such a statutory provision is missing. This case the shareholders’ meeting has to be repeated. For many corporation lacking a statutory basis, conducting a so-called hybrid shareholders’ meeting, which can be held without an explicit statutory basis, is a viable alternative.

4.—Minutes of virtual shareholders’ meeting: Compliance and Best Practice

The recording of virtual shareholders’ meeting resolutions must follow the same regulations as for a physical shareholders’ meeting. Therefore, the minutes must include the information required by article 702 of the Swiss Code of Obligations (CO). The minutes must be signed by the chairperson and the secretary. These signatures may be provided either with a qualified electronic signature or in handwriting on separate pages. The cantonal certification law applies to public deeds concerning resolutions of the virtual shareholders’ meeting. The public deed only needs to include the details specified in article 702 CO (such as the start and end time and the type of shareholders’ meeting) and the signatures of the chairperson and secretary if required by cantonal certification law or if the public deed shall replace corporate minutes according to article 702 CO.

5.—Creation and increase of participation capital within the capital band

The FCRO emphasizes that the capital band must explicitly authorize the board to create a participation capital if the shareholders’ meeting intends to grant this power to the board within the capital band. If a corporation already has a participation capital, the capital band must clearly indicate whether the board is authorized to increase or decrease the share and/or participation capital. It is possible to set up a capital band solely for the increase of participation capital, or vice versa. Note that a capital band that, for example, only authorizes the issuance of participation certificates grants shareholders a subscription right to these certificates (article 656g para. 2 CO).

6.—Relationship between the capital band and the ordinary increase of the participation capital

The FCRO clarifies that an ordinary increase of the participation capital by the shareholders’ meeting does not result in the dissolution of the capital band, provided that the board is only authorized to increase the share capital within the capital band. This principle also applies conversely. This clarification is valuable for legal certainty and enhances structuring options for equity financing in corporations.

7.—Determination of the percentage of paid-in capital for capital increases within the capital band

The FCRO holds that the percentage of paid-in capital required for capital increases within the capital band must be determined by the shareholders’ meeting. Despite the lack of a legal basis, the FCRO recommends including the percentage of paid-in capital in the capital band provisions. However, the competent commercial register may not object the registration of a capital band without this information. In case the capital band does not provide for the percentage of paid-in capital, the board must determine the percentage of paid-in capital.

We hope this comprehensive guide helps you navigate the latest FCRO clarifications on Swiss corporate law. For further assistance or personalized advice, please don’t hesitate to contact our expert team. We’re here to support your business needs with tailored solutions.