Swiss Company Law. Lukas Handschin

Transcription

1 Lukas Handschin Dr. iur., Attorney at Law Professor at the University of Basel Swiss Company Law The book is a translation of «Gesellschaftsrecht in a nutshell» by Lukas Handschin, lawyer in Zurich and Professor at the University of Basel. The translation was done in collaboration with Cecilia Subido, lawyer, LLM (University of Melbourne).

2 Preface Index Abbreviations III V XIX Part 1: Basics 1 1. Legal basis 1 2. Terms and definitions Corporation or foundation Partnership vs. legal person /legal entity? Relation to third parties: can acompany acquire rights and incur liabilities? Partnership or capital company? Internal and external relationships Commercial enterprise Company name Domicile, statute and nationality 6 3. The possible company forms Society Foundation Simple partnership General Partnership Limited Partnership Corporation Corporation with unlimited partners Limited liability company (LLC) Cooperative 12 Part 2: Set up Setting up the company Society Foundation Simple partnership 16 V

3 5. General partnership /limited partnership Corporation Founders partnership Incorporation /deed ofincorporation Subscription of shares and contributions 20 a) Basics 20 b) Money contribution 20 c) Contribution in kind 20 d) Contribution by set off The articles of incorporation Founders report Entry in the Commercial Register Acquisition of the status ofalegal entity Corporation with unlimited partners Limited liability company (LLC) Cooperative Minimum number of members Constitutive meeting Founders report /contribution in kind Articles of incorporation Registration inthe Commercial Register 26 Part 3: Financial Relationships Accounting Basics, purpose of accounting Obligation to keep and preserve books for commercial enterprises Generally accepted accounting principles (GAAP) Profit and loss statement Balance sheet Annex Annual report Valuation principles Application of the accounting rules to the various company forms 32 VI

4 2. Financial situation Legal persons (society, foundation, corporation, corporation with unlimited partners, LLC, cooperative) Partnerships (simple partnership, general partnership, limited partnership) 33 a) Basics 33 b) Contribution of assets by the partners Equity and its protection Term /Definition Society Foundation Partnerships Corporation 37 a) Amount 37 b) Share capital and participation capital 37 c) Function and protection of equity Limited liability company (LLC) 38 a) Amount 38 b) Function and protection of the company capital Cooperative Change of equity, reduction of the company s assets General remarks, terms and definitions 39 a) Capital increase 39 b) Capital reduction, reduction of the company s assets 39 c) Criminal law aspects Society Foundation Partnerships Corporation 41 a) Capital increase 41 aa) Basics 41 bb) Ordinary increase of share capital 42 cc) Authorized increase of capital 43 dd) Common rules for ordinary and authorized capital increase 43 ee) Capital increase subject to acondition 45 VII

5 b) Capital reduction 46 aa) Basics 46 bb) Capital reduction as partial liquidation 47 cc) Capital reduction as part of financial restructuring 47 dd) Form Limited liability company (LLC) 49 a) Increase of company capital 49 b) Capital reduction Cooperative 50 Part 4: Internal relationships Internal and external relations ofthe company Basics Decision-making Basics 53 a) Allocation of competences between management and assembly of members 53 b) Appointment of the managing members/directors Society 55 a) Basics 55 b) Assembly ofmembers 55 c) Management /executive committee 56 d) Revocation of managing competences Foundation Simple partnership /general partnership /limited partnership 57 a) Basics 57 b) Assembly of partners /partnership resolutions 58 c) Management 58 d) Revocation of management competences 59 e) Specific rules for the limited partnership Corporation 60 a) Basics 60 b) General assembly of shareholders 60 aa) Competences 60 VIII

6 bb) Calling ofthe general assembly of shareholders 60 cc) Voting rules 61 dd) Representation of the shareholder at the general assembly of shareholders 64 ee) Unauthorized attendance 65 ff) Participation of members of the board of gg) directors 65 Challenging resolutions ofthe general assembly of shareholders 65 c) Management (board of directors) 66 aa) Constitution 66 bb) Term of office 66 cc) Resolutions of the board of directors 66 dd) Duties of the board of directors 67 ee) Delegation of the management toinferior bodies 68 ff) Revocation of management competence Corporation with unlimited partners 68 a) Basics 68 b) Assembly of shareholders 68 c) Board of directors 69 d) Auditing board 69 e) Revocation of management competences Limited liability company (LLC) 70 a) Basics 70 b) Members meeting 70 aa) Competences 70 bb) Calling of the members meeting 71 cc) Resolutions 72 c) Management 74 d) Revocation of management competences Cooperative 75 a) Basics 75 b) General meeting ofmembers 75 c) Administration 76 d) Revocation of managing competences 77 IX

7 3. Inspection and control rights of the non-managing members, annual report and financial statement Basics Society Foundation Simple partnership /General partnership Limited partnership Corporation 78 a) Notification ofbusiness report 78 b) Right to information and inspection 79 c) Special audit 79 aa) Right to initiate aspecial audit 79 bb) Approval of the general assembly of shareholders 79 cc) Disapproval of the general assembly of shareholders 80 dd) Appointment of the special auditor 80 ee) Activity report of the special auditor 80 ff) Communication ofthe special auditor s report Corporation with unlimited partners Limited liability company (LLC) 81 a) Notification ofbusiness report 81 b) Right of information and inspection Cooperative Auditor Basics Categories ofauditors Society Foundations Corporation 84 a) Ordinary audit 84 aa) Basics 84 bb) Execution of the ordinary audit 85 cc) Independence ofthe auditor 86 b) Limited audit 86 aa) Basics 86 bb) Execution of the limited audit 86 X

8 cc) Waiver of the audit 87 c) Audit liability Limited liability company (LLC) Cooperative Optional audit Profit participation Basics Society Foundation Simple partnership Generaland limitedpartnership Corporation Corporation with unlimited partners Limited liability company (LLC) Cooperative Right to keep status, voting right, preemptive right Basics Society Foundation Partnerships Corporation Corporation with unlimited partners Limited liability company (LLC) Cooperative Loss participation, obligations to contribute Basics Society Foundation Simple partnership Generaland limitedpartnership Corporation Corporation with unlimited partners Limited liability company (LLC) 100 a) Supplementary financial contributions 100 b) Other contributions 100 c) Assent tothe obligation for supplementary contributions 101 XI

9 7.9 Cooperative Loyalty Basics Society Simple partnership Generaland limitedpartnership Corporation Corporation with limited partners Limited liability company (LLC) Cooperative Change of members Basics Society 105 a) Admission 105 b) Resignation /expulsion 105 c) Change of members Foundation Partnerships 106 a) Admission after formation of the partnership 106 b) Resignation 106 c) Change of members 107 d) Vesting ofmembership rights Corporation 108 a) Admission after establishment of the corporation 108 b) Resignation /Expulsion 108 c) Change of members 108 aa) Bearer shares 108 bb) Registered shares 108 d) Vesting ofshareholder rights 110 e) Participation certificates Corporation with unlimited partners Limited liability company (LLC) 111 a) Admission after formation of the LLC 111 b) Resignation /Expulsion 111 c) Change of members 112 d) Certificate of shares not asecurity 112 XII

10 9.8 Cooperative 112 a) Admission after formation of the Cooperative 112 b) Resignation /Expulsion 113 c) Transfer of membership 113 d) Vesting of membership rights 113 Part. 5: External Relations Company name General principles oncompany names 115 a) Basics 115 b) Law governing company names 116 aa) Deceptive company names 116 bb) Geographic terms as part of acompany name 117 cc) Obligation to use the company name Society Foundation Simple partnership General partnership Limited partnership Corporation /limited liability company / cooperative Corporation with unlimited partners Representation and action of the company towards third parties Basics Simple partnership Common rules for the general and limited partnership, the corporation, the corporation with unlimited partners, the LLC, the foundation, the society, and the cooperative 122 a) Basics 122 b) Acting through corporate bodies 123 aa) Basics 123 bb) Representation authority of the corporate bodies 123 cc) Optional constitution of the corporate body 124 XIII

11 dd) Diverging company rules for the representation power to conclude agreements 124 c) Other representatives 125 d) Self-conclusion Liability of the managing and non-managing members Basics Society Foundation Simple partnership Generaland limitedpartnership Corporation 131 a) Basics 131 b) Obligation to contribute to subscribed shares 131 c) Directors liability 132 aa) Basics 132 bb) Violation of duties 132 cc) Effect of aresolution of release (discharge) 133 dd) Intent or negligence 133 d) Organisational rules 133 e) Enforcing the directors liability 134 aa) Basics 134 bb) Persons entitled toclaim the directors liability outside of the bankruptcy proceedings 134 cc) Filing by ashareholder of aresponsibility suit against the directors 134 dd) Claims in case of bankruptcy 135 f) Piercing the corporate veil Corporation with unlimited partners Limited liability company (LLC) Cooperative 136 Part 6: The corporation in crisis; duties and responsibilities ofthe board in corporate restructuring Basics 137 XIV

12 2. Analysis of the corporation s economic and financial status Basics Analysis of corporate liquidity Duty of the board of directors to rescue the corporation Restructuring by the assembly ofshareholders incase of loss of capital Notice to the judge in case of over-indebtedness Basics Revaluation ofhidden reserves Subordination Bankruptcy 142 Part 7: Termination /dissolution of the company Basics Termination rules Society Foundation Simple partnership 147 a) Ordinary reasons for termination 147 b) Extraordinary reasons for termination 147 c) Consequences oftermination Generaland limitedpartnership 148 a) Reasons for termination 148 b) Avoidance oftermination 148 c) Consequences /Execution of termination and liquidation Corporation 149 a) Protection of creditors 149 b) Ordinary reasons for termination 150 c) Extraordinary reasons for termination 150 d) Dissolution /Termination without liquidation / restructuring 151 e) Implementation ofthe liquidation /dissolution with liquidation Corporation with unlimited partners 153 XV

13 2.7 Limited liability company (LLC) 153 a) Ordinary reasons for termination 153 b) Extraordinary reasons for termination 153 c) Execution of termination and liquidation Cooperative 154 a) Ordinary reasons for dissolution /termination 154 b) Extraordinary reasons for dissolution / termination 154 c) Consequences of termination and liquidation 155 Part 8: Restructurings, mergers and acquisitions Basics Merger Basics Definitions 158 a) Share Deal 158 b) Asset Deal Absorption Merger Combination Merger Merger of companies with other company forms Procedure 160 a) Merger agreement 160 b) Content ofthe merger agreement 160 c) Merger report 161 d) Inspection rights of the members 161 e) Merger resolution 161 f) Entry in the Commercial Register 161 g) Protection of creditors 162 h) Consultation of employees 162 i) Facilitated merger Demerger Basics 162 a) Split up /Spin off 162 b) Symmetric and asymmetric demerger 163 c) Demerger to merge or to establish Procedure 164 a) Basics 164 XVI

14 b) Demerger plan /demerger agreement 164 c) Demerger report and audit 164 d) Demerger resolution 164 e) Entry in the Commercial Register 165 f) Protection ofthe creditors 165 g) Protection of employees Conversion (change of company form) Basics Possible conversions Procedure Transfer of assets and liabilities Basics Procedure Protection of creditors Takeover Rules Disclosure of shareholdings Public takeover offers 169 Part 9: Company-Groups Terminology Group of companies Economic unity Common management Interests ofthe Company-Group and subsidiaries, and purpose ofthe company Agreements between holding companies and subsidiaries Contractual relationships between holding company and subsidiary company Conclusion of agreements between companies ofa Company-Group Transfer of assets and guarantees between group members Protection of minority shareholders; limits of common management The minority shareholder in the Company-Group 173 XVII

15 4.2 Limits ofthe common management /protection of minority shareholders rights Publicity and consolidated financial statements Consolidated financial statement: an image of economic unity Duty to prepare consolidated financial statements Function of the consolidated balance sheet Liability issues in Company-Groups Basics The responsibility of the Parent company based on agreement Comfort letters Trust on groups Tort Piercing the corporate veil Directors liability for de facto bodies 178 XVIII