Register of Shares and Beneficial Owners of Companies in Switzerland

Analysis of Articles 697j, 697k, 697l, and 697m of the Swiss Code of Obligations (CO)

The articles of the Swiss Code of Obligations analyzed here deal with the reporting obligations for purchasers of shares in non-listed companies. This set of rules aims to ensure transparency in corporate ownership and to maintain a clear register of shareholdings by real economic owners. Here is a detailed analysis of these legal provisions:

Article 697j – Reporting Obligations upon Acquisition of Shares

Article 697j states that any person, alone or in collaboration with others, acquiring a significant stake (25% or more) in a non-listed company must inform this company of their identity and that of the beneficial owner. This includes personal information such as name and address. The purpose is to maintain a clear record of the actual control exerted over companies.

• If the shareholder is a legal entity, the identity of any natural person controlling the entity must be disclosed.
• Shareholders of publicly traded companies only need to disclose their listed status and basic corporate information.
• Any changes to the information of the beneficial owner must be communicated within three months.
• Shares in the form of intermediary securities are not subject to this reporting obligation.

Article 697k – List of Beneficial Owners

This article specifies that the company must maintain a list of beneficial owners. This list facilitates tracking individuals exercising economic control over the company and serves as a reference for verifying compliance with reporting obligations.

Article 697l – Document Retention and Accessibility of the List

The company is required to retain the reporting documents for ten years after their removal. Furthermore, it must ensure that the list of beneficial owners is accessible at all times in Switzerland. This ensures that authorities and interested parties can verify the information when needed.

Article 697m – Consequences of Non-compliance with Reporting Obligations

This article addresses the consequences for a shareholder who fails to comply with reporting obligations:

• The shareholder cannot exercise any shareholder rights until the reporting obligations are met.
• Property rights are also suspended until the situation is rectified.
• The board of directors is responsible for monitoring compliance with these obligations.

These articles of the CO enhance transparency and governance of non-listed companies. They help combat covert ownership practices and tax evasion by clearly identifying the true economic beneficiaries of enterprises. Additionally, they protect the interests of other shareholders and creditors by ensuring some integrity in corporate management.

In terms of implementation, these obligations require robust internal systems to ensure the collection and management of relevant information. Companies must also be vigilant in tracking changes to ownership and control structures.

Articles 697j to 697m of the CO play a crucial role in regulating corporate ownership in Switzerland, providing a solid framework for transparency and regulatory compliance. These rules enhance investor confidence and contribute to a more stable and predictable business environment in Switzerland.

My Swiss Company – Corporate Services Provider in Switzerland

My Swiss Company is a corporate services provider that provides support services to Swiss companies, particularly in managing compliance with legal requirements regarding the maintenance of registers of actions and beneficial owners. Here are some ways My Swiss Company could assist Swiss businesses in meeting these obligations:

Administrative and Legal Assistance

My Swiss Company can provide assistance in understanding and applying the provisions of the Swiss Code of Obligations, including articles 697j to 697m. This includes interpreting legal requirements and providing guidance on how to implement them effectively and compliantly.

Management of Registers of Shares and Beneficial Owners

The company offers services for the maintenance and updating of registers of shares and beneficial owners. It can help establish these registers from the formation of the Swiss company and ensure their regular updating in case of changes in ownership or control structure.

Notification and Communication with Authorities

My Swiss Company can act as an intermediary to ensure communication between companies and regulatory or governmental authorities. This includes sending required notifications, such as the announcement of beneficial owners to the company, and responding to requests for additional information.

Digitalization and Data Security

It can offer digital solutions for managing shareholder and beneficial owner data. This includes secure systems for storing reporting documents and ensuring that the list of beneficial owners is accessible at all times, as required by law.

Training and Awareness

My Swiss Company could also offer training for directors and business managers on regulatory compliance aspects related to shareholding and reporting of beneficial owners. This helps companies better understand their legal obligations and integrate them into their operational processes.

Audit and Compliance

The company can offer audit services to verify companies’ compliance with current legal requirements. This may include periodic audits to ensure that all necessary information is properly documented and reported.

By providing these services, My Swiss Company plays a crucial role in assisting Swiss companies in navigating the complex regulatory framework and ensuring compliance with legal requirements. This helps companies avoid potential penalties and maintain their reputation in the market, while contributing to transparency and integrity in business practices in Switzerland.

Contact us to start your initial consultation now. We would be delighted to meet you and define the next steps for the legal, administrative, accounting, and tax management of your company in Switzerland.

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