NEWS

Abolition of bearer shares

The bearer share for non-listed companies will be abolished - do you see a need for action?

The Federal Act on the Implementation of Recommendations of the Global Forum on Trans­parency and Exchange of Information for Tax Purposes will enter into force on 1 Novem­ber 2019. This will lead to the de facto abolition of bearer shares for non-listed companies.

Companies with bearer shares must convert them into registered shares within 18 months of the law coming into force, i.e. by 30 April 2021. If the conversion is not made within this period, the law provides for an automatic conversion. The conversion of bearer into registered shares requires an amendment of the articles of association. As long as this amendment has not been undertaken, the Commercial Registers will reject any other notification for entry of an amend­ment of articles of association.

We therefore recommend that you start now to convert bearer into registered shares.

Only in a few exceptional cases will bearer shares still be permissible, namely when:

- the Company has listed equity securities on a stock exchange; or

- the bearer shares are structured as intermediated securities and deposited with

  a custodian in Switzerland or entered in the main register.

A company covered by these exceptions must have this registered in the commercial register within 18 months after the new law has come into force, i.e. by 30 April 2021.

Share register - ensuring compliance

Furthermore, new stipulations in the Criminal Code provide that persons who do not comply with the obligation to report the beneficial owners of stocks or shares and persons who, in particular, do not maintain the share register or the list of beneficial owners in accordance with the regulations may now be fined. We therefore highly recommend that you comply with the reporting requirements and/or update the corresponding register.

If you see a need for action, please contact us. We will be happy to put you in touch with our attorney partners, who can assist you in imple­menting these changes.