On November 1, 2019 entered into force the new federal Act on the Implementation of Recommendations of the Global Forum on Transparency and Exchange of Information for Tax Purpose (the “Act”). The Act puts a definitive end to the regime of the bearer shares, except in two given cases: (i) bearer shares listed on a Stock Exchange or (ii) bearer shares issued as intermediated securities deposited with a Swiss custodian. The State Secretariat for International Finance SIF published guidelines (the “Guidelines”) providing clarifications on the processes and deadlines.
On May 1, 2021 existing bearer shares, not enjoying the exception regime, will be automatically converted into registered shares. Therefore, companies with outstanding bearer shares enjoying the exception regime will need to apply to the Commercial Registry to have this fact recorded prior to April 30, 2021. After this date, all existing bearer shares will automatically be converted into registered shares. It is advisable for the board of directors to be proactive to convert the existing bearer shares in registered shares and not wait for the automatic conversion. The board of directors updates the shareholder ledger based on the disclosure made by the holders of bearer shares. Where no disclosure has been made, the board of directors records this fact accordingly.
After May 1, 2021 the holders of bearer shares who have not disclosed their identity by making a corresponding statement to the company will need to apply with consent of the company to court to have their rights re-instated. Disclosing the holding of the original title will not be sufficient to prove their entitlement as shareholders. A shareholder will need to provide additional evidence such as a subscription bulletin or a sale and purchase contract which could be difficult when shares have been acquired long time ago. On October 31, 2024, the registered shares belonging to shareholders who have not disclosed their identity and evidenced their shareholdings will be cancelled.
The content of this publication does not constitute legal, business or tax advice and shall not be used or construed as such.
