Switzerland is renowned for its stable legal environment and stringent framework that protects both investors and businesses. Shareholders in Switzerland play a crucial role in corporate governance, whether in SMEs or large listed companies. As a shareholder, it is essential to know not only your rights, such as participating in important decisions, but also your duties, which include complying with legal and statutory obligations. This understanding ensures transparent corporate governance, maintains balance among shareholders, executives, and other stakeholders, and strengthens trust in the company’s management. In this article, we will explore in detail the rights and duties of shareholders in Switzerland and how they influence the management and development of businesses.
Shareholders’ rights in Switzerland
As a shareholder in Switzerland, you enjoy several essential rights that allow you to play an active role in the management and oversight of the company. These rights ensure transparency and promote fair corporate governance. Here is an overview of the main rights available to shareholders under Swiss law.
The right to vote
One of the most important rights for shareholders is the right to vote at general meetings. This right allows you to participate in the company’s strategic decisions, such as electing board members, approving annual accounts, or the distribution of dividends. The voting power of each shareholder is generally proportional to their shareholding in the company’s capital, unless otherwise stipulated in the company’s bylaws. This gives you direct influence over the company’s direction and the appointment of executives.
The right to information
The right to information is another fundamental right for shareholders. This right allows you to access various important documents, such as financial reports, company bylaws, and annual accounts. If you have any doubts or questions, you can also request additional explanations about the decisions made by management. This right to information is crucial for ensuring transparency in the company’s management, enabling you to make informed decisions during general meetings.
The right to dividends
Shareholders also have a right to dividends, provided that the company generates profits. After the approval of the annual accounts and a decision by the general meeting, shareholders can receive a share of the profits, proportional to their capital investment. However, it is important to understand that the distribution of dividends depends on the company’s financial health and the profit distribution policy decided by the company. This right enhances the financial interest of shareholders and their participation in the company’s success.
The right to propose resolutions
In Switzerland, shareholders who hold a significant proportion of the share capital have the opportunity to exercise their right to propose resolutions at general meetings. This right allows them to submit specific topics for discussion or vote that concern them, such as changes in the company’s strategy or executive compensation. This mechanism enables shareholders to actively engage in decisions that directly influence the company’s future, while providing a framework for dialogue with other stakeholders.
The duties of shareholders in Switzerland
Just as shareholders have rights, they also have duties towards the company in which they invest. These responsibilities are crucial for maintaining balance and ensuring that the company operates in the interest of all stakeholders. Here are the main duties of shareholders in Switzerland.
The duty of loyalty
The duty of loyalty requires shareholders to act in the interest of the company and other shareholders. This means they must avoid any actions that could harm the company or favor their personal interests at the expense of other stakeholders. For example, a majority shareholder should not use their position to influence decisions that would solely benefit their interests, especially if it could jeopardize the company’s future or disadvantage other shareholders. This duty of loyalty is essential to ensure ethical and fair management of the company.
The duty to contribute to the share capital
Another fundamental duty of shareholders is to honor their commitment to contribute to the share capital. When the company is established or its capital is increased, each shareholder subscribes to a portion of the share capital that they must release. This duty to release the capital ensures that the company has the necessary funds to finance its operations and development projects. Failure to comply with this obligation exposes the shareholder to legal sanctions, as this contribution is essential for the company’s financial sustainability.
Respect for collective decisions
Respecting collective decisions made in the general assembly is a fundamental principle within the Swiss legal framework. Once a decision is adopted by the majority, all shareholders, even those who voted against it, must comply. This respect for decisions helps avoid internal conflicts and ensures consistent management of the company. Failing to adhere to this rule could lead to internal tensions, compromising the effectiveness of corporate governance.
Relationships between shareholders and executives
The relationships between shareholders and executives must be balanced, based on mutual transparency and respect for roles. In Switzerland, shareholders oversee the company’s management but should not directly interfere in the daily operations, which are reserved for the board members and executives.
The role of shareholder control
The control role exercised by shareholders is essential to ensure that the executives act in the interest of the company and not for personal interests. During general meetings, shareholders exercise their control by electing or removing board members, approving or rejecting annual accounts, or voting on executive compensation. This supervisory role allows shareholders to ensure that the company is well-managed and follows the strategy decided in the meeting.
Respect for roles
It is crucial for shareholders to respect the separation of powers between company management and their own role. While shareholders participate in major strategic decisions through their votes, the day-to-day management remains the responsibility of the board of directors and executives. By respecting this distinction, they allow the company to operate efficiently, while exercising indirect control over major decisions through general meetings.
Hevea Invest: Tailored Support for Shareholders in Switzerland
When it comes to managing your rights and duties as a shareholder, having expert guidance is essential. We understand the complexities of corporate governance in Switzerland and work alongside our clients to provide personalized support at every step. Our goal is to help you navigate the Swiss legal environment effectively while respecting your interests as a shareholder.
Legal advice tailored to your needs
Whether you are a majority shareholder or a minority shareholder, the decisions you make can significantly impact the management and direction of the company. That’s why Hevea Invest provides you with a team of experts to help you understand your voting rights, protect your interests during general meetings, and ensure that your resolutions are considered fairly and equitably.
Protection and defense of shareholders’ interests
In case of disputes or conflicts with the directors or other shareholders, Hevea Invest assists you in resolving disagreements, prioritizing approaches that comply with Swiss law and protect your rights. We work hand in hand with you to ensure constructive dialogue, while making sure you are well-informed and supported throughout the process. Thanks to our network of partners specialized in corporate law, we offer solutions that combine efficiency and transparency.
Conclusion
In Switzerland, the rights and duties of shareholders form a balanced framework aimed at ensuring healthy and transparent corporate governance. By exercising their rights responsibly and respecting their duties, shareholders contribute to the stability and development of the company. This well-defined framework helps strengthen trust between shareholders, management, and the company, while making Switzerland a favorable environment for investors and entrepreneurs.
Questions – Answers
The main shareholder rights in Switzerland include the right to vote, the right to information, the right to dividends, as well as the ability to propose resolutions at general meetings. These rights allow them to actively participate in the governance of the company.
The right to vote grants shareholders the ability to participate in the company’s strategic decisions, such as electing board members, approving annual accounts, or amending the company’s bylaws.
The duty of loyalty requires shareholders to act in the interest of the company and all shareholders. They must not make decisions that favor their own interests to the detriment of the company or its other stakeholders.
Shareholders are required to release the share capital they subscribed to during the company’s formation or during a capital increase. This funding is essential for the proper functioning of the company.
The dividend is the portion of the profits made by the company that is redistributed to shareholders after the approval of the accounts. This amount is proportional to the share of capital that each shareholder holds in the company.
In Switzerland, shareholders who hold a certain percentage of the company’s share capital have the right to propose resolutions to be included on the agenda of the general meeting. This allows them to influence important strategic decisions.
If a conflict arises with management, shareholders can use their voting rights to elect a new board of directors or reject decisions during general meetings. They can also request explanations or propose resolutions to resolve the conflict.
Shareholders have the right to information, allowing them to access the financial reports, the company’s bylaws, and the annual accounts. These documents are essential to ensure the transparency of the company’s activities.
No, although shareholders have a right to vote at the general meeting, they do not directly intervene in the daily management of the company. The board of directors is responsible for operational management, while shareholders exercise indirect control.
No, in principle, the liability of shareholders is limited to the amount of their shareholding in the capital. They are not personally liable for the company’s debts, except in cases of gross misconduct or abuse of their position.
