All about the Shareholders' Meeting

TABLE OF CONTENTS

In the following article you will learn more about the shareholders’ meeting.

We outline the most important points here. Subsequently, you will be provided with legally compliant templates according to Swiss law in German, English and French.

1. Shareholders' Meeting: What is it and What is it For?

1.1. Shareholders' Meeting: Definition

The shareholders’ meeting consists of the shareholders of a company and – as a corporate body – is responsible for the company’s most important and fundamental decisions. In doing so, it has some powers mentioned by law that cannot be delegated to the board of directors.  The most relevant in practice are, for example, the election or dismissal of members of the board of directors, the appropriation of the annual results, the change of the number of shares (increase or decrease of the share capital) or the restriction of the transferability of shares. 

1.2. Shareholders' Meeting and Audit Report

In principle, companies are required to appoint an auditor and have their annual financial statements verified by the auditor. The auditor then makes a recommendation to the shareholders’ meeting in a report as to whether or not the annual financial statements (and the proposed appropriation of profits) should be approved. 

If a company does not have more than 10 full-time employees on an annual average, it may waive the audit upon a unanimous decision by the shareholders.

The law distinguishes between the limited audit (standard case) and the more comprehensive, ordinary audit. An ordinary audit is required if certain threshold values are exceeded (number of employees, balance sheet and income statement values) and/or if the company is a public company. In the case of an ordinary audit, the law lays down additional requirements for the annual financial statements, such as the preparation of a management report.

If an audit is carried out, this has two consequences for the preparation and conduct of the shareholders’ meeting. On the one hand, the auditor’s report must be made available for inspection or must be enclosed with the invitation. On the other hand, the presence of an auditor at the general meeting is generally mandatory

2. When Must the Shareholders' Meeting Take Place?

The law basically distinguishes between ordinary and extraordinary shareholders’ meetings.

The ordinary shareholders’ meeting must be held once a year, within 6 months of the end of the financial year

The extraordinary shareholders’ meeting, on the other hand, is convened only when this is necessary. The subject of discussion at the extraordinary general meeting are in principle “ad-hoc” resolutions such as capital increases, the removal of members of the board of directors or the relocation of the registered office. Often the format of a universal meeting is chosen. The advantage of such a format is that the formal requirements for convening the meeting (see below “How the invitation is issued”) do not apply. However, this format requires that the entirety of the owners of all shares are either present or represented  and – of course – agree to it.

2.1. Is it Permitted to Postpone the Shareholders' Meeting?

In principle, the law provides that the shareholders’ meeting must be held within a period of 6 months after the end of the financial year. If a company is unable to hold a shareholders’ meeting despite the possibilities according to Art. 27 COVID-19 Ordinance 3 (e.g. possibility of virtual attendance), it must postpone the shareholders’ meeting to a later date. Even if in this case the 6-month deadline can no longer be met, the holding of the shareholders’ meeting and the resolutions passed are still legally valid by way of exception.

2.2. Is it Possible to Hold the Shareholders' Meeting Online?

A key principle of Swiss company law is that a shareholders’ meeting must take place at a specific place and date, e.g. Messehalle Oerlikon, June 16, 2021, 17:00 – 22:00. According to this principle, a virtual or hybrid execution would be excluded.

However, according to Ordinance 3 of the Federal Council on measures to combat the coronavirus, which is in force until December 31, 2021, companies may hold their shareholders’ meeting virtually to avoid too large a number of participants. On October 27, 2021, the Federal Council decided that this will also apply in 2022. In this case, the board of directors must inform the participants in writing no later than 4 days before the meeting

With the revision of Swiss company law, which is expected to come into force in 2023, such adjustments will also be found in the law, which would turn its back on the strict principle.

For the time being, however, Ordinance 3 of the Federal Council on measures to combat the coronavirus still applies. To hold a shareholders’ meeting online, e.g. with Zoom, is therefore lawful under consideration of the aforementioned.

3. Preparation and Organization of the Shareholders' Meeting

3.1. Who Convenes the Shareholders' Meeting?

The shareholders’ meeting is convened by the board of directors (and under specific circumstances by the auditor). The board of directors usually passes a resolution to this effect.

3.2. Preparation of the Shareholders' Meeting

Before a shareholders’ meeting can take place, a number of preparatory actions must be completed. In particular, these are the convening of the shareholders’ meeting in due time and form, the preparation of the annual report and, if applicable, the auditor’s report, to which the shareholder must be granted access. In addition, a place or a location as well as a date for the meeting must be selected

Before the meeting is convened, it is recommended to agree on a date with the shareholders as early as possible ahead of the meeting to ensure maximum attendance.

3.3. Shareholders' Meeting: Who Must be Invited?

All shareholders must be invited to the shareholders’ meeting. According to the law, the members of the board of directors may also attend. In practice, this is almost always the case, especially as the shareholders have the opportunity to ask questions to the board of directors. If the company is subject to an audit requirement (see “Shareholders’ Meeting and Audit Reportabove), the auditor must be present unless the shareholders unanimously waive their presence. 

3.4. How is the invitation issued?

The shareholders’ meeting must be convened no later than 20 days before the date of the meeting. In practice, it is often said to be at least 21 days in order to take into account the written mailing time. To ensure that you do not miss the deadline, we recommend sending the invitation 30 days or more in advance. The articles of incorporation may provide for longer, but not shorter deadlines. (The articles of incorporation are the basic norms of a company, with mandatory legal provisions providing the legal framework. )

The form prescribed in the articles of incorporation must be followed (e.g. written form). With this in mind, make sure that a specific format is provided for. In terms of content, the law requires that the notice of meeting contain the items to be discussed. For example, the elections of the board members are considered to be an item of the agenda. The notice of meeting must also include the motions of the board of directors and those of the shareholders (if any). If agenda items and motions are not duly announced, no resolution may be passed on them, with a few exceptions.

Only the form of the universal meeting does not require compliance with the form requirements for convening the meeting. 

Furthermore, it is mandatory to state in the notice convening the meeting that the annual report (annual financial statements and possibly consolidated financial statements) and the auditor’s report (if the limited audit has not been waived) will be available for inspection at the registered office of the company for 20 days prior to the general meeting and that any shareholder may request a copy of these and that they be sent to him. In practice, however, it is customary for the annual report and, if applicable, the auditor’s report to be sent to the shareholders together with the invitation to the meeting.

Furthermore, it makes sense to send the power of attorney together with the invitation to the shareholders’ meeting.

Save time and use our templates for the invitation to the ordinary or extraordinary shareholders’ meeting.

4. Holding a Shareholders' Meeting: What Should be Considered?

4.1. When is the Shareholders' Meeting Quorate?

In order for a shareholders’ meeting to be able to pass resolutions in accordance with the law, attention must be paid first and foremost to convening the meeting in due time and form. Secondly, specific rules regarding attendance requirements may arise from the articles of incorporation or, if applicable, a shareholders’ agreement. If the form of the universal meeting is chosen, special care must be taken to ensure that all shareholders or their representatives are present and agree to the holding of the universal meeting. Consequently, a shareholders’ meeting that does not meet these requirements cannot be validly held nor can it pass resolutions.

In principle, the shareholders’ meeting takes its decisions by an absolute majority of the votes present. One share corresponds to one vote. The articles of incorporation or the law may stipulate other so-called quorums.

The law conclusively lists important resolutions for which the passing of resolutions is subject to more stringent majority requirements. These include, to name a few, the amendment of the corporate purpose, the transferability of registered shares, the introduction of voting shares, the restriction or cancellation of subscription rights or the relocation of the registered office of the company. In these cases, two-thirds of the votes represented and an absolute majority of the nominal value of the shares represented are required.

4.2.Representation of Absent Shareholders

There is no obligation to be present. The law leaves it up to the shareholders to decide whether they wish to attend in person, to be represented or even to stay out of the decision-making process altogether. Various options are open to the shareholders in terms of representation. However, these may be subject to statutory restrictions.
In principle, the shareholder may be represented by any other shareholder. Unless otherwise stipulated by the articles of association, the shareholders may also be represented by any other person who need not be a shareholder themselves

Are you unable to  attend the next shareholders’ meeting but still want to cast your vote? Use our free template of power of attorney for the ordinary or extraordinary  shareholders’ meeting.

4.3. Notarization of Certain Resolutions: Presence of the Notary

Certain resolutions must be recorded in a notary deed. This is the case, for example, with amendments to the articles of association, capital increases, relocation of the registered office or liquidation resolutions. In order for these resolutions to be legal, a notary who performs the public certification must be attend the meeting.

4.4. Shareholders' Meeting: Minutes

By law, minutes are required to be kept during the shareholders’ meeting. These minutes must contain:

There is no statutory deadline for the publication of these minutes. However, it is recommended that it be published promptly after the meeting. It is advisable to prepare these minutes in advance. For this purpose, use our template, with which you can easily and time-efficiently create your shareholders’ meeting minutes.

5. Preparation at a Glance: Which Documents do I Need for a Shareholders' Meeting?

You are preparing a shareholders’ meeting and don’t know which documents you need for it? Here you will find at a glance all the documents that are required for preparing or holding a shareholders’ meeting.

6. Documents for the Shareholders' Meeting

6.1. Shareholders' Meeting: Templates in English

6.1.1. Shareholders' Meeting Invitation: Templates in English

6.1.2. Shareholders' Meeting Minutes: Templates in English

6.1.3. Shareholders' Meeting Power of Attorney: English Templates

6.2. Shareholders' Meeting: Templates in German

6.2.1. Shareholders' Meeting Invitation: Templates German

6.2.2. Shareholders' Meeting Minutes: Templates in German

6.2.3. Shareholders' Meeting Power of Attorney: German Templates

6.3. Shareholders' Meeting: Templates in French

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Tobias Güntenspenger - Sales Manager bei Approovd - Schweizer Vertragsmanagement Software

T: +41 44 700 60 04

Tobias Güntensperger
Your Sales Expert

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