When Missing Transparency Invalidates Shareholder Decisions
Transparency obligations relating to beneficial ownership are a key element of Swiss corporate governance. In this decision, the Swiss Federal Supreme Court confirms that failure to comply with GAFI disclosure obligations may lead to the suspension of shareholder rights and even to the nullity of shareholders’ resolutions. The judgment highlights the strict consequences of non-compliance and the increasing importance of transparency requirements for companies and boards of directors.
Background
At an extraordinary shareholders’ meeting of A. AG held as a universal meeting, B. was removed as sole board member and D. and E. were newly elected to the board of directors. The meeting was attended solely by C.C., who claimed to be the company’s sole shareholder. The corresponding changes were subsequently registered in the commercial register.
B., the former board member, challenged the validity of the shareholders’ resolutions pursuant to Art. 706b CO. The key issue was whether C.C. had complied with the disclosure obligations under former Art. 697i ff. CO regarding bearer shares and beneficial ownership and was therefore entitled to vote at the meeting.
Court Decision
The Swiss Federal Supreme Court summarized the former disclosure regime under Art. 697i ff. CO, applicable between 1 July 2015 and 30 April 2021. Under these provisions, any person acquiring bearer shares in a non-listed company had to notify the company within one month and disclose their identity and address. In addition, beneficial owners reaching or exceeding the threshold of 25% of the share capital or voting rights had to be reported pursuant to former Art. 697j CO.
The Court found that C.C. had failed to comply with these disclosure obligations. As a result, the membership rights attached to the shares, including voting rights, were suspended pursuant to Art. 697m CO. Since no valid votes had been cast at the universal shareholders’ meeting, the resolutions adopted there were null and void.
Implications
The judgment illustrates the strict legal consequences of failing to comply with GAFI-related disclosure obligations. The suspension of shareholder rights may result in the invalidity or nullity of shareholders’ resolutions, even where corporate changes have already been registered.
The decision is also highly relevant in light of the forthcoming Federal Act on the Transparency of Legal Entities and the Identification of Beneficial Owners (TJPG), expected to enter into force in 2026 or 2027. Under the new regime, boards of directors will be required to identify beneficial owners, maintain the relevant information, and report changes to the central transparency register within the statutory deadlines. Violations may lead to fines of up to CHF 500,000. The judgment therefore emphasizes the growing importance of transparency and compliance obligations for boards of directors.
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