Legal considerations in connection with COVID-19

Ban to hold public and private events, including general meetings of companies

With the amendments to the COVID-19 Ordinance which entered into force on 17 March 2020 (the “Amended COVID-19 Ordinance”) the Swiss Federal Council introduced substantially a ban to hold public or private events. These unprecedented restrictions have also substantial consequences for general meetings of companies in Switzerland. The ban to hold meetings includes general meetings of companies with physical presence of their shareholders. Based on applicable laws, companies whose financial year ended on 31 December 2019 have to hold their annual general meeting by 30 June 2020. However, the board of directors may also postpone a planned or already convened general meeting for material reasons. Even if the period of six months is thereby violated, the company is not threatened with any immediate sanctions.

New rules for holding a general meeting

In order to enable Swiss companies to hold their general meetings despite the current restrictions, the Amended COVID-19 Ordinance authorizes in Article 6a the holding of general meetings in writing, in electronic from, or by an independent proxy designated by the company.

For Swiss companies this means the following:

• General meetings with physical presence are banned until 19 April 2020.
• Companies which already issued their invitations to general meetings to be held on a date before or on 19 April 2020 must either postpone the general meeting or inform the shareholders on how they can exercise their voting rights (as no physical meeting ca be held).
• If the general meeting is not postponed, the company must notify its shareholders in writing or electronically (e.g. on the company's website) on how they can exercise their voting rights at the latest four days before the date of the general meeting.
• The company must implement respective measures so that the shareholders can exercise their voting rights.

At present, the ban is in force until 19 April 2020, but could be extended by the Swiss Federal Council. Therefore, if general meetings are scheduled to be held after 19 April 2020, they may still be planned as meetings with physical presence. However, companies should also plan based on an ongoing ban which means that the date of the general meeting should not be before 24 April 2020 so that there is sufficient time (at least four days) for the company to elect and implement the measures how the shareholders can exercise their voting rights. The board of directors must inform the shareholders about the measures taken, so that they are aware of the changed formalities and can prepare appropriately to exercise their rights.

It should be noted that anyone who deliberately violates Art. 6 of the Amended COVID-19 Ordinance (which includes the ban to hold public or private events) shall be punished with imprisonment for up to three years or a fine (Art. 10d of the Amended COVID-19 Ordinance).

Further developments

In view of the current uncertainty regarding COVID-19, the information and recommendations presented in this legal provide a high-level overview, do not claim to be comprehensive, are subject to change at short notice, and should always be adapted to the specific situation. It does not represent legal advice.

Questions?

If you have any questions relating to this legal alert or would like to have advice concerning your particular circumstances, please get in touch with your contact at Deloitte Legal.