Revision of company law – capital reduction (Art. 653j ff. nOR) and capital band (Art. 653s ff. nOR)

The share capital is currently fixed when the company is founded and can later be changed through an ordinary, authorized or conditional capital increase as well as through a constitutive or a declarative capital reduction. In June 2020, Parliament passed the new company law, which is expected to come into force in 2023. With the capital band and the capital reduction, this article is dedicated to two selected topics from the multitude of innovations associated with the revision of company law.
The creation of Art. 653j ff. OR preserves the substance of the creditor protection provisions, but at the same time leads to an acceleration and flexibilization of the procedure. According to the new stock corporation law, a one-off debt call is now sufficient instead of the three that were previously required. In addition, the period within which creditors can request security for their claims has been reduced from the previous two months to 30 days.
Irrespective of these innovations, certain protective regulations that are already in force today will continue to apply. An audit confirmation by an approved audit expert is still required. Interim financial statements still have to be prepared if the last balance sheet date is more than six months in the past.
Furthermore, both the execution of the debt call and the necessary examination by the auditing experts are designed to be more flexible insofar as these are now possible before the resolution by the General Assembly if the circumstances are clear. In this case, the responsible auditing expert simply has to be present at the AGM. It should be noted, however, that the audit by the audit expert must always be based on the result of the debt call, which is why it must only take place after the debt call has been made.
Finally, there is now a period of six months from the date of the resolution by the General Meeting for the ordinary capital reduction to be carried out.
Apart from the flexibilization of the capital reduction just illustrated, the new capital band created by the legislature is a central aspect of the revision of company law. According to Art. 653s Para. 1 revOR, the Articles of Association can authorize the Board of Directors to increase or decrease the share capital within a range, the so-called capital band, of 50% of the share capital entered in the commercial register for a maximum of five years. The capital band combines the previous authorized capital increase with the new possibility of an authorized capital reduction. This will enable the company to handle the capital structure flexibly and to adjust the share capital to the current circumstances in a short time. The authorization to increase capital as part of the capital band is intended to give the Board of Directors more scope and flexibility when it comes to equity financing. Larger companies in particular are interested in the rapid availability of new equity. In project financing, the additional flexibility in equity financing creates the conditions for an optimal combination of equity and outside financing. In the case of company takeovers, a more flexible capital increase procedure makes it easier to provide shares for a share exchange offer. In the event of overcapitalization, the capital band is intended to create more flexibility for capital reductions.
Do you have any questions regarding the founding of a company or a change in the capital of your company? Our team will be happy to accompany you in all corporate law matters and support you in order to implement your needs and interests in the best possible way.

posted in March 2022 | Noelle Christ und Philipp Emmenegger

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