Monday 8 December 2008

Switzerland: company law reform - update

An update on the reform of company law in Switzerland. On 5 December, the Federal Council announced the extension of the current programme of company law and accounting reform. The draft Bill will provide listed company shareholders with an annual vote on directors' pay. The Council has rejected the case for more stringent legislation, including the prohibition of golden hellos and golden parachutes (the so-called popular initiative). In a press release published by the Federal Department of Justice and Police, it is stated:

The Federal Council firmly believes that, were Switzerland to abandon its liberal company laws in favour of restrictive, heavy-handed regulation, it would lose its advantage over other countries as a business location. This would result in more firms being established outside Switzerland, companies moving their registered offices abroad, and fewer relocating to Switzerland. Jobs and tax revenues would then also be lost. In addition, were the popular initiative to pass into law, there would have be another major overhaul of company law, which would itself mean delays and legal uncertainty".

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