Although mergers or changes of corporate form have been permitted under Swiss law in individual cases, there have been no provisions available governing such transactions in general. Because there is a clear need for businesses to change their corporate form, either as a consequence of the company's growth or to meet the requirements of the capital markets, Switzerland's Federal Council entrusted a group of experts in 1999 to draft a law on the matter, which will come into force soon.
The Law on Mergers not only regulates mergers and – for a restricted number of entities – changes of corporate form, but also the split of a company and the transfer of assets. It also contains specific rules for when a trust or a public entity is involved. The Law aims to protect debtors and minority shareholders in the companies concerned, by providing legal certainty and transparency.
Although the Law basically supports for mergers and splits the continuity of membership, there are provisions foreseen that allow the voluntary or forced exit of shareholders and – in the case of splits – a change in the scale of their participation. As these provisions could affect the shareholders' legal status, such proceeding require a qualified majority in the general assembly of shareholders. Further, the Law defines the minimum content of the merger or split agreement and obliges the board of directors to issue a report on behalf of the shareholders explaining the transaction. The new law also sets rules about the liability of all individuals involved in transactions.
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