Georges Felder
Is action needed in your limited liability company?
The new law governing limited liability companies came into force on January 1 2008. As of this date, companies have two years in which to make the necessary adjustments.
There are three aspects that need to be reviewed in every limited liability company and, where necessary, adapted. Firstly, the company’s statutes and regulations must be checked for their conformity to the new law. Secondly, it needs to be clarified whether the company requires an auditing department and whether the company’s entry in the commercial registers needs to be updated accordingly. Thirdly, the company’s accounting procedures must be brought into line with the provisions of the stock corporation law.
An existing limited liability company has until December 31 2009 to adapt its statutes and regulations to the new provisions contained in the Swiss Code of Obligations (OR). If the statutes and regulations are not checked, it may be that provisions that are important to the company’s partners become null and void at this time if they do not comply with the new OR.
By December 31 2008 the limited liability company must have ascertained whether it is required, on the basis of the new OR regulations, to have an auditing department entered in the commercial register. If this is the case, the auditing department must be registered with the Swiss Federal Supervisory Authority. The commercial register checks the registration before the entry can be made. If the limited liability company is only subject to limited auditing, it may be possible for the company to “opt out”. This opting out requires a specific procedure to be followed. In addition, existing companies with an auditing department must already have completed the auditing of the 2007 annual accounts before an opt out becomes possible.
The new law in the OR governing limited liability companies makes reference, with regard to accounting principles, to the provisions contained in the revised stock corporation law. These must be implemented by all limited liability companies by December 31 2009 at the latest. The most important change concerns the fact that, in future, even a limited liability company must include information about carrying out a risk assessment in the appendix to its annual accounts.
In our experience, changes are appropriate or necessary in virtually all limited liability companies. In our view, the following points – in addition to the three main aspects mentioned above – must be checked in all cases:
- The now necessary payment in full of the capital stock (if the company’s capital had previously not been fully paid in)
- The possibility of reducing the nominal value of the equity shares (smaller and more flexible division between partners)
- The number of equity shares per company partner (previously only one equity share per partner was possible)
- The relaxation of the regulations governing the nationality of the partners
- The introduction of the general auditing requirement (companies that are able and willing to opt out of auditing must take action themselves in line with the opt-out regulations)
