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19 May 2003
It is commonly known that a judge can order the dissolution of a company. However, it is less well known that in certain circumstances the Swiss commercial registrar may also register the dissolution of a company. This update outlines the circumstances in which the commercial registrar may dissolve a company which is registered in the Commercial Register.
The corresponding legal basis can be found in the Swiss Code of Obligations and the Regulation of the Commercial Register. Essentially, the commercial registrar has the power to dissolve a company if that company infringes any mandatory provisions regarding the composition of the board of directors or the company's domicile. The commercial registrar is not obliged to monitor compliance with these rules on an ongoing basis, but must review their fulfilment if changes to the registration are requested. In practice, it is effectively left to the commercial registrar's discretion to decide whether to intervene in a given case.
According to Article 708(1) of the Swiss Code of Obligations, the majority of the members of the board of directors must have Swiss citizenship and be domiciled in Switzerland. (An exemption from this requirement may be obtained from the Federal Council, but is only available for companies whose principal purpose is the holding of participations in other enterprises.) At least one member of the board of directors authorized to represent the company must be domiciled in Switzerland (Article 708(2)). If the board of directors consists of a single person, then this person must have Swiss citizenship and be domiciled in Switzerland (Article 708(3)).
If these rules are no longer fulfilled, the commercial registrar will set a time limit within which the company must regularize the situation. If the company fails to ensure compliance within this period, the registrar may declare the company dissolved ex officio (Article 708(4)).
Further details of this procedure can be found in Article 86 of the Regulation of the Commercial Register. According to this provision, the commercial registrar will request the company by registered mail, official delivery or publication to remedy the situation within an appropriate period of time (generally at least 30 days), under threat of dissolution. If the company fails to comply within this period, the commercial registrar declares the company dissolved by order. In making this order of dissolution the commercial registrar must add the annex 'in liquidation' to the company name and appoint the members of the board of directors as liquidators. He must also forward this information to the company.
If the company re-establishes the legally required situation within three months of registration of its dissolution, the dissolution order can be repealed.
According to Article 626 of the Swiss Code of Obligations, the articles of incorporation must contain a provision stating the address of the company's domicile. This domicile can either be the company's own premises or a care-of address.
If a company's domicile is no longer at the place which is listed in the articles of incorporation, the commercial registrar will request the company by registered mail, official delivery or publication to remedy the situation within an appropriate period of time (generally at least 30 days), under threat of dissolution. Notification of this request will usually be served by registered mail to the domicile which is registered in the Commercial Register and to one member of the board of directors.
If the company fails to provide details of its new domicile by the specified deadline, the commercial registrar will dissolve the company, adding the annex 'in liquidation' to the company name and appointing the members of the board of directors as liquidators. As before, the dissolution may be repealed within three months of its registration if the necessary information is provided within this period.
The commercial registrar is entitled to intervene in a company's registration in certain other cases - for example, he can delete a company from the Commercial Register if it no longer has any realizable assets - but the circumstances described above are the only ones which may lead to the dissolution of a company by the commercial registrar.
For further information on this topic please contact Markus Doerig or Philipp Schaller at Badertscher Doerig Poledna by telephone (+41 1 266 20 66) or by fax (+41 1 266 60 70) or by email (email@example.com or firstname.lastname@example.org). The Badertscher Doerig Poledna website can be accessed at www.bdp.ch.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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