Shell Trading
According to Article 684a of the Swiss Code of Obligations (CO), the transfer of shares is null and void if the company no longer carries on any business activity, has no realisable assets and is overindebted. The Federal Supreme Court refers to this as a so-called “shell trading” (Mantelhandel), i.e. the transfer of a company that is economically but not legally liquidated.
Shell trading enables circumvention of the statutory rules on company formation and liquidation. A company that is de facto liquidated must be formally dissolved.
Opting-out (Waiver of Limited Audit Requirement)
Pursuant to Article 727a para. 2 CO, the waiver of the limited audit is only valid for future financial years and must be filed with the commercial register before the beginning of the financial year.
The waiver is only effective if the signed financial statements of the previous financial year are submitted with the application. In the case of newly incorporated companies, the opting-out remains permissible at the time of incorporation.
Renewal of the Opting-out Declaration
In accordance with Article 62 para. 5 of the Commercial Register Ordinance (HRegV), the commercial register office may request the company to renew the opting-out declaration or appoint an auditor:
if the cantonal tax authorities report that a company has failed to submit its annual financial statements (Article 112 para. 4 of the Federal Act on Direct Federal Taxation of December 1990 [DBG]), or
if there are indications that the conditions for the opting-out are no longer met.
If the commercial register office does not receive the financial statements, this constitutes an organisational deficiency under Article 939 CO. In such cases, the commercial register office will request the company to remedy the deficiency within a set deadline:
if the company appoints an auditor, the appointment must be registered with the commercial register;
if no auditor is appointed, the commercial register office will refer the matter to the court (Article 939 para. 2 CO).
Conclusion
The new provisions impose stricter requirements on corporate governance and transparency. The described scenarios trigger immediate responses from tax and commercial register authorities. Careful compliance with the new legal framework is essential to avoid regulatory action and legal consequences.
Author
Pamela Amrein
Tax
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Baar
