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financial benefits granted to managers that may affect the financial sta-
bility of the company shall be controlled more strictly.
Other Provisions
The Draft also includes certain reforms on arrangement with cred-
itors and over-indebtedness. Accordingly, liquidity shortage of the
company, the fact that company’s assets do not cover two-thirds of the
aggregate of capital and legal reserves, the fact that losses of the pre-
vious activity year exceed one-half of the capital pursuant to the bal-
ance sheet of the relevant activity year, the company’s loss in three
consecutive years, and serious concerns with respect to over-indebted-
ness of the company, are considered to be signals of over-indebtedness
(Art. 725a and 725b of Draft). Art. 376 of the TCC is an adaptation of
the relevant provision of the Swiss Code of Obligations; however,
because of the changes at the phase of adoption of the relevant provi-
sion, Art. 376 causes certain issues amongst scholars.
In addition, the Draft includes provisions regarding limitations of
the companies that are subject to the obligation of consolidated
accounting, gender quota of 30% in management, and the obligation of
disclosure by companies exploiting natural resources.
Conclusion
The reform on Swiss corporate law was reconsidered on 29
November 2014 with the Draft. The Draft includes various reforms in
different fields. The reform on the capital structure of companies aims
to harmonize the provisions on capital structure with other rules, and
to harmonize such provisions with current necessities. Additionally,
the reform on shareholding facilitates the exercise of the rights of
shareholders. The Draft also includes several provisions on excessive
compensation of managers, which offers a legislative base to the
ORAb. The Draft reinforces financial stability of companies by
proposing a more effective system of notice of over-indebtedness.
Furthermore, provisions on gender quotas, as well as companies that
exploit natural resources are also included in the Draft. Due to the
scope of the Draft, it is not expected for these amendments to enter into
force prior to 2017.
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