The Federal Supreme Court recently considered – for the first time – whether board members' rights to information, inspection and insight can also be asserted on an appeal basis. The court also commented on the type of procedure applicable in such cases. This decision should be taken into account by board members who lack evidence or knowledge of important or necessary information, particularly if it relates to the organisation of or disputed relationships within the board of directors.
Shareholders of closely held companies often mutually agree on additional contractual rights and duties. However, the company itself cannot be a contract party to a separate shareholders' agreement. Apart from that legal restriction, such shareholders' agreements usually benefit from the contractual freedom of the parties. A recent Federal Court decision confirmed that such agreements may be recharacterised as abusive or contrary to the principle of good faith.
A recent Zug Cantonal Court decision sheds light on the way that Swiss company articles of association must be interpreted under Swiss company law in cases in which they are not only applicable internally among a few shareholders, but also have an effect on third parties. The decision confirms that the observation of merely the letter and not the spirit of company articles by a company board or majority company shareholders in a general meeting can even amount to an abuse of law.
A recent Swiss Federal Court decision clarified the circumstances under which the personal liability of board members or managers of a Swiss company for their business decisions and omissions can be reduced by applying the so-called 'business judgement' rule or, if the related prerequisites are not met in a particular case, based on other grounds.
The Federal Supreme Court recently clarified how to deal with defects in company organisation caused by deadlock between two equal shareholders. For the first time the court has confirmed that courts are authorised to order a share auction in such cases. However, it is strongly recommended that such a harsh outcome be avoided by installing suitable measures to solve conflicts from the outset.