The law, which will come into force on January 1, 2025, will amend the Code of Obligations, the Federal Debt Collection and Bankruptcy Act, the Criminal Code and the Criminal Records Act.
The new legislation, which introduces tighter safeguards, is designed to prevent debtors from misusing bankruptcy proceedings for dishonest purposes, such as evading their debts or financial obligations, including the payment of wages or taxes.
Here’s an overview of the main changes and their implications for businesses.
Fighting unfair competition
In addition to administrative aspects, the new rules also tackle unfair competition. Transfers of shares in over-indebted companies with no business activity or realizable assets will be declared null and void. This will put a stop to fraudulent practices whereby companies in difficulty attempt to evade their responsibilities by transferring their assets.
Red tape reduction
In an effort to cut red tape, the revision of the Commercial Register Ordinance will abolish the requirement for companies to provide documentary evidence that they hold the necessary permits for registration.
In future, registry offices will be required to consult public directories directly to verify the existence of such authorizations (e.g. FINMA authorization for institutions and collective investment schemes).
Bankruptcy proceedings for public law claims
Another consequence of the law’s entry into force is that claims under public law (such as VAT, fines and penalties, tax claims, social security contributions or compulsory insurance premiums) will be subject to the general rules governing bankruptcy proceedings (until now, these claims were pursued by seizure). Companies, the self-employed, associations entered in the commercial register and foundations will thus be subject to bankruptcy proceedings in the event of non-payment. The aim of this measure is to prevent further damage to the community and other economic players, by preventing these companies from continuing to operate while neglecting their financial obligations.
Increased checks on company obligations
Other changes affect cantonal tax authorities, which will now be obliged to inform the Commercial Register Office if a company fails to comply with its obligation to submit annual financial statements. If necessary, the latter will ask the company to renew the declaration of waiver of limited audit or to appoint an auditor. In the event of failure to do so, the Commercial Register Office will refer the matter to the court.
This measure is designed to prevent certain companies from concealing their financial difficulties, particularly from their creditors. By forcing companies to comply with their accounting obligations, this measure enhances transparency and better protects creditors.
Revision of ordinances on the commercial register and criminal records
Implementation of the new law also requires adjustments to a number of ordinances, notably those on the commercial register and criminal records.
The changes contained in the Commercial Register Ordinance include a ban on the retroactive opting-out of limited audits. From now on, this practice, which enabled certain companies to circumvent accounting control obligations, will be prohibited. In addition, a new provision will make it possible to search for natural persons in the commercial register, thus facilitating the verification of information concerning company directors.
With regard to the Ordinance on Criminal Records, bans on professional activities entered in the criminal record (e.g. for reasons of fraudulent bankruptcy) will now be communicated to the competent authorities, such as the Federal Commercial Registry Office (FCRO). This will make it possible to check whether a ban is incompatible with entries in the commercial register, and if so, to prohibit a person from carrying on a business or sitting on a board of directors.
Conclusion
These reforms are designed to enhance transparency and limit abuses in bankruptcy, protecting both creditors and the community. Companies must now comply with stricter rules, particularly with regard to accounting management and directors’ liability. In addition, control measures and sanctions against abuse should limit fraudulent practices and reinforce confidence in the economic system. The impact in terms of the number of bankruptcies, given that public law claims will be subject to the general rules governing bankruptcy proceedings, will have to be verified in the future.
Swiss Certified Accountant, Director
This publication contains general information and is not a substitute for detailed research or expert advice. No liability can be accepted for its content. For specific questions, please contact the author.
