The Swiss commercial register is a crucial tool for ensuring transparency and trust in business transactions. Companies are required to regularly review their entries and promptly update them when changes occur. But what happens if this obligation is not met? In this article, we delve into the legal consequences of non-compliance and explain why it is in every company’s best interest to keep its commercial register entries up to date.
Legal basis and reporting obligation
According to Article 937 of the Swiss Code of Obligations (CO), changes that affect information entered in the commercial register must be reported without delay. This applies to changes such as company name, business purpose, location, or changes in the composition of the board of directors. This obligation is intended to ensure that the information published in the commercial register is correct and up to date, as it is accessible to many stakeholders, including business partners, customers, and investors.
Administrative and legal consequences
Failing to update the commercial register can have serious consequences. Initially, administrative measures can be imposed in the form of fines, as stipulated in Article 943 CO. The registry authority can impose fines ranging from 10 to 500 Swiss francs for failing to report changes. It’s important to note that this is not the first reaction of the authorities; companies are typically informed first and given the opportunity to make the necessary updates.
However, if a company continues to refuse to comply, further legal measures may be taken, including the forced dissolution of the company by the registry authority.
Criminal consequences
The situation becomes particularly severe when companies intentionally provide false information in the commercial register or deliberately fail to report required changes. In such cases, the Swiss Criminal Code (SCC) applies, specifically Article 153 SCC, which provides for imprisonment of up to three years or fines. These sanctions come into play when a company attempts to deceive the registry authority or knowingly submits false information.
Impact on business operations
In addition to the direct legal and financial consequences, companies should not overlook the potential indirect damage. An outdated entry in the commercial register can erode the trust of business partners and customers. Since the commercial register is publicly accessible, potential partners or investors can quickly verify whether the information is current and accurate. A misleading or incomplete entry could result in lost business opportunities or even damage to the company’s reputation.
Practical advice for compliance
To avoid undesirable consequences, companies should regularly review their commercial register entries. It is advisable to do so after every board meeting or major business decision to assess whether an update is required. Additionally, establishing an internal process to ensure that all necessary changes are reported promptly and accurately can be a useful strategy.
Conclusion
Updating the commercial register is not only a legal obligation but also a key component of a company’s long-term success. Companies that regularly and diligently maintain their entries protect themselves from legal repercussions and strengthen their market position. It is well worth being proactive and ensuring that all information recorded in the commercial register is always up to date.
To make this process as easy as possible, Hoop offers a fully digital solution for updating your commercial register entries. With Hoop, you can manage all necessary changes, from company name and address updates to changes in your board of directors, ensuring full compliance with Swiss regulations. Our service simplifies the process, giving you peace of mind while avoiding administrative and legal complications. Contact us today to ensure your company is always in compliance.
Sources and references:
– Swiss Code of Obligations (CO), Articles 937 and 943.
– Swiss Criminal Code (SCC), Article 153.
– Commercial Register Ordinance
– SME Portal for small and medium-sized enterprises (for detailed information on reporting obligations).
This blog article does not constitute legal advice, it is made available “as is” and makes no claim to completeness or accuracy. Hoop makes no warranty or liability as to its content. This is excluded to the extent permitted by law. Use is at your own risk. Legal advice is recommended if necessary.
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