New company law in Switzerland since 01.07.2016
New Company Law in Switzerland Makes It Easier For Companies To Handover The Business To the Next Generation
Families in Switzerland will find it a lot easier to transfer companies from one generation to another without having to go through rigorous legalities in the form of name changes for the company. According to the old rule in Switzerland, it was mandatory for the company to bear the name of one of the partners of the company. This meant that when that particular partner left the company or handed it over to the next generation to continue the business, it was difficult to keep it going without changing the name because the person whose name was being used was not a part of the company any longer.
The Problem with the Old Law
Every time a person whose name was being used in the company name made an exit, the company’s name had to be adjusted once again. This created a chaos for the company. With regular adjustments having to be made. Many companies found it difficult to transfer the company to the next generation of their family. This chaos has finally been sorted when the Parliament conceded to the repealing of the old law and putting a new law in place which allows the companies to continue using the same name for the company regardless of the people who make up the partners or board of directors list.
What Makes the New Law Better?
This makes it easier for companies to follow the rules even when the partners change or when the company is ready to be handed over to the next generation in the family. Businesses will not have to suffer problems which may erupt because of their identity because they will continue to operate in the same name all the time. It will help a business look more stable and get better opportunities to use its name without the fear of having to change it when a partner decides to retire or leave.
How Does It Affect the Companies?
While this new law is mandatory for all new partnerships that are being established after July 1, 2016, the old companies that are already registered will have the chance to choose a new company name under the new law and register themselves so that they do not have to worry about partner exits in the future.
While the rule does establish that no changes are required when a partner exits the company, it also allows companies to choose a name of their choice without having to add the last name of a partner or a founder to the business name. This means that fancy names can be chosen by the partners without worrying about the law. In future, when the company passes into the next generation, the family will not have to worry about using a different name or changing the name of the company any longer.
Conclusion and benefits
This new law allows businesses the following benefits:
- A chance to look more stable
- The ability to market their products and services under a name without having to go through the trouble of changing all marketing details.
- When any of the partner leaves because the company name can continue to be what it is without having to change its identity.
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