Monday, February 13, 2006

English Translation of the New Swedish Companies Act

I have checked when a translation into English of the text of the new Swedish Companies Act may be available.

The Swedish Ministry of Justice is not going to do an official translation.

However, the Swedish book publishing firm of Norstedts (in Swedish only I'm afraid) will produce an English translation, which probably will by ready sometime this spring. It will be published as part of their publication Swedish Commercial Legislation (ISBN 91-38-55182-9) but also as a separate book.

Time of Registering Shares

Old Swedish Companies Act
According to Chapter 3 Section 13 of the old Swedish Companies Act the following used to apply:

If the share register of a company was maintained by electronic data processing, a print-out of the share register setting forth the circumstances ten days prior to a shareholders’ meeting should be made available to the shareholders at the meeting. From a practical point of view you then had to be registered in the share register at least ten days before the shareholders' meeting.

New Swedish Companies Act
According to the new Swedish Companies Act, Chapter 7 Section 28, the earlier ten day period has been changed to a five day period instead. In addition, the articles of association of the company may prescribe an even shorter period of time.

Tuesday, January 31, 2006

New Swedish Companies Act – Important changes – Part IV

Changes of the Board of Directors

All changes in respect of directors, deputy directors, authorized signatories and managing director will only take effect upon the receipt by Bolagsverket of a notice of change. Please note that it is the date of receipt and not the time of registration that is decisive. According to the old law the relevant time was the time of the shareholders’ meeting or board meeting where the change was decided.

The effect of this change is that a newly elected board not can hold a board meeting until a notice of the change has been sent of to Bolagsverket. When the shareholders have elected the new directors at the shareholders’ meeting, a notice of the change should be faxed or mailed and then the board meeting can be held.

Articles of Association

Amendments may have to be made in the articles of association to bring them in line with the new act.

No par value of the shares should be included. In stead the number of shares or, as an alternative, the minimum and maximum number of shares should be set out. The minimum and maximum number of shares should correspond to the minimum and maximum amount of share capital.

This change does not have to be effected until another amendments is made in the articles of association. All other amendments should be made at the first general shareholders’ meeting in 2006. If a company fails to make prescribed changes at the first general shareholders’ meeting in 2006 the relevant provision will be void.

Under the old act the only provision for “pre-emptive rights” allowed in the articles of association was a provision stating that a buyer of shares in the company was obliged to offer the shares to the other shareholders. The new act opens up the possibility to prescribe that, before selling his shares, a shareholder must either obtain the consent of the company or offer the shares to the other shareholders.