Revised Stock Corporation Act - In force from 2023- MKY GROUP
Revised stock corporation law — MKY Group AG summary
What do I have to consider when navigating my company from 2023?
The revised stock corporation law comes into force on 1\. In force on January 2023. MKY Group AG will provide you with some relevant information just in time.
Increasing liability risks
With the amendments to the Stock Corporation Act and the associated increase in liability risks, the tasks of managing staff in the area of financial responsibility have been expanded.
The basis of a public limited company is its financial structure, which is also a groundbreaking measure of a company's financial responsibility. Constant financing forms the core of the management of a public limited company.
New tasks in difficult economic times
In principle, company law does not describe exactly how the Board of Management should manage the company's finances, but provides certain guidelines. With the 2020 stock corporation law revision, which comes into force on January 1, 2023, legislators have defined new tasks and responsibilities for the Board of Directors, especially in difficult economic times.
The core competencies of the Board of Directors are defined in Art. 716a OR. This provision contains a list of tasks of the Board of Directors which are non-transferable and inseparable.
Pursuant to Article 716a (1) (3), the Board of Directors has the indivisible and indivisible obligation to structure accounting, financial control and financial planning to the extent necessary to conduct the business.
Accounting structure
For the Board of Directors, the organization of accounting means the obligation to create documentation and information systems that ensure timely and proper recording of the company's accounting-relevant transactions. This enables the Board of Directors to react to changes in the company's liquidity, income and asset structure within a reasonable period of time. Financial control, on the other hand, is used for internal monitoring and control. Financial planning obligations concern the Board of Directors. However, the Board of Directors does not have to fully implement the financial planning itself. The only non-transferable task is to take care of financial planning and to find out about the company's financial position.
Obligation of the Board of Directors to monitor
While liquidity has so far been particularly relevant in the area of accounting law, it has recently also been acquired in the area of corporate management. Article 725 (1) of the revised Code of Obligations sets out the obligation to monitor liquidity. The Act requires the Board of Directors to adjust liquidity planning and monitoring to the size and nature of the company and its financial and economic situation at an early stage so that the company does not run the risk of becoming insolvent. Bankruptcy is imminent if the debtor is unlikely to be able to meet his financial obligations over a longer period of time. Expert opinions vary as to the exact duration, but range between 3 and 4 months.
If actual insolvency is imminent, the illiquidity of a company is at risk and it is not just a matter of temporary payments. In such cases, the Board of Directors must take measures to ensure insolvency (Art. 725 (2) RevOr). If necessary, the Board of Directors must also take further measures to restructure the company.
Act with “due haste” — what does that mean?
In carrying out all these tasks, the Board of Directors must always act with “due haste” under the new stock corporation law, with which the legislator once again imposes on the Board of Directors the need to act at the time of impending insolvency. There are different opinions about the deadline, although we often read 30 to 90 days in different literature. This means that action should be taken within this period.
In the event of a capital loss, the Board of Directors is initially required to take measures to eliminate the capital loss. (Art. 725a, paragraph 1 RevOr).
If the company affected by the loss of capital has an existing opting-out, the Board of Directors is obliged to suspend it and appoint an approved auditor for the audit.
In the event of over-indebtedness, the Board of Directors must notify the court and immediately apply for a deferment of estate or the opening of bankruptcy. (Art. 725b, paragraph 3 RevOr).
If the Board of Directors fails to meet its financial responsibility obligations after the new company law provisions have come into force, this may result in liability as a result of a restructuring or bankruptcy delay (StGB Art. 167).
The innovative platform and management information software provides helpful support Money-Key on. Since the beginning of 2022, customers of MKY Group AG have been able to use Money Key to better overview their financial data.
We would be happy to advise you on how to navigate your company more easily and which software solutions make your financial management easier.
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Disclaimer: The content of this blog post is for informational purposes only and does not constitute professional advice. Each individual case should be reviewed individually and we recommend that you seek professional advice for specific questions.
