Due Diligence Crucial for Financial Transactions in Switzerland, Experts Warn
Introduction
Zurich, Switzerland - October 12, 2021 - In a country known for its financial secrecy and complex business landscape, due diligence has become an essential component of any successful transaction. As experts warn, neglecting to conduct thorough due diligence can lead to costly consequences.
The Scope of Due Diligence in Switzerland
When it comes to the scope of due diligence in Switzerland, the typical range includes all aspects of a company’s operations, such as:
- Business and financial matters
- Environmental issues
- Employment matters
- Pension and insurance issues
- Compliance and legal issues
Buyers often have access to an electronic data room, where they can conduct their own due diligence. In some cases, sellers may also provide vendor due diligence reports produced by external specialists.
Liability for Pre-Contractual or Misleading Statements
However, liability for pre-contractual or misleading statements remains a concern. According to Swiss law, sellers can be held liable for such statements unless there is evidence of good faith. This liability cannot be excluded through contractual agreements.
Publicly Available Information in Switzerland
In Switzerland, private companies are required to register with the commercial register (www.zefix.ch), which provides publicly available information on:
- Share capital
- Purpose
- Directors and officers
- Signatory powers
Other publicly accessible documents include:
- Articles of incorporation
- Land registers
- Debt enforcement records
While access to the commercial register is unrestricted, inspections of the latter two require a prima facie legitimate interest.
The Impact of a Buyer’s Actual or Deemed Knowledge on Claims Against a Seller
The impact of a buyer’s actual or deemed knowledge on claims against a seller cannot be overstated. Unless otherwise agreed, buyers are presumed to have knowledge of any disclosed information. In the event of a breach of contractual representations and warranties, liability for the seller is usually excluded if the buyer had or should have had knowledge of the matter.
Conclusion
In conclusion, due diligence is an indispensable component of financial transactions in Switzerland. Failing to conduct thorough due diligence can lead to costly consequences, including liability for pre-contractual or misleading statements. It is essential that buyers and sellers alike prioritize transparency and thorough research to ensure successful transactions.
Date: August 20, 2020