Private Equity Minority Investments - Universität St.Gallen

Part Two: Legal Framework and ToolsHowever, provided the minimum voting right 685 is observed, the companymay deviate from this principle by, for instance, issuing voting shares 686 orparticipation certificates, 687 or by introducing a voting cap 688 . While Swisscorporation law permits the issuing of shares of different nominal values, itdoes not allow the granting of multiple voting rights per share, or shareswith the same nominal value, but different voting power. 689 In contrast, theGmbH can legally issue shares of the same nominal value, but withdifferent voting power according to a number of legal scholars. 690The right to vote encompasses the right to vote for resolutions on all mattersthat fall within the powers of the general meeting as defined by law and thearticles of association and to elect the board members and the auditors. 691As shareholders of a stock corporation, PEMIs may exercise their votingrights freely to best serve their interests. 692 Swiss law governing stockcorporations does not mandate the shareholders to abstain from voting incases of conflicts of interest. In a GmbH, members, in principle, alsoexercise their voting rights freely. 693 Other than the shareholders in a stockcorporation, they are, however, bound by a duty of loyalty. 694 The GmbHmembers are obliged to consent to pressing resolutions in the company’sinterest if the resolutions are not unreasonable. 695 Moreover, GmbHmembers, principally entitled to voting under Swiss corporate law, mustabstain from voting concerning certain resolutions in which conflicts ofinterest between the company and the affected members typically arise. 696Legal scholars continue to debate whether members have a duty to abstainfrom voting in cases of conflicts of interest other than the conflictsenumerated in the law. 697 PEMIs may vote in person or by proxy; the proxy685CO 692 II. With respect to the GmbH, CO 806 I sentence 2.686See Section IV.D.3.3.1.687See Section IV.D.3.3.2. Not possible in the GmbH, see FN 832.688See Section IV.D.3.3.3.689See FN 758.690Ibid.691See BÖCKLI, Aktienrecht, § 12, N 134; SCHAAD, Basler Kommentar, CO 689, N 20. In aGmbH, the second element only applies if the articles of association provide that the meetingof members elects the managing officers.692See Section IV.D.4.1.693See NATER, p. 29.694See Section IV.D.4.1 and FN 1210.695See KÖHLER, p. 289; NATER, p. 102.696For such resolutions, see FN 1216.697See TRUFFER/DUBS, Basler Kommentar, CO 806a, N 2 (concluding from CO 806a e contrariothat the member must not be excluded from voting with regard to any other matter);NUSSBAUM/SANWALD/SCHEIDEGGER, CO 806a, N 4; JANGGEN/BECKER, Berner Kommentar,CO 808, N 16; BÖCKLI, GmbH-Recht, 26. In contrast, finding that the articles of associationmay stipulate further situations in which the members are excluded from voting, areSIFFERT/FISCHER/PETRIN, CO 806a, N 6; HANDSCHIN/TRUNIGER, § 13, N 75, KÜNG/CAMP,122