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The healing effect in the commercial register

The special publicity and protective effects of the commercial register unfold only if you entered your company correctly. The law provides though a few exceptions in which an entry – despite a poor quality of the entry – are treated the same as a real entry.

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Societies required to register (e.g. corporations, limited liability and cooperative) obtain legal personality only upon entry in the commercial register. This is also called the constitutive effect. This only accounts for companies that were correctly entered into the register. However, there are some exceptions by law where a defective entry is treated in the same way as a real one. Through this healing effect the defective registered companies will still get the right of personality and they benefit from the publicity and protective effects of the commercial register.

Healing properties to corporate law

A specific exception we find in the Art. 643 para. 2 OR for AG’s. The AG receives legal personality by registration, even if the conditions for registration were not actually present. The AG is therefore, as a society, although there register entry has mistakes. By this though the defects still remain present and do not become irrelevant. They have to therefore be fixed later. Is it a serious defect, such as the disregard of legal or statutory provisions, the AG can even be resolved ex nunc (Art. 643 para. 3 OR).

This healing effect under Art. 643 OR is true not only for the AG, but also to the LLC (Art. 779 para. 2 OR) and the Cooperative. The Federal Court extended the healing effect on the process of raising the capital of an AG (BGE 102 Ib 24).

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