Luxembourg’s reform bill includes changes to shareholder meetings, facilitating the obligatory process.
Luxembourg’s reform bill, which has been in place since July 2016 and modernises the 1915 Companies Act, refers to changes in shareholder meetings, facilitating the obligatory process.
- A change of the articles of a S.à r.l. no longer requires double majority of share capital and number of shareholders, only (qualified) majority of share capital (art. 199)
- Approval of the transfer of shares is also no longer subject to approval of the majority of shareholders, just to 75% of share capital; the procedure in case of refusal of approval has been updated (art. 189)
- Voting right may be suspended by the Board in case of breach of articles or subscription agreement (art. 67(8) for S.A., art. 195 for S.à r.l.)
- Shareholder meetings are mandatory for S.à r.l. with more than 60 shareholders instead of 25 (art. 193)
- Date of the annual general meeting needs not be mentioned in the articles
- If the company has only registered shares, convening notices may be sent by any means of communication instead of registered mail; this includes convening by e-mail (art. 70bis), although this might be difficult to prove if the observation of convening procedure is contested
- Convening notices for companies with (partly) bearer shares need to be published only once 15 days ahead of the meeting in the usual form instead of twice with 8 day intervals
- Procedure for annulation of shareholder resolutions fixed in new art. 12septies
*All references to articles mentioned above are references to the law of 10 August 1915 unless expressly mentioned.
Removing the need to obtain a majority of shareholders next to a majority of the share capital reduces the risk of minority shareholders blocking decisions. The new rules on convening shareholders meeting will allow a more flexible preparation in line with the fast pace of today’s business world.
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This is part 3 in a series of articles by TMF Luxembourg experts on changes in the Grand Duchy’s company law. Read part 1 and part 2 here.
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