UK: Major Reform Of The Luxembourg Company Law: What's New?

Last Updated: 27 July 2016
Article by Gérard Maîtrejean, Delphine Tempé and Mathilde Lattard

Bill 5730 amending the Luxembourg Company Law (the Bill of Law n°5730 amending the law of 10 August 1915 on commercial companies, the Civil Code and the law of 19 December 2002 on the register of commerce and companies and the accounting and annual accounts of undertakings) was voted by the Luxembourg Parliament yesterday, 13 July 2016. Subject to an exemption from a second vote granted by the Council of State (Conseil d'Etat), the new law is expected to enter into force in August 2016.

The new law offers more contractual freedom to shareholders, while providing greater legal certainty for all parties.

Below is a summary of the key changes to the Company Law. We are at your disposal to advise you on the amendments to be made to your current articles of association and to incorporate your new companies in accordance with the new law.

Grandfathering period: 24 months

The new law shall apply to any companies incorporated after its entry into force.
Companies in existence before the new law's entry into force shall have 24 months to adapt their articles of association. Laws and regulations in force prior to the new law shall continue to apply to existing companies in respect of the provisions of their articles of association which are not compliant with the new law. However, for those provisions of the articles of association which are compliant with the new law, the new law shall be applicable immediately.

Key modifications of the Civil Code:

  • Determination of the respective rights of the bareowner and the usufructuary in case of a strip of shares: The new rules of the Civil Code apply to every civil and commercial company; furthermore certain specific rules on this subject have been introduced into the Luxembourg Company Law,
  • Recognition of tracking shares: Tracking shares currently used will now be recognized as valid.
  • Recognition of the "conventions de portage" in the form of put/call option agreements: Agreements, where shareholders organise the transfer or acquisition of shares, are no longer considered to be contrary to certain provisions of public order.
  • Consecration of the dissolution-confusion: This applies in cases where all the shares are held by a single shareholder.

Key modifications of the Luxembourg Company Law:

  • New type of company: The amendment introduces the "société par actions simplifiée" (S.A.S.) which operates mostly on a contractual basis. The new S.A.S. will not be able to proceed to a public issuance of shares.
  • Issue of bonds: Any type of commercial company can make a public issue of bonds and proceed with the listing of bonds.
  • New rules in respect of the transformation of companies.

Key modifications regarding public limited liability companies ("S.A."):

Most of these key modifications will also apply to corporate partnerships limited by shares.


  • Minimum share capital: € 30,000
  • Issuance of shares below par value of the existing shares is permitted.
  • Shares with different nominal values are permitted.
  • Issuance of free shares to staff members is permitted.
  • Conversion of convertible bonds, contribution of claims by set-off and incorporation of any type of reserves to the share capital shall be considered as a contribution in cash, not requiring an auditor's report.
  • Limitations for issuance of shares without voting rights have been waived. However, the financial rights shall be stated in the articles of association.
  • Shares without voting rights shall recover their voting right when the resolutions of the general meeting amend their rights.

Transfer of shares:

  •  Restrictions on transfer of shares and founder shares are permitted.

Management and the holding of meetings:

  • The Board of Directors can create committees.
  • The law introduces an executive committee or managing director as a new corporate body.
  • Convening procedures have been simplified.
  • There are new rules on conflict of interest.
  • The management body is authorised to transfer the registered office anywhere in the Grand-Duchy of Luxembourg.
  • The management body shall issue a report in case of losses which reduce the net assets below half of the share capital of the company (waiver admitted if approved unanimously).

Shareholders and general meetings:

  • New convening formalities have been introduced.
  • General meetings held by videoconference are deemed to be held at the registered office of the company.
  • Unanimous consent is not required for the change of nationality, which requires a quorum and majority vote for the amendment of the articles of association.
  • The suspension of voting rights for defaulting shareholders can be instigated by the company or by a waiver of the shareholders themselves.
  • The amendment creates an actio mandati for the minority shareholders representing at least 10% of the share capital.

Key modifications regarding private limited liability companies ("S.àr.l."):


  • Minimum share capital: € 12,000
  • Units may have different nominal values.
  • Redeemable shares forming part of the share capital are permitted.
  • Profit shares not forming part of the share capital are permitted.
  • Sweat equity contributions are permitted without external revision.
  • Authorised share capital is permitted.
  • Public issuance and listing of bonds are permitted.
  • Interim distribution by managers is permitted.


  • Day-to-day managers are permitted.
  • Written resolutions and attendance at board meetings via video-conference are permitted if provided for in the articles of association.
  • Managers are subject to conflict of interest and confidentiality rules, similar to those applying to the directors of a public limited liability company.
  • Managers are authorised to transfer the registered office anywhere in the Grand-Duchy of Luxembourg.

Transfer of shares:

  • It will be possible to reduce the agreement of three quarters of the share capital to half of the share capital. The law also introduces a new procedure in case of refusal, to ensure that the transferor will not be prevented from proceeding with the transfer.

Shareholders and general meetings:

  • The maximum number of shareholders is now 100 and there is a statutory procedure in case the threshold is reached.
  • General meetings of shareholders are not obligatory where the number of shareholders does not exceed 60.
  • Written resolutions and resolutions via video-conference and by correspondence are permitted if provided for in the articles of association.
  • Headcount is no longer a condition for the Extraordinary General Meeting which shall be adopted by shareholders representing three quarters of the share capital.
  • Unanimous consent is not required for the change of nationality, which requires a quorum and majority vote for the amendment of the articles of association.
  • Voting arrangements are legally permitted if certain statutory conditions are met. The suspension of voting rights for defaulting shareholders can be instigated by the company or by a waiver of the shareholders themselves.

Dentons is the world's first polycentric global law firm. A top 20 firm on the Acritas 2015 Global Elite Brand Index, the Firm is committed to challenging the status quo in delivering consistent and uncompromising quality and value in new and inventive ways. Driven to provide clients a competitive edge, and connected to the communities where its clients want to do business, Dentons knows that understanding local cultures is crucial to successfully completing a deal, resolving a dispute or solving a business challenge. Now the world's largest law firm, Dentons' global team builds agile, tailored solutions to meet the local, national and global needs of private and public clients of any size in more than 125 locations serving 50-plus countries.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
6 Sep 2018, Business Breakfast, Glasgow, UK

Decarbonising our heat is a key component of The Scottish Energy Strategy and an essential piece of the complex matrix we must tackle if we are to meet our climate change obligations.

11 Sep 2018, Business Breakfast, Milton Keynes, UK

Join us for our next development breakfast round table event reflecting on the on-going planning discussion regarding the Oxford-Cambridge corridor and helping you consider how best to cash in on the exciting opportunities by considering the benefits of promotion and option agreements.

20 Sep 2018, Seminar, London, UK

Environmental regulation and liability have risen up the boardroom agenda over the past decade. Recent changes to environmental sentencing have brought this area of risk even more into focus.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions