Another part of Luxembourg's reform bill details changes to
the board of directors in respect to managers.
Part of Luxembourg's Companies Act reform bill of July 2016
details changes to the board of directors in respect to managers.
Changes are as follows:
The Board of a S.à r.l. may transfer its registered
office to another municipality if authorised in the articles
The corporate GP of an SCA does not need to appoint a permanent
representative (art. 107)
The Board of a S.à r.l. may delegate day-to-day
management to non-members (art. 191bis (3)); Board of an S.A. may
delegate to committees (art. 60-1), without touching the
responsibility of the directors
Conflicts of interest only in case of divergent patrimonial
interest; if the Board does not reach quorum due to abstention of
members with conflict of interest, it may submit the decision to
the shareholders (art. 57)
Going concern – revised art. 100 clarifies that
shareholders need to be convened if net assets fall below 50% resp.
25% of the share capital as a consequence of losses. The Board
needs to submit a report on the reasons for the loss and a proposal
to correct the situation if it proposes to continue the activities.
The shareholders may waive this report, but only unanimously. In
case of infraction, the members of the Board are personally liable
for an increase in losses (art. 100)
*All references to articles mentioned above are references to
the law of 10 August 1915 unless expressly mentioned.
The above changes clarify a number of questions which have a
direct or indirect impact on the liability of the legal
representatives of a Luxembourg company. The legislator has made it
clear that there is no need to expose an individual to the
unlimited and personal responsibility of a GP in an SCA, and that
the Board of Directors remains responsible even if the actual
management is delegated to committees which may include staff from
middle management. The additional requirement of a special report
to the shareholders in case of significant losses, and the direct
responsibility of the directors for any additional losses if this
report is not prepared or validly waived, should be one of the more
relevant changes introduced by the new law.
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.
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