Shareholder meetings and meetings of management bodies may be held exclusively in digital form
Based on article 32(4) of the Luxembourg Constitution, our Government has on 18 March 2020 declared a state of emergency for a period of three months. This decision will have to be confirmed by Parliament within the next ten days.
Under emergency powers granted by the Constitution, the Government enacted by way of decree a number of temporary measures. Among these are rules allowing all Luxembourg companies, private or listed, to hold their shareholder or partner meetings (including the annual general meeting) without any participant attending in person. The same rule applies to meetings of management bodies such as boards of directors, boards of managers and supervisory boards.
For shareholder meetings, companies may require that shareholders and all other participants participate in the meeting and exercise their rights exclusively:
- by a vote in writing or in electronic format (provided that the full text of the resolutions have been published or otherwise provided to the participants); or
- by appointing a special proxy chosen by the company; or
- by video conference or any other means of telecommunication allowing the identification of participants.
For meetings of boards of directors, boards of managers, supervisory boards or other bodies of a company, the meeting may be held and/or resolutions may be adopted by way of:
- written circular resolutions; or
- video conference or any other means of telecommunications allowing the identification of participants.
Participants through such means will be considered present for the purposes of determining the quorum and majorities.
The above rules apply regardless of any contrary provision in the articles of association of the relevant company and regardless of the number of participants.
Companies are further allowed, irrespective of any contrary provisions in their articles of association, to convene their annual general meeting at the later of the following two dates:
- 1. the date falling six months after the end of its financial year; and
- 2. a date within a period ending 30 June 2020.
The above provisions apply to any meeting convened on or prior to 30 June 2020. Even if a company has already convened its general meeting at the date of the Government decree, it may opt for any of the above measures by publishing it and notifying its shareholders at the latest on the date falling three business days before the convened meeting.
The above measures have been prompted by the Covid 19 crisis in order to allow Luxembourg companies to function normally and hold their meetings without physical presence to prevent the spreading of the virus at such meetings while avoiding any breach of the provisions of their articles of incorporation or of the law.
The Grand Ducal Regulation of 20th March 2020 is available under this link
A translation is available below:
Art. 1. Holding of meetings in companies and in other legal entities
(1) A company may, notwithstanding any provision to the contrary in the articles, regardless of the expected number of participants in its general meeting, hold any general meeting without a physical meeting, and require its shareholders or members and other participants in the meeting to attend the meeting and exercise their rights exclusively:
1° by voting from a remote location in writing or electronically, provided that the full text of the resolutions or decisions to be taken has been published or communicated to them;
2° through a proxy holder appointed by the company; or
3° by video conference or other telecommunication means permitting their identification.
In case a shareholder or member or other participant has appointed a proxy holder other than the one referred to in point 2° above in accordance with article 8 of the law of 24 May 2011 on the exercise of certain rights of shareholders in general meetings of listed companies, as amended, such proxy holder may only participate in the meeting in the manners provided for in points 1°, 2° and 3° above.
The shareholders or members participating by way of such means shall be deemed to be present for the calculation of quorum and majority at such meeting.
This paragraph is applicable to a meeting of bondholders.
(2) Notwithstanding any provision to the contrary in the articles, the other corporate bodies of any company may hold their meetings without a physical meeting:
1° by written circular resolutions; or
2° by video conference or other telecommunication means permitting the identification of the members of the corporate body participating in the meeting.
Members of these corporate bodies participating by such means are deemed present for the calculation of quorum and majority.
(3) Notwithstanding any provision to the contrary in the articles, a company is authorised to convene its annual general meeting for the later of the following dates: (i) a date within six months after the end of its financial year and (ii) a date within a period ending 30 June 2020.
(4) The company is authorised to take this decision for any meeting convened for 30 June 2020 at the latest. Any company which has already convened its meeting and which takes such a decision shall publish it and, where applicable, notify it to its shareholders or members or other participants in the form in which it had convened such meeting or by publication on its website no later than the third business day before the meeting.
(5) The present article applies mutatis mutandis to all other legal entities.
The present regulation shall enter into force on the day of its publication in the Official Journal of the Grand Duchy of Luxembourg1.
The Minister of Justice is responsible for the implementation of the present regulation which shall be published in the Official Journal of the Grand Duchy of Luxembourg.
1. The regulation was published on 20th March 2020.
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.