On 19 July 2023, the Luxembourg Parliament voted a new law aiming to rectify certain inconsistencies and uncertainties which arose from the 2016 reform of the Luxembourg Law of 10 August 1915 on commercial companies, as amended (the "Company Law"). This law addresses and puts an end to certain discussions between practitioners in the marketplace without making substantial changes.
What are the key amendments to bear in mind?
- Suspended/waived voting rights and calculation of quorum/majority
Since the 2016 reform, the Company Law has expressly provided that any shareholder of an SA or an SARL may waive his voting rights and that the management body may suspend them under certain circumstances. However, the question of whether such shares should be included in the calculation of the quorum and majority remained unanswered.
This has now been solved: the shares for which voting rights are suspended or waived shall not be taken into account. Similarly, redeemed shares of an SARL (held in treasury) shall not be counted in the quorum and majority thresholds.
- Clerical errors in the text applying to a single-member SARL
As a result of cross-referencing, a number of inconsistencies had appeared in the Company Law. It has now been clarified that the articles of association of a single-member SARL may provide, among other things, (i) for general meetings of shareholders to be held remotely, (ii) for the managers to be able to transfer the registered office inside the same municipality and (iii) for an authorised share capital.
- Majority approving liquidation in an SARL
Prior to 2016, a double majority was required to amend the articles of association of an SARL. This double majority was removed from the Company Law, but the legislator forgot to transpose the measure to the provisions applicable to liquidations. This point has been rectified so that the same majority thresholds apply for a liquidation as for an amendment to the articles of association.
- Actions against directors in an SAS
The president and executive officers of an SAS are now subject to the 5-year statute of limitations just like directors of an SA and managers of an SARL.
These changes will come into effect on the fourth day following the publication of the new law in the Luxembourg Memorial, probably in July or August 2023.
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.
