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.

Impact

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.