The Luxembourg Act of 10 August 1915 on commercial companies (the "Act",) as recently amended by the Act of 10 August 2016 modernising Luxembourg company law, now contains specific rules on the conversion of companies with legal personality from one corporate form to another. The main purpose of the new provisions is to protect shareholders, in particular from a potential increase in their obligations, and safeguard the rights of third parties.

New Section XV quarter (Articles 308bis-15 to 308bis-26) has been inserted in the Act and provides detailed rules on changes of corporate form. These rules apply to the conversion of civil and commercial companies with legal personality from one corporate form, to another, with certain exceptions for European companies (société européenne) and simplified private limited-liability companies (société à responsabilité limitée simplifiée).

The new rules introduce qualified majorities for certain shareholder decisions, specific types of liability as well as rights for shareholders to receive information about the change of corporate form. In general, the new rules can be summarized as follows:

1. Shareholder consent

A proposed change of corporate form is subject to shareholder approval by the quorum and majority required to amend the articles of the relevant corporate form, except in certain cases where unanimous consent is required (such as for the conversion of a public limited company or SA into an unlimited liability cooperative (société coopérative à responsabilité illimitée)).

2. Statement of assets and liabilities

A statement summarising the company's assets and liabilities, dated within 6 months from the shareholder decision approving the conversion, is required, unless (i) the latest annual accounts relate to a financial year that closed during this period and contain such a statement or (ii) in certain cases provided for by the Act, all shareholders and the holders of other securities with voting rights have unanimously waived this requirement.

3. Amendment of the articles of association

The company's articles of association must be amended to reflect the new corporate form. The applicable quorum and majority are those required to approve the conversion.

4. Report by a certified auditor (réviseur d'entreprises)

If a report on the company's net asset value is required by the Act, the absence of such a report shall render the shareholders' decisions null and void. The conclusions of the report must also appear in the notarial instrument enacting the decision approving the change of corporate form.

When a private limited-liability company (société à responsabilité limitée or SàRL) is converted into a public limited company (société anonyme or SA), a valuation report by a certified auditor (réviseur d'entreprises) is required if, during the two-year period preceding conversion, the SàRL received a contribution in kind or quasi-contribution for which no valuation report by a certified auditor was prepared and that such a report would have been required in an SA.

5. Notarial instrument and publication

In order to be valid, the change of corporate form must be approved by way of a shareholder resolution that takes the form of a notarial instrument, except where the corporate forms involved in the conversion do not require a notarial instrument for incorporation.

The notarized instrument is then filed with the Luxembourg Trade and Companies Register and published in the Recueil Electronique des Sociétés et Associations. The same applies to the amended articles, which may be filed either in full or by extract depending on the type of new corporate form.