The Act of 10 August 2016 modernising Luxembourg company law and amending the Act of 10 August 1915 on commercial companies (the “Act”) modifies certain rules with respect to the calling and holding of general meetings of shareholders of an S.A. and an S.à r.l.
The new rules are intended to facilitate the calling and holding of general meetings for both the S.A. and the S.à r.l. by ensuring more flexibility and fewer formalities. The Act formally extends to the S.à r.l. certain practices that were already applicable to the S.A.
1. Important changes for the S.A.
The Act abolishes the requirement that a date and time for an S.A.’s annual general meeting of shareholders must be specified in its articles of association. The annual general meeting of shareholders of an S.A. may now be held anywhere in the Grand-Duchy of Luxembourg, at the date and time determined by the board of directors, provided the meeting is held within 6 months from the close of the S.A.’s financial year. Furthermore, the period during which documents must be made available at the company’s registered office prior to the annual general meeting has been shortened from 15 to 8 calendar days.
The convocation formalities have been streamlined, as well, and only one publication in the Recueil électronique des sociétés et associations and a Luxembourg newspaper is now required, at least 15 calendar days prior to the meeting, rather than two notices published at an interval of 8 calendar days as was previously the case.
Furthermore, the Act expressly provides that publication of a notice is not required if all of the company’s shareholders are registered. In this case, the shareholders can be called to the meeting by way of a notice sent at least 8 calendar days prior thereto by registered letter or any other means, such as e-mail, to shareholders that have individually agreed to such means of communication.
Certain provisions of the Act codify pre-existing practices, for example the requirement that an attendance list must be drawn up at each meeting of shareholders and the clarification that meetings held by electronic means, such as video conference, are deemed to take place at the company’s registered office.
2. Important changes for the S.à r.l.
General meetings of shareholders of an S.à r.l. used to be mandatory if the company had more than 25 shareholders. This threshold has now been raised to 60. The Act further specifies that a general meeting of shareholders must be held to amend the articles of association. Each time a general meeting is held, an attendance list must be drawn up.
As is the case with the S.A., general meetings of shareholders of an S.à r.l. may now be held by alternative means of communication: if the articles of association so provide, shareholders may participate in a meeting by video conference or other means of telecommunication and may vote using voting forms.
An important change introduced by the Act with respect to the S.à r.l. is the abolishment of the so-called “double majority” whereby amendments to the articles had to be adopted by (i) a majority of shareholders in number (ii) representing at least 75% of the company’s share capital. Now, amendments may be adopted by shareholders representing at least 75% of the share capital even if these shareholders do not constitute a majority in number (except in the case of winding-up and liquidation, for which double majority applies).
This newsflash forms part of a series which aims to provide insight into certain changes introduced by the Act of 10 August 2016. For further information and a general overview of the amendments please refer to our earlier newsflash “Modernisation of Luxembourg Company Law – What’s new?“.
Compliments of Nauta Dutilh , a member of the EACCNY