The law of 10 August 2016 modernising the law concerning commercial companies of 10 August 1915 and amending the Civil Code as well as the law of 19 December 2002 on the register of commerce and companies and the accounting and annual accounts of companies (the “Law”), entered into force on 23 August 2016. The Law is immediately applicable for all newly incorporated companies. Existing companies have been granted a period of 24 months to adapt their articles of association. The below is a summary of the main changes which affect private limited liability companies (“société à responsabilité limitée” (“S.àr.l.”)):

I.     Management

  • Introduction of the “board of managers” as a legal body of the company;
  • Registered office may be transferred in any other municipality by a decision of the managing body if authorized in the articles;
  • Introduction of day-to-day management;
  • Possibility to take circular resolutions expressly recognised;
  • Interim dividend mechanism;
  • Introduction of conflict of interest rules .

II.    Share Capital

  • Minimum share capital reduced to EUR 12,000;
  • No requirement  to indicate the share capital in corporate documents;
  • Possibility to issue beneficiary shares and sweat equity;
  • Introduction of authorized share capital;
  • Possibility to proceed to contribution in the form of industry and to receive shares without par value;
  • Contribution in kind mechanism expressly recognised.

III.  Shareholding / Interest Holding

  • Issue of convertible instruments to non-shareholders subject to the approval of the existing shareholders;
  • Issue of bonds to the public;
  • Warrants/convertible bonds and their conversion into shares are recognized and regulated;
  • Possibility to issue tracking shares and redeemable shares;
  • Clarification of division of ownership structure of shares (bare-ownership and usufructus);
  • New share transfer procedure (e.g.: the possibility to decrease the majority to 50% in order to transfer the shares to non-shareholders);
  • Maximum number of shareholders increased to 100;
  • Validity of put options;
  • Possibility to suspend voting rights;
  • Possibility to put in place voting arrangements / rights under certain circumstances;
  • Possibility for written questions from minority shareholders (10%) to the managing body;
  • New rules for modifications of the articles of association and change of nationality;
  • Meeting procedures for shareholders ;
  • Simplified liquidation procedure.

We would be happy to assist you with reviewing and upgrading your critical legal documentation (e.g. articles of association or shareholders' agreements) and carry out an assessment to determine which provisions may need to be re-negotiated between shareholders or with your investors.

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