Grand Ducal Regulation of 20 March 2020

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Grand Ducal Regulation of 20 March 2020: Measures concerning company meetings

24 March 2020

Regulatory News Alert

Context and objectives

On Friday 20 March 2020, a Grand Ducal Regulation dealing with the introduction of special rules and measures governing the organization of shareholder, Board of Directors, or other supervisory and management body meetings was issued, published in the Official Journal of the Grand Duchy of Luxembourg, and immediately implemented into Luxembourg law.

For shareholder meetings, a company may, notwithstanding any provision to the contrary in the articles of incorporation, hold any general meeting exclusively in a digital form and without a physical meeting. It may require that shareholders and any other meeting participants exercise their rights:

  1. by a remote vote in writing or in an electronic form provided that the full text of the resolutions or decisions to take will have been published or communicated to them; or
  2. by appointing a special proxy chosen by the company; or 
  3. by videoconference or other means of telecommunication allowing the identification of all participants. 

Shareholders or partners who participate by such means are deemed to be present for the calculation of the quorum and the majority at this meeting, and is applicable to the meeting of bondholders too.

For Board of Directors meetings, and other managers meetings, notwithstanding anything to the contrary in the articles of incorporation, a meeting may be held and/or resolutions may be adopted by way of:

  1. written circular resolutions; or 
  2. videoconference or other means of telecommunication allowing the identification of the participants. 

Participants who take part by such means are deemed to be present for the determination of the quorum and the majority at this meeting.

Notwithstanding any provision to the contrary in the articles of incorporation, any company is authorized to call its annual general meeting later than the following dates:

  1. a date which is within a period of six months after the end of its financial year; or 
  2. a date which falls within a period up to June 30, 2020

The company is empowered to take this decision for any meeting called for 30 June 2020 at the latest. Any company which has already convened its meeting and which would take this decision, must publish it and if necessary, notify its shareholders, partners, or other participants in the form in which it had convened this meeting or by publication on its website at the latest on the date falling three business days before the convened meeting.

The Grand Ducal Regulation of 20 March 2020 is available in French at this link: http://www.legilux.public.lu/eli/etat/leg/rgd/2020/03/20/a171/jo

Although these practical measures helping companies to manage their corporate governance obligations are welcomed, it is important to look at those measures while also looking at the substance requirements applicable from foreign and local tax purposes. Maintenance of corporate aspects should be analyzed on a case-by-case basis and evaluated based on various criteria including tax considerations.

It is worth mentioning that countries including Luxembourg are rapidly voting measures to help businesses to adapt in this context. In this respect, Luxembourg has already adopted various tax and social security payment deferrals and is in the process of proposing a financial aid package for SMEs to manage their cash flows.


How can Deloitte help?

Deloitte can help you prepare and facilitate the organization of these meeting, design procedures, and generally help your company become more digital.

Deloitte’s Regulatory Watch Kaleidoscope service helps you stay ahead of the regulatory curve to better manage and plan upcoming regulations.

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