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The recent COVID-19 outbreak has imposed unprecedented confinement measures and social distancing on people in Europe and around the world. These measures have a direct impact on each of us.
The Luxembourg Government declared a state of emergency due to the COVID-19 crisis on 18 March 2020, in accordance with article 32(4) of the Luxembourg Constitution. This decision was confirmed and prolonged by the Parliament on 21 March 2020 for a period of three months.
The current situation has and will impact governance of companies and other legal entities. The Luxembourg Government and administrations have taken a number of immediate and temporary measures to help those companies to face the current situation.
On 20 March 2020, a Grand Ducal regulation introduced measures concerning the holding of meetings by companies and other legal entities (http://www.legilux.public.lu/eli/etat/leg/rgd/2020/03/20/a171/jo). In the context of the COVID-19 crisis, this Grand Ducal regulation derogates from the law of 10 August 1915 applicable to commercial companies, and is effective from 20 March 2020 until 30 June 2020, unless the state of emergency ends earlier.
This Grand Ducal regulation applies to all companies and other legal entities.
A. Shareholders’ meetings
A company may impose that at general meetings the shareholders’ rights may be exercised only via:
Circular resolutions are still prohibited for shareholders’ meetings for public limited liability companies and for private limited liability companies with more than sixty shareholders.
These measures are optional, but if a company decides to impose them, they are mandatory for the shareholders. Where a company is managed by a board of managers, it is for the latter to decide whether or not to impose these measures.
B. Meetings of boards of directors, boards of managers, supervisory boards or other bodies of a company
Such meetings may adopt resolutions by way of:
These measures are also merely optional, at least until another (future) state of emergency provision prohibits any physical meetings between managers in Luxembourg.
C. Date of the shareholders meetings
(i) Annual general meeting
Companies may convene their annual general meeting of shareholders, regardless of any contrary provisions in their articles of association, at the later of the following dates:
Companies may choose to impose the above measure for any general meetings scheduled to convene on or before 30 June 2020.
If a company’s financial year does not match the calendar year but starts in the second half of the calendar year and ends in the second half of the following calendar year (e.g., 1 October to 30 September of the following year), it is now possible to hold the annual general meeting on or before 30 June 2020, instead of a date on or before 30 March 2020.
Companies whose financial year runs in accordance with the calendar year, and whose articles of association do not impose an annual general meeting in a shorter period than the legal deadline, will not be impacted by this optional measure.
(ii) Annual general meeting already convened
Even if an annual general meeting has already been convened, a company may still opt for any of the above measures but shall publish a new convening notice and notify its shareholders in the form in which the meeting was initially convened, or by publication on its website. at least three business days before the convened meeting.
The Grand Ducal regulation of 20 March 2020 will help to facilitate corporate meetings during the confinement period. However, certain questions remain: