COVID-19 - Luxembourg takes exceptional corporate governance measures

Update - 24 September 2020

Luxembourg parliament adopted a new law on 23 September 2020 to extend the temporary measures allowing for virtual meetings of corporate bodies. The new law will comes into effect on 1 October 2020 and will be effective until 31 December 2020.

As the coronavirus epidemic continues to have an impact on the corporate governance of companies and other legal entities the Luxembourg parliament has adopted a new law on 23 September 2020 to extend the measures allowing the companies and legal entities listed in the bill to hold their general meetings and other necessary meetings such as board meetings for example without physical presence until 31 December 2020.

On Friday, 20 March 2020, in response to the COVID-19 outbreak, a Grand Ducal Regulation introduced exceptional corporate governance measures to facilitate board and general meetings for all legal entities in the coming weeks (the 20/03/20 Regulation).

The 20/03/20 Regulation enables companies based in Luxembourg to convene such meetings by the following methods, even where these methods have not been provided for in the company’s articles of association.

Board meetings

Board meetings can now be convened non-physically, with participation via:

• circular, written resolutions; or
• videoconference or other telecommunication method that evidences identification.

Board members participating via such means are deemed to be present when establishing a quorum and a majority at such meetings.

General and bondholder meetings

General meetings of the shareholders or members, as applicable, and meetings of bondholders can now be convened non-physically, with participation via:

• written or electronic means, provided that the full text of the resolutions or decisions to be taken in such meeting have been published or communicated to the participants in advance;
• proxyholder, appointed by the company; or
• videoconference or other telecommunication method that evidences identification.

Importantly, proxyholders appointed by shareholders or members of the company, as applicable, may only participate by the methods set forth above.

Companies may proceed in the form described above for any meeting convened up to and including 30 June 2020. Shareholders or members of the company, as applicable, attending in the manner described above are deemed to be present or validly represented for a quorum and a majority at such meetings.

In line with the Luxembourg Business Registry’s recent announcement to extend the administration period for the filing of annual accounts by four months, exceptionally lifting the surcharge for late filings during this period, the 20/03/20 Regulation introduced an extension period for the convening of annual general meetings. This extension allows companies to convene their annual general meeting within the latter of the two following periods: (i) a date within six months after the end of that company’s financial year; or (ii) a date within the period ending 30 June 2020.

A company which has already convened its annual general meeting but has decided to take the decision to postpone such meeting, following the introduction of the extension mentioned above, must publish this postponement and, where applicable, notify the shareholders or members of that company, as applicable, or other participants to such meeting in the form in which it had originally convened that meeting, or by publication on its website, no later than the third business day before such meeting was due to take place.

Our corporate team in Luxembourg are ready to assist on the above, to facilitate this transition to non-physical meetings during these testing times.

More information on this topic and other measures taken to tackle the COVID-19 outbreak, including the use of e-signatures, can be found on our website.