Context
Measures relating to holding of meetings and other legal persons, in the context of the pandemic of the Covid-19, have been initially introduced by the Grand-Ducal Regulation of 20 March 2020.
These measures were extended several times; by the law of 20 June 2020, the law of 23 September 2020 and most recently by the law of 25 November 2020 (the “Corporate COVID Laws”).
As it stands, these legal measures shall apply until 30 June 2021.
Legislative framework
The holding of general meetings of shareholders and of meetings of the other governing organs of Luxembourg companies are predominantly governed by the law of 10 August 1915 concerning commercial companies, as amended (the “Luxembourg Company Law”).
While the Luxembourg Company Law and the articles of many Luxembourg companies allowed some degree of remote participation in meetings, it was de rigueur before the current health crisis, whether to ensure the proper functioning of companies (i.e. to comply with the applicable legal requirements) or merely in the interests of good corporate governance, that general meetings and meetings of other governing bodies were generally held in a physical manner.
The COVID-19 pandemic environment required however that exceptional measures be formally enacted in legislation regarding the holding of meetings without physical presence. Indeed, a company that would hold a general meeting by videoconference or alternative means, or even written resolutions, when its articles of association did not provide for such possibilities, would potentially expose its directors or officers to liability. The legislative intervention through the Corporate COVID Laws was essential to ensure legal certainty.
The law of 25 November 2020 and general meetings
With the adoption of the law of 25 November 2020, the possibility for companies to hold a general meeting in a non-physical manner, even in the absence of such provisions in the articles of association, is extended until 30 June 2021. In that regard, companies may require their shareholders, members or any other persons participating in the meeting to attend the meeting and exercise their rights; (1) by remote voting (in writing or in electronic form) provided that the full text of the resolutions/decisions to be taken has been duly transmitted to them; (2) by videoconference or by any other means of telecommunication which allows their identification; or (3) through a proxyholder nominated by the Company. It is important to note that, if a shareholder/member appoints a proxyholder which is different from the one nominated by the Company, such proxyholder may only participate in the general meeting through one of the means described under points (1) to (3) above.
Given the usual legal provisions governing general meetings, it was of paramount importance to maintain the legal fiction by virtue of which each shareholder participating in the general meeting as described above shall be deemed to be present for the purpose of calculating the quorum and the majority at that meeting.
The above described legal measures also apply to general meetings of bondholders.
The law of 25 November 2020 and management bodies
Following the same logic, and without prejudice to the fact that the articles of association are not required to expressly provide for the possibility, boards of directors and other corporate governance bodies may also duly hold meetings without any physical presence, in a similar manner as provided for general meetings.
Pursuant to the law of 25 November 2020, members of such corporate organs who participate in meetings through the above-mentioned exceptional means shall be deemed present for calculating the quorum and the majority.
Developments in the on-going pandemic environment will dictate whether the exceptional legal measures for non-physical meetings will have to be extended even further, after 30 June 2021.
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