Introductory notes
On 26 February 2025, the Law of 17 February 2025 (the “Law”) transposing in the Grand Duchy of Luxembourg Directive (EU) 2019/2121 of the European Parliament and the Council of 27 November 2019 on cross-border conversions, mergers and divisions (the “Mobility Directive”) was published in the Mémorial A n. 67. It will enter into force on 2 March 2025.
As had already been noted at the time of the issuance of its first version in July 2022 (please see the description provided in BSP’s original Newsflash), the Law shall overhaul the legal procedures relating to mergers and divisions contained in title 10 of the law of 10 August 1915 regarding commercial companies, as amended (the “Company Law“) and introduce a new regime regarding cross-border conversions. While the Mobility Directive should have been transposed by 31 January 2023, the lengthy transposition, common to other member states, may attest to the complexity of the reform of this subject matter and the hesitation of national lawmakers as to “revolutionizing” the merger rules.
Key changes from the initial draft Law
The number of changes in the Law with respect to its initial version in July 2022 is minimal and essentially follows the bulk of the amendments proposed, on 26 November 2024, by the Parliament’s justice commission (Commission de la justice) incorporating certain findings previously submitted by Luxembourg’s Conseil d’Etat.
These are largely based on the comments made by other relevant actors for the Luxembourg marketplace, notably those of the notaries’ council (Chambre des notaires) and the Luxembourg Bar (Conseil de l’ordre des avocats du Barreau de Luxembourg), in an attempt to ensure a more appropriate definition of the legal terms employed therein and enhance the internal consistency and precision of the rules. In turn, this effort is expected to minimise the impact of the provisions of the Draft Law on the Company Law.
The most relevant change appears to be the removal of the provisions relating to special limited partnerships (sociétés en commandite spéciale) from the Law. Following advice from the Luxembourg Bar, it ultimately has been preferred not to extend the new European cross-border merger, division and conversion regime to this type of partnership, thereby avoiding any risk of affecting the nature of special limited partnerships, which do not enjoy legal personality and have specific reorganisation regimes governed by specific rules.
Applicability and transitional provisions
As regards its applicability, the Law will only apply to mergers, divisions and conversions for which the relevant restructuring plan is published on the first day of the month following the date on which the new law comes into effect (i.e. 1 April 2025). Therefore, the current legal rules will remain applicable to the steps relevant for restructuring plans having been published beforehand.
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