New rules due to COVID-19: holding of virtual shareholder and board meetings
While, due to the current COVID-19 epidemic affecting all European states, most of the latter are advocating the confinement of their population preventing any physical meeting from taking place within companies, the responsibility of the directors or managers for the proper running of the companies remains unchanged.
In order to ensure the good governance of the company and adequate substance in the decision-making process, directors are invited to call meetings to meet in person so as to allow face-to-face discussions, deliberations and votes on ongoing corporate business.
But how can the obligations incumbent to the board of directors/managers still be met while the Luxembourg government as well as most of the governments of the European countries declared recently a state of emergency, restricting drastically freedom of movement within the national and EU territories?
While most of the Luxembourg companies adopt a financial year ending on December 31, the directors and managers have to – if not already done – convene the annual general meeting of shareholders approving the accounts for the financial year 2019 in the coming weeks to be held – in most of the cases – at the registered office of the company.
Aware of this exceptional situation, the Luxembourg Government issued a Grand Ducal regulation dated March 20, 2020 introducing more flexible measures to facilitate the holding of meetings in companies in digital form despite any provision of the articles of association providing for the contrary or restricting its use (the “Regulation”), in addition to the flexibility and options already offered by the Luxembourg company law (the “Company Law”).
The Regulation applies therefore to all Luxembourg companies (i) regardless of their legal forms and therefore (but without being limited) to private limited companies (sociétés à responsabilité limitée), public limited companies (sociétés anonymes), partnerships (sociétés en commandite) or associations without any aim for profit (associations sans but lucratif) and (ii) regardless of any legal provision or statutory provisions of their bylaws restricting or prohibiting such meetings to be held without physical attendance.
Holding of meetings
General meetings of shareholders – no mandatory physical meetings
In accordance with the Regulation, a Luxembourg company may now hold any general meeting without a physical meeting despite any provision of the articles of association specifying otherwise and regardless of the number of participants at the meeting. Moreover, the company (acting through its management body) may even force its shareholders and other participants to participate and exercise their rights exclusively through the following means:
i. by a vote in writing or in electronic form, provided that the full text of the resolutions or decisions to be passed has been published or otherwise communicated to the participants; or
ii. by way of a proxy designated by the company; or
iii. by visioconference or any other means of telecommunication allowing the identification of the participants (such as conference calls).
Shareholders who participate at a meeting by such means are deemed present with regard to the rules of quorum and voting majorities applicable to such meeting.
These provisions are equally applicable to meetings of bondholders.
Thus, public limited companies (sociétés anonymes) held by several shareholders, which are generally legally and statutorily compelled to convene their shareholder’ general meetings physically to approve (for instance) their annual accounts or the replacement of a board member, can use (and even impose) the flexibility offered by the Regulation by having the annual accounts for the year 2019 approved by written resolutions of their shareholders.
Date of the annual general meeting approving the annual accounts
With respect to annual general meetings of shareholders to be held in 2020, the Regulation further authorizes any company, despite any contrary provision of its articles of association, to convene its annual general meeting at the latest at
i. a date that is within six months after the end of its financial year; or
ii. a date that is within a period ending on 30 June 2020.
The company has the right to take such a decision not only for any annual general meeting which should still be convened on or prior to 30 June 2020, but also for those meetings that have already been convened. In such latter case however, the company shall need to publish its decision and, where appropriate, notify it to its shareholders or other participants in the form in which it had convened the meeting or by publication on its website no later than three working days before the initially convened meeting.
Thus, as an example, a company whose articles of association still stipulate that the annual general meeting must be held on a fixed date may, exceptionally, have its financial accounts for the year 2019 approved at a meeting being convened on any other date provided that it is prior to (or on) 1st July 2020.
With regards to extraordinary general meetings of the shareholders of Luxembourg companies to be held in front of a notary (e.g. in case of amendment of their bylaws), it should be reminded that the shareholders do not need to be present at such meetings (which are still to be held physically in front of the notary) as they shall generally offered to grant proxy directly to the notary clerks so as to be represented.
Meetings of other corporate bodies, especially board of managers or directors
According to the Regulation and regardless of the articles of association of the company providing for the contrary (or in the absence of any specific statutory provisions), the same flexibility applies to meetings of all other corporate bodies such as the board of managers or directors of any Luxembourg companies, as well as to supervisory boards (if any) of public limited companies. Any such corporate bodies may hold their board meetings without a physical meeting:
i. by written/circular resolutions; or
ii. by videoconference or other means of telecommunication enabling the identification of the members participating in the meeting.
As for general meeting of shareholders, members of such bodies participating by such means are deemed present for the calculation of quorum and voting majorities. In accordance with the Company Law, it should be further reminded that such meeting shall generally be deemed to be held at the registered office of the company.
Extension of the period
for filing annual statements for the year 2019
In a communication of March 18, 2020, the Luxembourg Business Register took note of the current situation related to the COVID-19 pandemic by granting an additional administrative period of four months to file the annual accounts of the Luxembourg companies (regardless of the legal form of the company) i.e. until November 30, 2020. Therefore, potential penalties related to late filing of the financial accounts of any such companies are suspended until November 30, 2020.
 Règlement grand-ducal du 20 mars 2020 portant introduction de mesures concernant la tenue des réunions dans les sociétés et dans les autres personnes morales, Mémorial A, Journal officiel n°171 du 20 mars 2020.
 Luxembourg law of 10 August 1915 on commercial companies, as amended
 (Article 1 (1) of the Regulation)
 In case of a listed Luxembourg company: If a shareholder (or another participant) of a listed company has already appointed a proxy other than the person referred to in point (ii) above, such proxy may only participate in the meeting in the forms provided for in points (i), (ii) and (iii) above.
 (Article 1 (3) of the Regulation)
 (Article 1 (2) of the Regulation)
 Article 444-3 (1) of the Company Law