AGM Efficiency Unlocked: The Ultimate Compass for Luxembourg’s Governance Triumph

Annual General Meetings (AGMs) are pivotal for ensuring the smooth governance and transparency of companies. In Luxembourg, the regulations surrounding AGMs vary significantly based on the type of corporate structure. This blog post delves into the specifics of AGM requirements for different company types in Luxembourg, providing a clear, concise, and legally focused overview.

Private Limited Liability Company (Société à Responsabilité Limitée – S.à r.l.)

Meetings:

For S.à r.l.s, the necessity of holding general meetings depends on the number of shareholders:

• 60 or Fewer Shareholders: General meetings are not obligatory unless amendments to the articles of incorporation are proposed.
• More than 60 Shareholders: At least one annual shareholders’ meeting must be conducted within six months of the financial year-end to approve the annual accounts.

Quorum:

• Decisions require the approval of over half of the share capital unless otherwise specified in the articles of incorporation.
• If the initial quorum isn’t met, a second meeting can be called, where decisions can be adopted by a majority of the votes cast.

Public Limited Liability Company (Société Anonyme – S.A.)

Meetings:

• At least one general meeting must be held within six months after the financial year-end to approve the annual accounts.
• General meetings must elect a chairman, a secretary, and a scrutineer. The chairman oversees the meeting, the secretary records minutes, and the scrutineer counts votes.

Quorum:

• Decisions at shareholders’ meetings are valid if approved by the majority of the votes cast, provided that the majority of shareholders are present or represented.
• Amendments to the articles of association require at least half of the share capital to be represented at the meeting, and the favorable votes of at least 2/3 of the votes cast.
• Increases in shareholders’ commitments require unanimous agreement.

Special Limited Partnership (Société en Commandite Spéciale – SCSp)

Meetings:

The requirement for holding annual general partners’ meetings is not legally enforced. This means that partners are not obligated to convene such meetings on a yearly basis.

Quorum:

• Decisions are typically made by the favorable vote of the majority of the votes cast.
• Critical decisions such as amendments to core elements require a more substantial consensus, with at least three-quarters of the partnership interests needing to agree for the decision to be valid.

Convening General Meetings

If the articles of association do not specify the convening procedure, Luxembourg law mandates a default legal process:

• Notices and Agenda: Meeting notices must include the draft agenda and results from previous meetings.
• Shareholder Invitations: Invitations should encompass financial statements, lists of board members, management reports, etc., and be sent at least eight days before the meeting. Registered mail can be used for named shareholders.

Proxy and Voting Procedures

Shareholders can appoint proxies through written forms, which can be transmitted via various means. The Board of Directors may set a format for proxy forms and specify submission deadlines.

Documentation and Filing Requirements

Proper documentation and adherence to filing deadlines are critical:

• Approval of Financial Statements: The statutory annual accounts must be approved within six months after the financial year-end.
• Filing with Trade Register: Approved financial statements must be filed with the Trade Register within one month post-approval.

Failure to meet these deadlines can lead to severe legal consequences, including fines ranging from €500 to €25,000.

Auditor Requirements

The auditing requirements vary depending on the size and type of the company, for example:

• S.à r.l. with More Than 60 Shareholders: An internal auditor is mandatory.
• Thresholds for External Auditors: Companies exceeding two of the following thresholds need an external auditor:
  • Total balance sheet: EUR 4.4 million
  • Net turnover: EUR 8.8 million
  • Average number of employees: 50

Conclusion

Understanding and complying with AGM requirements in Luxembourg is essential for maintaining corporate governance and legal compliance. Whether you manage a private limited company, a public limited company, or a special limited partnership, knowing the specific obligations and procedures ensures that your company remains in good standing and avoids legal pitfalls.

For more detailed information and assistance, consider consulting legal professionals or utilizing legal tech solutions to streamline the AGM process, ensuring efficient and effective compliance with regulatory requirements. Additionally, leverage Klea’s extensive AGM expertise to adeptly navigate through the intricacies of these vital meetings, whether locally or globally. Dive into our comprehensive blog post titled Ready For The AGM In Romania? Your Ultimate Checklist! for tailored insights. We’re confident these resources will enrich your governance efforts.