The bills follow the declaration of the state of crisis of 18 March 2020 and the measures taken in the context of the fight against Covid-19 and are intended to introduce certain temporary derogations from the provisions of company law and company accounting law.
The draft laws aim (i) to extend the means used to hold meetings in companies and other legal entities and (ii) to extend the filing and publishing deadline for annual accounts with the Luxembourg Trade and Companies Register (and incidentally to extend the legal deadline for approving annual accounts).
I. Bill 7566 extending the measures concerning the holding of meetings in companies and other legal persons
The Grand-Ducal Regulation of 20 March 2020 introducing measures concerning the holding of meetings in companies and other legal entities has provided for emergency measures enabling them to hold their general meetings and other essential meetings without having to be physically present (hereinafter the “Regulation“).
In order to ensure immediate governance measures enabling legal entities to hold their meetings without physical presence due to unavoidable health risks, the said Regulation was made in the context of the state of crisis, on the basis of Article 32, paragraph 4, of the Constitution. However, according to the same article, this Regulation will cease to have effect at the latest at the end of the state of crisis.
In other words, a general meeting validly convened on the basis of the Regulation at a date after the end of the state of crisis may no longer be able to benefit from the measures of the Regulation. However, a company that would hold a general meeting by videoconference or written resolutions when the articles of association do not provide for this, exposes its directors or managers to risks liability for violation of the articles of association or the law, so it is essential to provide legal certainty for such situations by means of a law.
In view of the above, the primary objective of the bill is to extend the effects of the Regulation with regard to the means used to hold general meetings and other type of meetings of the bodies of legal entities at a date after the end of the state of crisis and for which the convocations were issued at the latest on the date of the end of the state of crisis.
Secondly, the bill allows the same means to be used for meetings held on a date held within the extended three-month period provided for in article 3 of Bill 7541 as a result of the parliamentary amendments of 8 April 2020 (see below) i.e. in principle until 30 September 2020 for the financial years ending 31 December 2019.
II. Bill 7541 extending the deadlines for filing and publication of annual accounts, consolidated accounts and related reports during a state of crisis
In the current crisis context, maintaining the usual filing and publication deadlines does not seem reasonable and exposes companies and their managers to liability and sanctions that are not in line with the exceptional circumstances that the country is currently experiencing.
In view of the difficulties caused by the health crisis linked to Covid-19 and the impossibility for economic life to follow its usual course, it is appropriate to extend the deadlines for filing and publication of annual accounts, consolidated accounts and related reports.
It is important to create the conditions for safeguarding businesses and promoting the safety of economic and social players. To this end, it is proposed that the deadlines for the filing and publication of annual accounts, consolidated accounts and related reports be extended by three months.
As a result, a company whose financial year is based on the calendar year and whose annual accounts at 31 December 2019 should in principle be filed with the Trade and Companies Register by 31 July 2020 at the latest will in practice have an additional period of 3 months, i.e. a period extended to 31 October 2020.
In its opinion of 8 April 2020 on the bill, the Council of State (Conseil d’État) rightly noted that extending the deadline for filing and publication of annual accounts, consolidated accounts and related reports as proposed was not sufficient if, on the other hand, the law of 1915 still requires that the annual general meeting of a public limited company must be held within six months of the end of the financial year.
An amendment to the bill is therefore proposed to allow, for example, a company with a closing date of 31 December 2019 to hold its annual general meeting until 30 September 2020 and to file and publish its accounts and reports until 31 October 2020.
The amendment has been adopted by the Justice Committee on 9 April 2020, and a new article 3 is therefore inserted in the bill, to be read as follows: “Art.3. The annual general meeting of the companies referred to in Article 8 of the Commercial Code may be convened on a date that is within nine months after the end of its financial year. “This extends the legal deadline for holding the annual general meeting to approve the annual accounts by three months, for example from 30 June to 30 September for a company with a financial year that is based on the calendar year.