Coordination of the amended law of 10 august 1915 concerning commercial companies

The Grand Ducal regulation of 5 December 2017 coordinating the amended law of 10 August 1915 concerning commercial companies (“LSC”) was published in the Memorial (official journal) of 15 December 2017 (the “Regulation”). It entered into force on 19 December 2017 (i.e. the fourth day following its publication).

The Regulation was adopted pursuant to Article IV of the law of 10 August 2016 modernizing the LSC, which provides that the Grand-Duc (i.e. the Government) is entitled to coordinate the text of the LSC and, as a result, numbering for titles, chapters, sections, articles and paragraphs can be changed.

Without affecting the substance of the LSC as it stands, the Regulation proceeds with a coordination which aims to improve the consistency and readability of the LSC.

Where the LSC was divided into 16 sections which were subdivided into sub-sections, it is now divided into 17 titles which are subdivided into chapters and then sections.

Numbering of articles follows now this new organization: articles are numbered by the succession of (i) title number (first number of the article), (ii) chapter number (second number of the article), (iii) section number (third number of the article) and finally, after a dash, (iv) the order number.

For instance, Article 450-1 where “4” means Title IV (relating to the Sociétés Anonymes), “5” means Chapter V (relating to the general meetings), “0” means that this chapter is not divided into sections and “1” means that it is the first article of this chapter.

Improvement of consistency and readability can especially be found with:

• The Title VII relating to limited liability companies (Sociétés à responsabilité limitée)

Before the Regulation, this type of company could only be found after sections on the dissolution and liquidation of companies and sections concerning criminal and additional provisions.

The Regulation puts this type of company together with the other types, at the beginning of the LSC. Therefore, provisions concerning the Sociétés à responsabilité limitée now appear more logically after titles concerning the public limited companies (Sociétés Anonymes – title IV), to the simplified stock companies (Sociétés par actions simplifiées – Title V), to the partnership with a share capital (Sociétés en commandite par actions – Title VI).

• The Title X relating to companies restructuring

This title did not exist as a section before the Regulation: sections concerning the transformation of company, merger and division existed separately.

The Regulation so puts all types of restructuring together under one title: provisions concerning the transformation of companies now appear first (Chapter 1) and then those concerning mergers (Chapter 2) and divisions (Chapter 3) and finally those concerning transfers of assets, branch of activity transfers and all assets and liabilities transfers (Chapter IV) and transfers of professional assets (Chapter V).

• The titles XI and XII respectively relating to the liquidation and judicial dissolution

Before the Regulation, provisions concerning the liquidation of companies and judicial dissolution could be found after the sections concerning the types of companies (except the provisions concerning the limited liability company) but before the sections concerning restructuring.

The Regulation now puts these provisions more logically at the end of the LSC, i.e. after the provisions concerning restructuration of companies but before the provisions concerning foreign companies (Title XIII) and provisions concerning rights of action and prescription periods (Title XIV) and criminal and additional provisions (respectively Title XV and XVI).