The law of 3 August 2011 relating to the reporting and documentation requirements in the case of mergers and divisions of companies and transposing into Luxembourg Law the provisions of Directive 2009/109/EC of the European Parliament and of the Council of 16 September 2009, amending Council Directives 77/91/EEC, 78/855/EEC and 82/891/EEC, and Directive 2005/56/EC as regards reporting and documentation requirements in the case of mergers and divisions, was adopted by the Luxembourg Parliament and published in the Luxembourg Official Journal (the Mémorial) on 12 August 2011.
The present law aims to reduce the administrative burdens relating in particular to publication and documentation obligations of companies. In order to do so, and in accordance with the need to protect the interests of shareholders, the law of 3 August 2011 amended the law of 10 August 1915 on commercial companies. The main amendments introduced by the law of 2011 may be summarised as follows:
– Establishment of a written report
The law of 2011 provides an obligation for the administrative and management bodies of each of the companies to draw up a detailed written report addressed to the members explaining the common draft terms of merger and setting out the legal and economic grounds for them, in particular for the share or corporate unit exchange ratio. However, such a written report shall not be required if all members and the holders of other securities conferring the right to vote of each of the companies involved in the merger have so agreed.
– Information regarding material changes in the assets and liabilities
Under the law of 2011, the administrative or management bodies of each of the companies involved are subject to the obligation to inform all companies involved of any material change in the assets and liabilities between the date of preparation of the draft common terms of merger and the date of the general meetings which are to decide on the draft common terms of merger. In a similar way to the obligation of establishment of a written report, such an information shall not be required if all members and the holders of other securities conferring the right to vote of each of the companies involved in the merger have so agreed.
– Contributions other than cash
Concerning such contributions, the law of 2011 admits, regarding certain conditions, the exemption of the required valuation report. Therefore, the valuation of contributions in kind shall not apply to the incorporation of a new company in case an expert report is drawn up on the draft common terms of merger.
– Accounting statement
The law of 2011 provides that an accounting statement shall not be required if the company publishes a half-yearly financial report in accordance with article 4 of the law of 11th January 2008 on transparency requirements for issuers of securities and makes it available to members, at the registered office, at least one month before the date of the general meeting called to decide on the common draft terms of merger. Such accounting statement shall also not be required if all members and the holders of other securities conferring the right to vote of each of the companies involved in the merger have so agreed.
– Documents publication
A company shall be exempt from the requirement to make the documents relating to the proposed merger available at its registered office if, for a continuous period beginning at least one month before the day fixed for the general meeting which is to decide on the draft common terms of merger and ending not earlier than the conclusion of that meeting, it makes them available on its website.
Please note that the present law is applicable to domestic mergers and divisions, to cross-border mergers and to all commercial companies.