Fresh extension of remote regime for board and shareholder meetings until end of 2022
On December 17, 2021, Luxembourg’s Chamber of Deputies passed into law Bill 7916, which extends provisions on governance measures concerning the holding of meetings in companies and other legal entities in the light of the Covid-19 pandemic legislation of September 23, 2020.
What measures have been extended?
The legislation extends the possibility to hold virtual meetings without a physical presence for Luxembourg companies and other legal entities through amendment of Article 5 of the 2020 law, from the end of 2021 until December 31, 2022.
The explanatory notes of Bill 7916 specifies that the virtual meeting regime is only optional. Companies or entities falling within the scope of the provision that prefer to hold meetings in person may do so in compliance with applicable health measures.
What legal entities and meetings are concerned?
The legislation authorises the holding in virtual rather than physical form of ordinary general meetings of shareholders, boards of directors, and other managing bodies of legal entities including:
• Any types of company.
• Non-profit associations and foundations.
• European economic interest groups.
• Economic interest groups.
However, the legislation does not authorise further extensions regarding the holding of annual general meetings and approval of annual accounts.
How should votes take place, and how many participants are required?
A company holding any general meetings of shareholders can require shareholders and other participants to exercise their rights by a vote in writing or electronic form (subject to identification), provided that written resolutions have been circulated or published before the meeting, through video conference or other means of communication enabling identification of participants, or by proxy.
Boards of directors or executives or any other corporate bodies may hold remote meetings by written circular resolutions, video conference or other means of communication enabling identification of participants. These provisions apply regardless of the number of participants at shareholder or board meetings.
How should a quorum or majority at a remote meeting be calculated?
Shareholders or directors who participate in such meetings are deemed to be present for purposes of calculation of the quorum and majority requirement.
Must the option to hold remote meetings be provided for in the articles of association?
Remote meetings without physical presence may be held even if the articles of association do not explicitly provide for this option.
If you have any further questions, please contact our corporate team.
Law of 20 June 2020 extending measures concerning the holding of meetings in companies and other legal persons
The law of 20 June 2020 extending measures concerning the holding of meetings in companies and other legal persons was published on 25 June 2020 in the Official Journal of the Grand Duchy of Luxembourg
This Law applies during the period provided for in Article 3 of the law of 22 May 2020 extending the deadlines for the filing and publication of annual accounts, consolidated accounts and related reports during a state of crisis.
Such Law reaffirms the provisions of the Grand Ducal regulation of 20 March 2020 introducing measures concerning the holding of meetings in companies and other legal persons voted during the state of crisis created by COVID-19 (the “Regulation”).
Therefore, a company may, even if the articles of association do not so provide and irrespective of the number of participants in its general meeting, hold any general meeting of the shareholders without physical meeting, and may require its shareholders or associates and other participants in the meeting to attend the meeting and exercise their rights in one or more of the following forms of participation:
- by remote vote in writing or in electronic form allowing their identification and provided that the full text of the resolutions or decisions to be taken has been published or communicated to them, or
- by videoconference or other means of telecommunication allowing their identification.
Shareholders or associates or other participants may also attend the general meeting and exercise their rights through the intermediary of a proxy designated by the company.
Shareholders or associates who participate by such means are deemed to be present for the calculation of the quorum and majority at such meeting.
The foregoing is also applicable to meetings of bondholders.
Notwithstanding any provision to the contrary in the articles of association and without the articles of association having to provide for the possibility of doing so, the other organs of any company may hold their meetings without a physical meeting:
- by written circular resolutions; or
- by videoconference or other means of telecommunication enabling the identification of the members of the body participating in the meeting.
Members of such bodies who participate by such means are deemed to be present for the calculation of the quorum and the majority.
Any company that has convened its general meeting in accordance with the terms and conditions applicable before the entry into force of the Regulation and that takes the decision to reconvene the general meeting in accordance with the terms and conditions defined by the Law, must publish its decision and, as the case may be, notify it to its shareholders or associates or other participants in the form in which it had convened that meeting or by publication on its website no later than the third working day before the general meeting.
The Law applies to the holding of general meetings and meetings of the other bodies of the companies and legal persons during the period provided for in article 3 of the law of 22 May 2020 extending the deadlines for the filing and publication of annual accounts, consolidated accounts and related reports during a state of crisis meaning general meetings and meetings convened at a date that is nine months after the end of the financial year.
The Law shall enter into force on 25 June 2020 except for article 4 (concerning the public institution named “Fonds du Logement”) which applies retroactively as of 30 May 2020.
COVID-19: CSSF waives prior notification of swing pricing in FAQ update
In the light of the exceptional circumstances of the Covid-19 pandemic, on April 7 the Luxembourg regulator (CSSF) issued an updated version of its FAQ document relating to the use of the swing pricing mechanism by Luxembourg-domiciled investment funds that are UCITS, Part II collective investment undertakings and specialised investment funds (SIFs).
The swing pricing mechanism is designed to protect long-term shareholders from dilution of value resulting from trading costs engendered by subscription and redemption activity by other investors in the fund.
The CSSF has confirmed that investment fund managers may increase the swing factor to be applied to the fund’s net asset value up to the maximum level provided for in its prospectus without prior notification to the CSSF.
In addition, a swing factor may be applied beyond the maximum stipulated in the fund’s prospectus in various situations:
Where the fund’s prospectus formally authorises the management body to exceed the maximum level subject to certain predefined conditions, the manager can decide to increase the swing factor in accordance with the provisions and conditions set out in the prospectus.
If the prospectus does not offer this possibility to the manager, the CSSF is permitting managers on a temporary basis, given the current exceptional market circumstances, to increase the swing factor beyond the maximum stipulated in the prospectus. In this event, an update of the prospectus formally to authorise the manager to exceed the maximum swing factor under certain conditions must be carried out as soon as possible.
In both cases, the fund’s board of directors must communicate its decision to current as well as new investors through the customary communication channels stipulated by the prospectus. In the second case, communication to investors must take place before applying an increase in the swing factor beyond the maximum authorised by the prospectus, and the CSSF must receive a copy of the communication at the same time.
In each case, the decision must be duly justified and take into account the best interest of investors, and must be communicated to current as well as new investors through the customary communication channels set out in the prospectus, for example through the ordinary notice to investors, the fund’s internet site or any other means indicated in the prospectus.
If the fund prospectus does not offer the possibility of exceeding the maximum swing factor stipulated by the fund prospectus, not only must the decision to increase it be communicated to investors in advance, but investment funds must provide the CSSF with a detailed notification including an explanation of the reasons for the decision.
Increasing the maximum swing factor on a temporary basis beyond the maximum level laid down in the prospectus is conditional on the following conditions being fulfilled:
- The revised swing factors are the result of a robust internal governance process and based on a robust methodology, including analysis based on market or transaction data, that provides an accurate net asset value representative of prevailing market conditions.
- Appropriate communication must be made to investors through the customary communication channels.
Swing factors usually range between 1% and 3% depending on the type of assets held by the fund. In the even of implementation of a swing factor adjustment going beyond the maximum authorised by the prospectus as it stands, the CSSF may ask the fund to justify on a retrospective basis the level of swing factor applied and to provide documentary evidence that the factor at that time reflected the prevailing market conditions.
For additional information, the complete frequently-asked questions document is published by the CSSF here.
We will continue to keep you informed of any further CSSF regulatory updates that may impact your fund.
COVID-19: Postponement of SFTR reporting
In the light of the exceptional circumstances of the Covid-19 pandemic, on March 19 the European Securities and Markets Authority issued a public statement regarding application of Regulation (EU) 2015/2365 on transparency of securities financing transactions (SFTR) and clarified it on March 26.
Taking into account the current difficulties for the financial industry in complying with the SFTR due to the impacts of the coronavirus, ESMA has invited national regulators not to prioritise enforcement of the reporting obligation under the SFTR regarding securities financing transactions concluded between April 13 and July 13, 2020, initially scheduled to begin on April 13.
Instead, in general ESMA recommends that regulators should apply a risk-based approach in exercising their supervisory powers in a proportionate manner.
ESMA also considers that it is not necessary to register any trade repository before April 13 and instead expects that repositories will be registered ahead of the next reporting deadline on July 13.
On April 9, Luxembourg’s Financial Sector Supervisory Authority published a circular regarding CSSF Circular 20/739, also dated April 9, on application of the ESMA guidelines on reporting under articles 4 and 12 of the SFTR, noting that it has integrated the guidelines into its administrative practice and regulatory approach, in furtherance of the goal to promote supervisory convergence throughout the EU.
The circular applies to all entities subject to supervision by the CSSF as well as to non-financial counterparties as defined by Article 3(4) of the SFTR that enter into a securities financing transaction as defined by Article 3(11) of the regulation.
The SFTR provides for a phased-in introduction of the reporting obligation, depending on the nature of the entities concerned. Since certain of the starting dates fall on a non-working day in Luxembourg, reporting will effectively begin on the following dates:
1. Tuesday, April 14, 2020 for entities referred to under Article 33(2)(a)(i) of the SFTR;
2. Monday, July 13, 2020 for entities referred to under Article 33(2)(a)(ii);
3. Monday, October 12, 2020 for entities referred to under Article 33(2)(a)(iii); and
4. Monday, January 11, 2021 for entities referred to under Article 33(2)(a)(iv).
Under Article 4(1), the counterparties should comply with the reporting obligation no later than the working day following the conclusion, modification or termination of the transaction.
However, the circular notes that implementation of securities financing transaction reporting is greatly affected by the Covid-19 pandemic, and entities in question may face serious difficulties in finalising implementation of the reporting requirements and completing the necessary technical preparations before April 14.
The CSSF has therefore decided that it will not prioritise supervisory action regarding counterparties, entities responsible for reporting and investment firms over their reporting obligations under the SFTR or MiFIR, regarding transactions concluded between April 13 and July 13, 2020, and transactions subject to backloading under the SFTR.
The CSSF will monitor the progress of implementation by market participants and expects them to be sufficiently prepared ahead of the next deadline of the reporting regime, July 13, in order to start reporting as of this date.
The ESMA statement of March 26 can be viewed at https://www.esma.europa.eu/sites/default/files/library/esma80-191-995_public_statement.pdf.
CSSF Circular 20/739 is available at http://www.cssf.lu/fileadmin/files/Lois_reglements/Circulaires/Hors_blanchiment_terrorisme/cssf20_739eng.pdf.
COVID-19 investment funds news | Ensuring corporate governance in time of crisis: measures for regulated investment funds
The public health emergency and economic slump precipitated by the Covid-19 pandemic has prompted the authorities to amend various rules and regulations applicable to the fund industry in Luxembourg.
We have summarised below the most important developments.
Prohibition on holding physical meetings
In the current circumstances, with the circulation of people drastically restricted in the European Union and worldwide, the holding of both meetings of management boards and boards of directors of a company and of general meetings of shareholders has been significantly affected.
On 20 March, the Luxembourg government issued a grand-ducal decree offering practical solutions to the difficulty in conducting meetings on the part of companies and other legal entities. Other shareholders’ rights, including the right to information and convening formalities, remain applicable. The decree applies equally to regulated funds.
Impact on shareholders
Regarding general meetings of shareholders, Article 1(1) of the decree states that, irrespective of any contrary provision in a company’s articles of association, or of the number of participants present or represented, a company is entitled to hold any general meeting of shareholders without conducting a physical meeting, and summon shareholders to attend meetings.
They may exercise their rights via remote voting, either in writing or in electronic form, provided that the full text of resolutions or decisions to be taken has been published or communicated to them. Alternatively, they may exercise voting rights through a proxy appointed by the company, such as a lawyer, auditor, notary or board member, or by videoconference or any other telecommunications channel allowing the identification of each participant.
Shareholders who participate by these means are deemed to be present for the calculation of the quorum and majority at the meeting.
Should it be necessary to hold an extraordinary general meeting in front of a notary, please note that this is still feasible despite the exceptional circumstances. We can assist you should you need to organise a meeting urgently.
Impact on governance bodies
According to Article 1(2), irrespective of any contrary provision in a company’s articles of association, other governance bodies may hold meetings without a physical presence through written circular resolutions, or by videoconference or any other telecommunications channel allowing the identification of each participant. Members who participate by these means are deemed to be present for the calculation of the quorum and majority.
Feel free to contact us if you need our assistance to organise such meetings and prepare relevant documentation to reflect the situation resulting from the Covid-19 pandemic.
Exceptional extension of annual accounts approval and filing
A fund’s annual accounts should normally be approved by shareholders within six months of the end of the financial year. Under Article 1(3), irrespective of any contrary provision in a company’s articles of association, the representative of a fund is exceptionally authorised to convene its annual general meeting at the latest on a date within six months after the end of its corporate year, or on a date up to 30 June 2020. This decision may be of relevance to your fund if it has a statutory fixed date for its AGM.
If you have already convened the annual general meeting, according to Article 1(4), you can still inform your shareholders of your intention to conduct the meeting in accordance with the provisions of Article 1(1) as above, provided you do so no later than three business days before the scheduled meeting.
The company’s annual accounts should normally be deposited within one month of their approval with the Luxembourg register of commerce and companies. The Luxembourg Business Register announced on March 18 that companies will have an additional period of four months to file their annual accounts, at the standard administrative fee – that is, with no late filing penalty.
We encourage you to remain in contact with your fund administrator and auditor to check on a regular basis how you will be able to meet the deadline under article 1(3) of the decree. We are currently assisting clients with the approval of their annual accounts as smoothly as possible, from organising approval to deposit of the accounts with the Luxembourg Business Register. Please contact us should you need our assistance.
CSSF reporting deadlines
On March 23, the CSSF issued a statement informing supervised entities that while entities remain bound by the prescribed deadlines to carry out regulatory reporting, if entities can provide justification for a delay, the regulator will not enforce the rules strictly.
Two days later, the CSSF announced that if necessary the long-form report exceptionally may be submitted up to four months after the annual general meeting of the audited entity or fund, excluding delays to AGMs authorised by the government as part of its exceptional measures. The delays may not be applied cumulatively.
In the latest update of its frequently-asked questions on Covid-19, the CSSF has provided for further delays to fund reporting where necessary:
- Annual O 4.1./O 4.2 reporting (investment funds) under IML Circular 97/136 should be submitted to the CSSF within six months from the reference date for non-UCITS and within four months for UCITS. This deadline may be extended until 30 June 2020.
- Quarterly G 2.1 reporting (management companies subject to Chapter 16 and AIFMs) under CSSF Circular 15/633 should be submitted to the CSSF within 20 calendar days following the end of the preceding month. This deadline may be extended to 40 calendar days.
- Quarterly G 2.1 reporting (self-managed investment companies and alternative funds) under CSSF Circular 18/698 should be submitted to the CSSF within 20 calendar days following the end of the preceding month. This deadline may be extended to 40 calendar days.
- The management letter under CSSF Circular 02/81 should be submitted to the CSSF within six months from the reference date for non-UCITS and within four months for UCITS. An additional period of three months may be granted.
- Semi-annual UCITS risk reporting) should be submitted within 45 calendar days following the reference date. The CSSF will inform firms of any postponement in due time.
- Quarterly value at risk and leverage reporting (UCITS) may be suspended until further notice.
- Early warning reporting on large redemptions (UCITS) may be suspended until further notice.
- Closing documents to be provided annually by investment fund managers under sub-points 3 to 15 of point 3 of Annex 2 to CSSF Circular 18/698 should be submitted within five months following the closing date of the manager’s financial year. For managers that closed their financial year on December 31, 2019, the deadline may be extended until August 31, 2020.
- The deadline for investment fund managers whose financial year closed after December 31, 2019 may also be extended by three months.
- For the management letter to be submitted by investment fund managers within the month following the ordinary general meeting that approved the annual accounts and at the latest seven months after the closing date of the manager’s financial year, an additional period of one month may be granted.
- The deadline for quarterly reporting of authorised AIFMs with the list of managed alternative investment funds is extended until June 30, 2020.
Communication with the CSSF must be conducted solely by e-mail and to the address opc@cssf.lu. Funds should liaise with their service providers on this.
The CSSF continues to encourage all entities to meet their regular deadlines if this is feasible. Please contact your auditor to assess the feasibility and timing of the audit of your fund.
We will continue to keep you posted regarding CSSF regulatory updates that may impact your fund.
The full text of these regulations or announcements is available as follows:
The Financial Sector Supervisory Authority (CSSF) has confirmed it has issued a circular requiring investment funds domiciled in the grand duchy to report whenever they receive investor redemption requests amounting to more than 10% of the fund’s asset in a day or more than 30% over a week.
The CSSF is acting in response to broader concern about the impact on the fund industry of market volatility stemming from the coronavirus pandemic. It has also requested that funds notify it of any other significant developments, such as operational or liquidity issues
The regulator initially contacted the 60 biggest asset managers with funds domiciled in the grand duchy on March 10, and issued the circular including a standard reporting template three days later. It has not indicated how many funds, if any, have seen redemptions request levels requiring reporting.
The CSSF’s action reflects the possibility of high levels of redemption requests following precipitous falls in stock markets in March, that previously liquid assets may become harder to trade, and that fund managers and service providers may have problems determining an accurate valuation of fund assets.
A number of funds have already suspended trading as a result of the volatility, especially UK-domiciled open-ended property funds that offered daily trading, but also equity and credit funds in the Nordic countries and France.
However, the CSSF says it believes that at present, the use of existing liquidity management tools approved by the Luxembourg regulator and other international authorities, such as gating, will enable funds to operate in the best interest of investors.
COVID-19 investment funds news | Ensuring corporate governance in time of crisis: measures for regulated investment funds
The public health emergency and economic slump precipitated by the Covid-19 pandemic has prompted the authorities to amend various rules and regulations applicable to the fund industry in Luxembourg.
We have summarised below the most important developments.
Prohibition on holding physical meetings
In the current circumstances, with the circulation of people drastically restricted in the European Union and worldwide, the holding of both meetings of management boards and boards of directors of a company and of general meetings of shareholders has been significantly affected.
On 20 March, the Luxembourg government issued a grand-ducal decree offering practical solutions to the difficulty in conducting meetings on the part of companies and other legal entities. Other shareholders’ rights, including the right to information and convening formalities, remain applicable. The decree applies equally to regulated funds.
Impact on shareholders
Regarding general meetings of shareholders, Article 1(1) of the decree states that, irrespective of any contrary provision in a company’s articles of association, or of the number of participants present or represented, a company is entitled to hold any general meeting of shareholders without conducting a physical meeting, and summon shareholders to attend meetings.
They may exercise their rights via remote voting, either in writing or in electronic form, provided that the full text of resolutions or decisions to be taken has been published or communicated to them. Alternatively, they may exercise voting rights through a proxy appointed by the company, such as a lawyer, auditor, notary or board member, or by videoconference or any other telecommunications channel allowing the identification of each participant.
Shareholders who participate by these means are deemed to be present for the calculation of the quorum and majority at the meeting.
Should it be necessary to hold an extraordinary general meeting in front of a notary, please note that this is still feasible despite the exceptional circumstances. We can assist you should you need to organise a meeting urgently.
Impact on governance bodies
According to Article 1(2), irrespective of any contrary provision in a company’s articles of association, other governance bodies may hold meetings without a physical presence through written circular resolutions, or by videoconference or any other telecommunications channel allowing the identification of each participant. Members who participate by these means are deemed to be present for the calculation of the quorum and majority.
Feel free to contact us if you need our assistance to organise such meetings and prepare relevant documentation to reflect the situation resulting from the Covid-19 pandemic.
Exceptional extension of annual accounts approval and filing
A fund’s annual accounts should normally be approved by shareholders within six months of the end of the financial year. Under Article 1(3), irrespective of any contrary provision in a company’s articles of association, the representative of a fund is exceptionally authorised to convene its annual general meeting at the latest on a date within six months after the end of its corporate year, or on a date up to 30 June 2020. This decision may be of relevance to your fund if it has a statutory fixed date for its AGM.
If you have already convened the annual general meeting, according to Article 1(4), you can still inform your shareholders of your intention to conduct the meeting in accordance with the provisions of Article 1(1) as above, provided you do so no later than three business days before the scheduled meeting.
The company’s annual accounts should normally be deposited within one month of their approval with the Luxembourg register of commerce and companies. The Luxembourg Business Register announced on March 18 that companies will have an additional period of four months to file their annual accounts, at the standard administrative fee – that is, with no late filing penalty.
We encourage you to remain in contact with your fund administrator and auditor to check on a regular basis how you will be able to meet the deadline under article 1(3) of the decree. We are currently assisting clients with the approval of their annual accounts as smoothly as possible, from organising approval to deposit of the accounts with the Luxembourg Business Register. Please contact us should you need our assistance.
CSSF reporting deadlines
On March 23, the CSSF issued a statement informing supervised entities that while entities remain bound by the prescribed deadlines to carry out regulatory reporting, if entities can provide justification for a delay, the regulator will not enforce the rules strictly.
Two days later, the CSSF announced that if necessary the long-form report exceptionally may be submitted up to four months after the annual general meeting of the audited entity or fund, excluding delays to AGMs authorised by the government as part of its exceptional measures. The delays may not be applied cumulatively.
In the latest update of its frequently-asked questions on Covid-19, the CSSF has provided for further delays to fund reporting where necessary:
- Annual O 4.1./O 4.2 reporting (investment funds) under IML Circular 97/136 should be submitted to the CSSF within six months from the reference date for non-UCITS and within four months for UCITS. This deadline may be extended until 30 June 2020.
- Quarterly G 2.1 reporting (management companies subject to Chapter 16 and AIFMs) under CSSF Circular 15/633 should be submitted to the CSSF within 20 calendar days following the end of the preceding month. This deadline may be extended to 40 calendar days.
- Quarterly G 2.1 reporting (self-managed investment companies and alternative funds) under CSSF Circular 18/698 should be submitted to the CSSF within 20 calendar days following the end of the preceding month. This deadline may be extended to 40 calendar days.
- The management letter under CSSF Circular 02/81 should be submitted to the CSSF within six months from the reference date for non-UCITS and within four months for UCITS. An additional period of three months may be granted.
- Semi-annual UCITS risk reporting) should be submitted within 45 calendar days following the reference date. The CSSF will inform firms of any postponement in due time.
- Quarterly value at risk and leverage reporting (UCITS) may be suspended until further notice.
- Early warning reporting on large redemptions (UCITS) may be suspended until further notice.
- Closing documents to be provided annually by investment fund managers under sub-points 3 to 15 of point 3 of Annex 2 to CSSF Circular 18/698 should be submitted within five months following the closing date of the manager’s financial year. For managers that closed their financial year on December 31, 2019, the deadline may be extended until August 31, 2020.
- The deadline for investment fund managers whose financial year closed after December 31, 2019 may also be extended by three months.
- For the management letter to be submitted by investment fund managers within the month following the ordinary general meeting that approved the annual accounts and at the latest seven months after the closing date of the manager’s financial year, an additional period of one month may be granted.
- The deadline for quarterly reporting of authorised AIFMs with the list of managed alternative investment funds is extended until June 30, 2020.
Communication with the CSSF must be conducted solely by e-mail and to the address opc@cssf.lu. Funds should liaise with their service providers on this.
The CSSF continues to encourage all entities to meet their regular deadlines if this is feasible. Please contact your auditor to assess the feasibility and timing of the audit of your fund.
We will continue to keep you posted regarding CSSF regulatory updates that may impact your fund.
The full text of these regulations or announcements is available as follows:
COVID-19 corporate news: Ensuring corporate governance in time of crisis: annual accounts and other issues
The public health emergency and economic slump precipitated by the Covid-19 pandemic has prompted the authorities to amend various rules and regulations applicable to companies in Luxembourg to enable them to cope with existing and future difficulties affecting their business.
We have summarised below the most important developments.
Prohibition on holding physical meetings
In the current circumstances, with the circulation of people drastically restricted in the European Union and worldwide, the holding of both meetings of management boards and boards of directors of a company and of general meetings of shareholders has been significantly affected.
On 20 March, the Luxembourg government issued a grand-ducal decree offering practical solutions to the difficulty in conducting meetings on the part of companies and other legal entities. Other shareholders’ rights, including the right to information and convening formalities, remain applicable.
Impact on shareholders
Regarding general meetings of shareholders, Article 1(1) of the decree states that, irrespective of any contrary provision in a company’s articles of association, or of the number of participants present or represented, a company is entitled to hold any general meeting of shareholders without conducting a physical meeting, and summon shareholders to attend meetings.
They may exercise their rights via remote voting, either in writing or in electronic form, provided that the full text of resolutions or decisions to be taken has been published or communicated to them. Alternatively, they may exercise voting rights through a proxy appointed by the company, such as a lawyer, auditor, notary or board member, or by videoconference or any other telecommunications channel allowing the identification of each participant.
Shareholders who participate by these means are deemed to be present for the calculation of the quorum and majority at the meeting.
Should it be necessary to hold an extraordinary general meeting in front of a notary, please note that this is still feasible despite the exceptional circumstances. We can assist you should you need to organise a meeting urgently.
Impact on governance bodies
According to Article 1(2), irrespective of any contrary provision in a company’s articles of association, other governance bodies may hold meetings without a physical presence through written circular resolutions, or by videoconference or any other telecommunications channel allowing the identification of each participant. Members who participate by these means are deemed to be present for the calculation of the quorum and majority.
Feel free to contact us if you need our assistance to organise such meetings and prepare relevant documentation to reflect the situation resulting from the Covid-19 pandemic.
Exception extension of annual accounts approval and filing
A company’s annual accounts should normally be approved by shareholders within six months of the end of the financial year. Under Article 1(3), irrespective of any contrary provision in a company’s articles of association, companies are exceptionally authorised to convene their annual general meeting at the latest on a date within six months after the end of its corporate year, or on a date up to 30 June 2020. This decision may be of relevance to a company that has a statutory fixed date for its AGM.
If you have already convened the annual general meeting, according to Article 1(4), you can still inform your shareholders of your intention to conduct the meeting in accordance with the provisions of Article 1(1) as above, provided you do so no later than three business days before the scheduled meeting.
The company’s annual accounts should normally be deposited within one month of their approval with the Luxembourg register of commerce and companies. The Luxembourg Business Register announced on March 18 that companies will have an additional period of four months to file their annual accounts, at the standard administrative fee – that is, with no late filing penalty.
We are currently assisting clients with the approval of their annual accounts as smoothly as possible, from organising approval to deposit of the accounts with the Luxembourg Business Register. Please contact us should you need our assistance.
Direct Taxation Authority offers flexibility over liquidity problems
On March 17, Luxembourg’s Direct Taxation Authority (Administration des contributions directes or ACD) announced that in the event that a company or other legal entity is facing liquidity problems due to Covid-19, they may apply for cancellation of quarterly advance payments of income tax and municipal business tax, for the first or second quarters of 2020, or a delay to the deadline for payment of income tax, municipal business tax or net worth tax.
The ACD has placed online two forms to be completed by entities wishing to benefit from one of these measures, at: https://impotsdirects.public.lu/fr/formulaires/contribuables.html
Requests for cancellation of tax advances and payment deadline delays will be accepted automatically for eligible taxpayers which have advances or tax assessments due.
In addition, the deadline for submitting tax returns has been extended until June 30 for legal entities and individuals, as well as for taxpayers wishing to request, modify or revoke their individual tax election.
The full text of these regulations or announcements is available as follows:
Grand-ducal decree: http://www.legilux.lu/eli/etat/leg/rgd/2020/03/20/a171/jo
Luxembourg Business Register announcement on the home page of its website: https://www.lbr.lu
Direct Taxation Authority newsletter: https://impotsdirects.public.lu/fr/archive/newsletter/2020/nl17032020.html
