AIQUNITED - Adoption of Bill No. 8053 (BILL 8053) - Cross-Border Conversions, Mergers and Divisions

AIQUNITED-TEAM / January 31st

On 23 January 2025, the Luxembourg Parliament passed in a first vote[1] bill no. 8053[2] modernizing the law of 10 August 1915 on Luxembourg commercial companies as amended[3] (the “Law of 1915”). The bill transposes Directive (EU) 2019/2121[4] of 27 November 2019 on cross-border conversions, mergers and divisions (the “Mobility Directive”) into Luxembourg law (the “Bill”).

In particular, the Bill governs cross-border mergers, conversions (also known as migrations) and divisions within the EU. The regulations apply exclusively to a certain number of limited liability companies, notably S.A. (société anonyme), S.à r.l. (société à responsabilité limitée) and S.C.A. (société en commandite par actions). In the final version of the Bill, special limited partnerships (SCSp) were excluded from the scope.

Important changes and additions to the Bill include:

Introduction of an Anti-Abuse Test: Notaries are now required to carry out an initial legality check to ensure that the transaction is legal and not for abusive purposes.[5] The documents and information to be submitted to the notary in order to obtain the pre-merger certificate are listed in Art. 1025-14(2)(f) of the Bill.

Protection of Minority Shareholders: Minority shareholders are given the right to sell their
shares in return for a cash settlement if they vote against the transaction.[6]

Simplified Mergers: If a European cross-border merger by acquisition is carried out either by a company which holds all the shares and all other securities carrying voting rights in the general meetings of the company or companies being acquired, or by a person who directly or indirectly holds all the shares in the acquiring company and in the company or companies being acquired, and the acquiring company does not issue any shares, certain exemptions apply that simplify the process of the merger by not having to apply certain legal requirements and formalities. [7]

Extended Protection for Creditors: The provisions of the Bill also provide for enhanced protection for creditors who may be affected by the transaction. Provided that they can demonstrate that the transaction jeopardizes the recovery of their claims and that they have not received satisfactory guarantees from the company, creditors whose claims arose prior to the date of publication of the draft terms of the transaction may, upon notice to the company and within three months of the date of publication of these terms, apply to the court to obtain adequate safeguards. [8]

The Bill must now be published in the Official Journal in order to enter into force. The provisions of the new law apply to all mergers, conversions and divisions that fall within the scope of the new law and for which the draft articles of association are published on or after the first day of the month following the entry into force of the law.

The effective date of the new law is yet unknown, as it depends on the decision of the Council of State  (Conseil d’Etat) to grant an exemption from the second vote and on the date of publication of the new law.

We are happy to analyze and provide further details on the implications of the above points for your planned mergers, conversions and divisions within the EU. If you have any questions, please do not hesitate to contact us.

Fabienne Wirtz-Moscariello
Senior Associate
Rechtsanwältin / Lawyer*
+352 26202332-24
fabienne.wirtz@aiqunited.com

Harald Strelen, LL.M - MSc
Partner
Rechtsanwalt / Lawyer*
+352 26202332 30 (office)
+352 691 107 506 (mobile)
harald.strelen@aiqunited.com


[1] https://wdocs-pub.chd.lu/docs/exped/0151/014/302141.pdf

[2] https://wdocs-pub.chd.lu/docs/exped/0138/108/277084.pdf

[3] https://legilux.public.lu/eli/etat/leg/loi/1915/08/10/n1/jo

[4] Directive - 2019/2121 - EN - EUR-Lex

[5] Art. 1025-14 of the Bill

[6] Art. 1025-10 of the Bill

[7] Art. 1025-18 of the Bill

[8] Art. 1025-11 of the Bill


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