LUXEMBOURG SA (LUXEMBOURG PLC)
Luxembourg SA company registration
When forming a Luxembourg SA company (PLC) the articles of association must be signed before a public notary.
The shareholders
At least one shareholder is required after the modification to the law of August 2006 which created a single member public limited company.
The shareholders can be natural persons or moral personalities. Their liability is limited to the value of their contribution.
Share capital
A minimum share capital of 31,000 EUR must be paid in at a minimum of ¼.
Capital contributions can be made in kind if they are assets which can be economically assessed, excluding services or contract work. In such a case these assets must first be assessed by the directors of the company and this valuation must then be confirmed by an external auditor who must then release a report describing each contribution in kind and the chosen methods of evaluation.
The founders are severally responsable for paying in the share capital of the company.
The share capital can be increased through a decision at the General Shareholders Meeting.
It is also possible to provide for authorized capital in the by-laws. In this case, the Board of Directors has the ability to increase the share capital within authorized limits.
When there is an increase in share capital, the share premium must also be paid in.
Company administration
The company is administered by:
- Either a Board of Directors made up of at least three members who can be shareholders (in the case of a single member PLC/Luxembourg SA, it is possible to nominate a sole administrator).
- Or a cabinet consisting of an Executive Board which manages the company and a supervisory board which continuously monitors the Executive Board's management, without itself becoming involved in its management' (this clause was added in the reform of August 2006).
The powers of the administrators are generally defined in the articles of incorporation. Failing this, the law allots them the power to carry out all the activities necessary or useful to carrying out the business activities except for those reserved for the General Shareholders Meeting.
The administrators are responsible in the event of the mismanagement of the company.
The administrator must verbally inform the Board of Directors of any conflicts of interest in any transactions done by the board and this must be recorded in the minutes.
The daily management of the company can be delegated to one or more administrators, referred to as the 'Managing Director'.
Statutory auditors
Statutory auditors have an unlimited right to supervise and control all operations of a Luxembourg SA (PLC). They submit an audit report at the General Shareholders Meeting.
Ordinary General Shareholders Meeting
A General Shareholders Meeting must be held at least once every year on the date stated in the articles of incorporation.
Those holding bearer shares are notified through two inserts in the Memorial section C and in the Luxembourg official gazette at an interval of 8 days, at least 8 days prior to the shareholders meeting.
Shareholders with registered shares are notified by mail eight days before the meeting.
If there has been a loss of at least half the share capital, the administrators must call for a General Shareholders meeting within 2 months after the loss has occurred where the continuation of the company will be discussed.
In the case of a single member SA (Luxembourg SAU company), General Shareholders Meetings are replaced by decisions by the sole shareholder, which are recorded in the minutes.
The shares
Bearer or registererd shares:
- Shares are registered until they are fully paid in.
- Shares can then, at the request of the shareholder, be converted into bearer shares. These must be registered with an authorized depositary.
Holders of bearer shares can request the conversion of their shares into registered shares at any time.
It is possible to issue shares without voting rights up to half the share capital.
The means for transferring shares depends on if they are bearer or registered:
- Bearer shares are transferred by registering the transaction on the bearer share register held by a authorized despositary.
- Registered shares must be recorded on the share register.
The company can acquire its own shares under the following conditions:
- This acquisition must be decided on by the General Shareholders Meeting.
- A reserve that cannot be distributed must be entered for the same amount as acquisition price of the own shares.
These shares are totally paid in.
Bonds
The issuances of bond loans is authorized. The loans may be either bearer or registered.
Liquidation
Liquidation is passed through a resolution at the General Shareholders Meeting which must nominate a liquidator and one or more liquidation auditors.
The finalization of the liquidation occurs at the General Shareholders Meeting, after the liqudation reports are presented by the liquidator and auditors.
