Update to the Law of August 10, 1915, on Commercial Companies
Latest Legislative Developments You Need to Know
The legal framework for commercial companies in Luxembourg is evolving! The Law of August 10, 1915, a cornerstone of Luxembourg corporate law, has recently been updated to incorporate new provisions, particularly concerning cross-border transformations, mergers, and demergers.
With the entry into force of the Law of February 17, 2025, Luxembourg transposes Directive (EU) 2019/2121, which aims to harmonize and simplify cross-border operations between EU Member States. These changes provide greater legal certainty for businesses while strengthening the protection of workers and stakeholders.
Key Updates
New Rules for Cross-Border Transformations
Luxembourg companies wishing to convert into entities governed by another EU Member State’s law must now follow a stricter procedure, including:
- The publication of the draft terms of the cross-border conversion,
- Mandatory consultation with employees,
- Legality control by the competent authorities.
Clarification of Cross-Border Mergers and Demergers
Companies will benefit from a more structured framework to successfully carry out cross-border operations, with clear requirements for documentation, shareholder approval, and decision publication.
Enhanced Protection for Stakeholders
Creditors, minority shareholders, and employees will have reinforced mechanisms to assert their rights.
What Does This Mean for Businesses?
These new rules enhance transparency and predictability in cross-border operations, making Luxembourg even more attractive to international companies. However, administrative procedures will become slightly more complex, requiring businesses to anticipate and prepare more thoroughly.
What Should You Do Now?
Companies planning cross-border transformations or mergers should quickly:
- Analyze the new obligations and adjust their strategies accordingly,
- Consult their legal and financial advisors to ensure compliance,
- Anticipate approval timelines from the relevant authorities.
Now is the time to prepare and adapt to this evolving legal landscape!