LUXEMBOURG Law and Practice Contributed by: Romain Tiffon and Marie Bentley, ATOZ Tax Advisers
Shareholder Meetings and Corporate Decisions Companies are required to organise the annual approval of their financial statements each year. In this context, shareholders typically decide on the fol - lowing: • the approval of the annual accounts; • the allocation of profits (including the declaration of dividends); • the discharge of the management for the perfor - mance of their duties; and • the appointment or removal of directors and audi - tors, where applicable. All such decisions must be properly documented and The SA provides the most flexible governance frame - work, as it can operate under either a one-tier or a two-tier system. Under the one-tier system, the com - pany is managed by a board of directors. The board is appointed by the general meeting of shareholders and is responsible for the overall management of the company. Under the two-tier system, governance is divided between a management board, which is responsible for the day‑to‑day management; and a supervisory board, which oversees and monitors the management board. The supervisory board is appoint - ed by the shareholders, while the management board may be appointed by either the supervisory board or the shareholders, depending on the articles of asso - ciation. The SA is therefore characterised by a choice between monistic and dualistic governance, making it suitable for more complex organisations. Sàrl retained in the company’s records. 3.4 Management Structures Luxembourg company law offers flexible governance models, which vary depending on the legal form. SA The Sàrl follows a simpler, purely one-tier structure. It is managed by one or more managers, who may act individually or collectively (often as a board of manag - ers, although this is not mandatory). There is no two- tier system available for this entity. This streamlined governance reflects the Sàrl’s typical use for closely held companies, subsidiaries and SMEs.
where they become publicly available. Filing must take place within one month following shareholder approval. Failure to comply with this obligation may result in sanctions, including fines, potential liability of directors or managers, and, in serious cases, the
possible dissolution of the company. Changes to Constitutional Documents
Any amendment to the articles of association must be adopted by the shareholders, generally at an extraor - dinary general meeting, and for corporate entities such as SAs and Sàrl such amendments typically require execution before a notary. Once adopted, the changes must be filed with the RCS and published in the official gazette (RESA). This process ensures that key structural changes are publicly disclosed. Changes in Management and Corporate Organs Although the documents do not set out each step of the process in detail, they establish that corporate records must include minutes and decisions relating to the appointment and removal of directors or man - agers. In addition, the notarial and registration frame - work implies that changes requiring formal corporate acts are filed and published through the RCS system. As a result, changes in management are subject to formal recording and, where applicable, registration and public disclosure. Ultimate Beneficial Owner (UBO) Disclosure Luxembourg law imposes specific obligations regard - ing beneficial ownership. Companies are required to register their UBO in the Register of Beneficial Own - ers (RBE) and to update this information within one month of any change. The information to be disclosed includes the individual’s name, nationality, date and place of birth, country of residence, as well as the nature and extent of the ownership or control exer - cised. A UBO is generally defined as a natural person who directly or indirectly holds more than 25% of the shares or voting rights, or who otherwise exercises control over the entity. This constitutes a key trans - parency requirement, particularly in the context of anti‑money laundering regulations. Companies must ensure that their beneficial ownership information in the RBE remains up to date.
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