LUXEMBOURG Law and Practice Contributed by: Philipp Mössner, Anna Lindner, Chara Papagiannidi and Maria Gusinski, GSK Stockmann SA
1.7 Shareholders’ Agreements/Joint Venture Agreements Shareholders’ agreements and joint venture agree- ments are very commonly used in Luxembourg for SAs and S.à r.l.s when several investors intend to co- invest in the same commercial company. However, shareholders’ agreements and joint venture agreements are less common for partnerships, since the limited partnership agreement is not publicly avail- able in its entirety and typical provisions included in shareholders’ agreements/joint venture agreements can be directly included in the limited partnership agreement. 1.8 Typical Provisions in Shareholders’ Agreements/Joint Venture Agreements Typical provisions included in shareholders’ agree- ments/joint venture agreements relate to: • board composition and board procedures; • the transfer of shares – eg, transfer restrictions, rights of first refusal, tag/drag-along rights, put and call options; • board and shareholder reserved matters, voting thresholds and convening formalities; • information rights of shareholders towards the company and each other; • termination – eg, the circumstances under which the joint venture may be dissolved before the agreed-upon term; • requirements regarding the financing of a joint venture – eg, provisions in relation to shareholder/ third-party funding, the creation of ordinary and preference shares, distribution waterfall and limita- tions on distributions; and • procedures in case of the dilution of a shareholder due to a capital increase or conversion of shares. Enforceability and Publicity Generally, shareholders’ agreements and joint ven- ture agreements are enforceable inter partes – ie, not towards third parties. Shareholders’ agreements are generally not available to the public. In the case of an S.à r.l. and an SA, the articles of association are publicly available. Therefore, any provisions of a shareholders’ agreement included
in the articles of association will be publicly available and can even be enforceable towards third parties.
2. Shareholders’ Meetings and Resolutions 2.1 Types of Meeting, Notice and Calling a Meeting A company incorporated in Luxembourg shall hold at least one annual general meeting (AGM) on the date stated in the articles of association of the company, where applicable, and in any case no later than six months after the end of the company’s financial year. In the case of an SA, the procedure for convening an AGM depends on the form of the issued shares. For example, the convening notice for the holders of bear- er shares shall be published at least 15 days before the AGM on the Recueil électronique des sociétés et associations and in a newspaper in Luxembourg. On the other hand, a shorter deadline applies if the SA consists of registered shareholders, in which case the convening notice shall be communicated to the registered shareholders at least eight days before the meeting. Finally, for listed companies, the convening period is extended to 30 days, regardless of the form of the shares, in order to facilitate the exercise of vot- ing rights for shareholders not residing in Luxembourg. These deadlines are minimum periods prescribed by law and cannot be shortened. Regarding S.à r.l.s, the LSC is silent on the convening deadline that applies to a general meeting, which in practice is often 15 days. Such period may even be shortened, if provided for by the articles of associa- tion. The AGM typically resolves on: • the company’s annual accounts; • the allocation of the results and the distribution of a dividend; • the appointment and/or renewal of the mandates of the members of the board of directors (one-tier structure) or the members of the supervisory board (two-tier structure);
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