LUXEMBOURG Law and Practice Contributed by: Philipp Mössner, Anna Lindner, Chara Papagiannidi and Maria Gusinski, GSK Stockmann SA
resolutions or decisions to be adopted, and shall give their vote in writing. Written resolutions shall fulfil the same majority requirements applicable to the voting in general meetings in order to be passed (please refer also to 2.7 Types of Resolutions and Thresholds ). 3. Share Issues, Share Transfers and Disclosure of Shareholders’ Interests 3.1 Share Issues In an SA, new shares to be subscribed for in cash have to be offered on a pre-emptive basis to existing share- holders in the proportion of the capital represented by their shares. This pre-emption right can be limited by resolution of the general meeting of shareholders. Such resolution can also be passed in advance – eg, in connection with the approval of authorised share capital or employee-participation schemes. The articles of association of an S.à r.l. may provide for pre-emption rights similar to the ones in an SA. 3.2 Share Transfers The existence and nature of legal and regulatory restrictions on the transfer or disposal of shares depend on the company type. • In an SA, there are typically no transfer or disposal restrictions applicable to the shares, unless these have been specifically agreed among sharehold- ers or unless regulatory provisions require certain restrictions. • In an S.à r.l., the shares are freely transferable among existing shareholders. However, the transfer of shares to non-shareholders may only be made with the prior approval of a general meeting of shareholders representing at least three quarters of the share capital of the company, unless the com- pany’s articles of association provide for a lowered majority of half of the company’s share capital. 3.3 Security Over Shares Shareholders are entitled to grant security interest over their shares. Pledges over shares of a company are the most commonly used form of security and are governed by the law of 5 August 2005 on financial collateral arrangements, as amended (Collateral Law).
Restrictions or prior approval requirements may apply if they are provided by the relevant articles of associa- tion and/or a shareholders’ agreement. 3.4 Disclosure of Interests Pursuant to Article 8 (1) of the law of 11 January 2008 on transparency requirements for issuers, as amend- ed (Transparency Law), a shareholder who acquires or disposes of shares of an issuer whose shares are admitted to trading on a regulated market and for which Luxembourg is the home member state and to which voting rights are attached shall notify the issuer of the proportion of the voting rights held by the shareholder as a result of the acquisition or disposal where that proportion reaches, exceeds or falls below the thresholds of 5%, 10%, 15%, 20%, 25%, 33⅓%, 50% and 66⅔%. The notification requirement by a shareholder to the issuer also applies to a natural person or legal entity to the extent it is entitled to acquire, dispose of or exercise voting rights in any of the specific cases set out in Article 9 of the Transparency Law, and/or to a natural person or legal entity who holds, directly or indirectly, specific financial instruments as set out in Article 12 of the Transparency Law. Exemptions may apply under certain circumstances in case of clearing and settlement, market making, stabilisation and vot- ing rights held in a trading book. The notification to the issuer shall be effected as soon as possible, but not later than six trading days in case of a transaction and four trading days if the breakdown of voting rights has changed. The information to be notified by the shareholder to the issuer in accordance with the above shall simultaneously be filed with the Luxembourg financial regulatory authority, the Com- mission de Surveillance du Secteur Financier (CSSF). 4. Cancellation and Buybacks of Shares 4.1 Cancellation Shares of a company can be cancelled on a manda- tory or voluntary basis. For this purpose, an EGM – acting in accordance with the conditions prescribed for the amendment of the articles – shall be convened
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