LUXEMBOURG Law and Practice Contributed by: Claire-Marie Darnand, Victorien Hémery, Johan Léonard, Benjamin Marthoz and Tom Storck, Stibbe
In a one-tier board structure, the company will be managed by a board of directors comprising at least three members, unless the company has a sole shareholder, in which case the manage - ment may be entrusted to a sole director. Direc - tors are appointed by the general meeting of the shareholders for a term that may not exceed six years. The board of directors represents the public limited liability company in dealings with third parties. However, the articles of association may authorise one or more directors to represent the company, either alone or jointly. The board of directors may create specific committees and is entitled to determine the composition, pow - ers and duties thereof. Such committees will act under the responsibility of the board of directors. The articles may further authorise the board of directors to delegate its powers to a manage - ment committee or to a managing executive. Such delegation may neither comprise the gen - eral policy of the company nor cover all actions reserved to the board pursuant to applicable law. In a two-tier board structure, the public limited liability company will be managed by a manage - ment board, whose powers and duties may be carried out by a sole person if the company has a sole shareholder or if the share capital is less than EUR100,000. Members of the manage - ment board will be appointed by the supervi - sory board, or by the general meeting for a term that may not exceed six years. Both physical and legal persons may be appointed as management board members, but a permanent representa - tive will have to be appointed in the latter case. The company will be represented by its manage - ment board, but the articles may authorise one or more members of the management board to represent the company either alone or jointly. As in a one-tier board structure, the management board may create committees. The supervisory
board will have an unlimited right to inspect all the transactions of the company. The supervision of the company’s affairs will be carried out by one or more supervisory auditor(s) ( commissaires ) appointed by the general meet - ing of the shareholders for a term that may not exceed six years, unless the accounts are audit - ed by an approved statutory auditor ( réviseur d’entreprises agréé ). The general meeting of the shareholders holds certain exclusive powers granted by law, includ - ing: • the appointment/removal of the members of the board of directors; • the appointment of the supervisory auditor(s); • any amendment to the company’s articles of association; • the approval of the annual accounts and the allocation of the result; and • the dissolution and subsequent opening of the liquidation of the relevant company. Partnership Limited by Shares Partnerships limited by shares are governed by the same governance rules as public limited liability companies, except for the following fea - tures. • The management of the partnership will be carried out by one or more managers, who may be unlimited members but do not need to be. Typically, the management will be entrusted to a general partner, being the holder of all unlimited shares in the partner - ship. In order to mitigate any unlimited liability risks, such a general partner will usually be incorporated under the form of a private lim - ited liability company. Even if a limited partner may be a member of the management board,
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