Bill No 7968 (the "Bill") transposing Directive (EU) 2019/1151 of the European Parliament and the Council of 20 June 2019 (the "Directive") amending Directive (EU) 2017/1132 as regards the use of digital tools and processes in company law has been brought before the Luxembourg Parliament. The Bill will result in modifications to a number of pieces of legislation, in particular the Companies Act of 10 August 1915, as amended, and the Trade Register Act of 19 December 2002.
Objective
The purpose of the Directive is to facilitate digitalisation in the Member States of incorporation formalities, the execution of notarial instruments, the registration of branches, and the filing of documents and information related to companies and branches. The Directive requires Member States to provide user-friendly information (e.g. standard incorporation documents) free of charge, on an online portal or easily accessible website, and to ensure that the fees applicable to online procedures are transparent.
Scope
The Directive requires Member States to ensure that a company can be incorporated - and notarial instruments executed - completely online, without the founders having to appear physically before a competent authority or civil law notary. While the Directive provides for this possibility only for limited-liability companies, such as the Luxembourg public limited company (société anonyme), the partnership limited by shares (société en commandite par actions) and the private limited-liability company (société à responsabilité limitée), the Luxembourg legislature decided to extend it to other corporate forms, such as the limited partnership (société en commandite simple) and civil companies (sociétés civiles), and to other types of notarial instruments (excluding wills).
Online incorporation and execution of notarial instruments
The Bill facilitates the online incorporation of companies, although it remains possible to hold a physical meeting before a notary. If the incorporation formalities are completed online, the Luxembourg notary may nonetheless require that a meeting be held by videoconference in order inter alia to verify the identity and legal capacity of the parties. Luxembourg notaries may also request any additional supporting documents they deem necessary. In addition, the Bill proposes that notaries be free to require the electronic signature of their choosing on a notarial instrument. Finally, the Bill proposes the introduction of an ad hoc electronic exchange platform for Luxembourg notaries, which will become the main platform for all types of notarial documents (with the exception of wills) going forward.
Deadline for online incorporation
When a company is formed by natural persons using model documents (in Luxembourg, the standard articles of association provided by the Luxembourg Chamber of Notaries), the Directive states that online incorporation must be completed within five working days from the later of the two following dates: (i) the date of completion of all formalities required for online incorporation or (ii) the payment date of the registration fee and the share capital, in cash or in kind. Otherwise, the incorporation process must be completed within ten working days. The Bill does not stipulate deadlines by which the online incorporation process must be completed, although this information may be set out in a future Grand Ducal regulation.
Deadline for transposition into Luxembourg law
The deadline for transposition of the Directive into national law is 1 August 2022. The Bill will be subject to legislative revision in the near future, after consultation with various professional bodies and the Council of State.