Add a bookmark to get started

Website_Hero_Abstract_Architectural_Shapes_P_0031_Mono
20 June 20233 minute read

A welcome step towards the digitalization of company law

On 15 June 2023, the Luxembourg Parliament adopted a law transposing Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019 amending Directive (EU) 2017/1132 on the use of digital tools and processes in company law. It amends:

  • the Civil Code;
  • the law of 9 December 1976 on the organisation of the profession of notary, as amended;
  • the law of 10 August 1915 on commercial companies, as amended; and
  • the law of 19 December 2002 on the Trade and Companies Register and the accounting and annual accounts of companies.

The new law will enter into force on the first day of the month following its publication in the Luxembourg official journal. It’s an important step towards modernizing the Luxembourg notarial profession and maintaining the competitiveness of Luxembourg company law. It introduces the possibility to enact authentic deeds in electronic form and establishes specific rules for the online incorporation of limited liability companies.

The law establishes a legal framework for notarial authentic deeds (with the exception of wills) to be enacted in electronic form. It also determines the rules and conditions that the deeds must adhere to. A notarial electronic exchange platform will be created to enable notaries to draw up authentic deeds in electronic form.

It will now be possible (although not mandatory) to incorporate public limited liability companies (S.A.), private limited liability companies (S.à r.l.) and corporate partnerships limited by shares (S.C.A.) through an authentic deed in electronic form. The Chamber of Notaries will make standard articles of association available for free.

In practice, while the abovementioned companies had to be incorporated in front of a notary in the presence of the founder(s) (being either physically present or represented pursuant to a power of attorney), the new law means founder(s) can sign the incorporation deed remotely through electronic signature(s) without being physically present or represented in front of the notary. It will also still be possible for the founders to be physically present in front of the notary (or represented pursuant to a power of attorney), with the authentic deed being drawn up either in electronic form or in the non-electronic format (paper instrument).

If the authentic deed in electronic form is being signed remotely by the founder(s), they will need to get access to the notarial electronic exchange platform under the supervision of the notary, who may also require the founder(s) to use a qualified electronic signature.

Notaries would only be authorised to refuse to enact a deed electronically if the share capital would be paid up in kind or if they have grounds to suspect identity fraud or non-compliance with the rules applicable to the legal capacity or powers of representation by one party to the deed.

The law also provides that the share capital may be paid up in cash online in an account established in the name of the company to be incorporated with a proper credit institution established in an EU Member State. The proof of payment can also be provided online.

Branches of Luxembourg S.A.s, S.à r.l.s and S.C.A.s that have been established in the territory of an EU Member State will need to be registered with the Luxembourg Trade and Companies Register.

Finally, the Law also includes provisions to improve the exchange of information flow between EU Member States' business registers.

Print