The shares of the beneficiaries may be voiceless or have multiple votes. Unlike articles of association, shareholders` agreements are confidential and not accessible to the public. There is no injunction to disclose them. That`s why it makes them so attractive to investors and shareholders, as they don`t want sensitive company information to be openly readable by the public. Directors are not employees of the Company as such, and their remuneration is subject to the general rules on mandates and company law. In general, and unless otherwise specified in the articles, the services provided by the directors of the Company are deemed to be free of charge. Where the articles of association authorize remuneration, the total amount to be paid to the members of the board of directors is determined by the general meeting of shareholders and the board of directors allocates, at its sole discretion, this amount among the members of the board of directors.46 The conflict of interest rules prohibit members of the board of directors from participating in or voting on decisions relating to their own remuneration. In this respect, the use of shareholders` agreements of a purely contractual nature is much more common than the provision of corresponding provisions in the articles of association. Since the amendment of the Companies Act in 2016, the use of shareholders` agreements has been expressly recognised in Luxembourg law. The Companies Act does not stipulate that these types of agreements must be limited in time. However, three types of voting arrangements are established, which are null and void: certain issues must also be reported to shareholders, such as.B. conflicts of interest of the director in the context of voting on a resolution (see Section II).63 Due to their confidentiality, shareholder agreements cannot be invoked against third parties. Shareholders who intend to attend a general meeting shall have the right to be informed about the exercise of their voting rights in due form; For example, the 1915 Act stipulates that certain formalities for this purpose must be completed in good time.
A notice of meeting must be filed with the Luxembourg Commercial Register at least 15 days before the general meeting and published in the Electronic Official Journal and in a local newspaper. An SA or a Sàrl may be constituted by one or more shareholders, who must present to the notary a document attesting to the existence of the funds (in the case of a contribution in cash) or the value of the assets (in the case of a contribution in kind) that have been contributed to the share capital, in particular by means of a blocking certificate or an evaluation report. The minimum share capital of an SA is EUR 30,000 and for a Sàrl EUR 12,000. It must be paid in full for a Sàrl, while it is only paid up to a quarter for an SA. It should be noted that the SA and the Sàrl exist and acquire legal personality as soon as the notarial deed is signed. This means that they can both conclude agreements and take action immediately afterwards. These changes will impact joint ventures and add possible tools to shareholder agreements that will provide shareholders with more flexibility in designing an investment environment tailored to their respective needs and interests. If votes are cast by shareholders at a general meeting on the basis of an invalid voting agreement, the votes, as well as resolutions passed, are deemed null and void, unless the votes did not affect the final result.71 Although the use of shareholder agreements allows for discretion and flexibility, any mandatory implementation of such an agreement remains under threat. Non-voting shareholders will receive the same documents, notices, reports and information provided to other shareholders under the 1915 Act. Finally, voting rights transfer clauses generally allow shareholders to transfer their voting rights regardless of the security.
The validity of these clauses is controversial. Part of the legal literature considers that such clauses would be illegal, since the right to vote is essentially a prerogative of public policy attached to the status of shareholder and therefore a non-transferable prerogative. The authors who share this view argue that the right to vote is a complement to the social right and that it guarantees the shareholder remuneration for the risk he takes as a shareholder. They consider that non-transferability is justified by the protection of the shareholder who, in the event of a transfer, would lose the guarantee of protection of his interests […].
