On 15 June 2023, the Luxembourg Parliament adopted bill of law n°7968 (the Law), taking further steps towards the digitalisation and modernisation of company law and the office of notary by partly transposing Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019 amending Directive (EU) 2017/1132 as regards the use of digital tools and processes in company law (hereinafter the Directive).
The main novelty introduced by the Law is the possibility to incorporate (certain) legal entities online. The Directive also requires Member States to ensure that the registration procedure for branches of companies governed by the law of another Member State can also take place entirely online and introduces a general principle of non-discrimination between instruments, deeds and copies in electronic format, and paper instruments, deeds and copies issued by notaries.
Online incorporations
The Law introduces the possibility for the notary to remotely execute authentic incorporation deeds in dematerialised form. The incorporation process will thus take place entirely online, through an electronic platform and the signing of such deed could be done by means of an electronic signature.
The dematerialised incorporation process is possible for (i) public limited liability companies (sociétés anonymes), (ii) private limited liability companies (sociétés à responsabilité limitée), or (iii) corporate partnerships limited by shares (sociétés en commandite par actions).
The Luxembourg notary may refuse to draw up an incorporation deed in electronic format remotely only in specific cases such as (i) when the incorporation involves contribution in kind or (i) if the notary suspects that identity fraud is being committed or physical appearance is necessary to verify compliance with the rules regarding the party's legal capacity or its authority to represent the legal person on whose behalf it is acting.
It should further be noted that the Law provides that the share capital may be paid into an account opened in the name of the company with a credit institution established in any Member State. Proof of payment may also be provided online.
Branches
The Law provides that EU branches of a Luxembourg company must now be registered with the Luxembourg Register of Commerce and Companies.
Exchange of information between the registers
The Law pushes forward the exchange of information between Member States’ business registers. The idea is to avoid submitting the same information to public authorities more than once. For example, where a company is formed in one Member State but has a branch in another Member State, it should be possible for the company to submit certain changes to their company information only to the register where the company is registered, without the need to submit the same information to the register where the branch is registered.
Introduction of an ad hoc electronic exchange platform for notaries
The Chamber of Notaries is working on the implementation of an ad hoc electronic exchange platform which will become the main platform for all types of notarial documents (with the exception of wills).
The electronic exchange platform for notaries will allow notaries to:
- establish authentic instruments in electronic format;
- collect certificates of the electronic signatures and electronic stamps of the parties and the notaries;
- obtain data from public bodies and authorities;
- transmit data to public bodies and authorities.
Standard articles of association will be made available free of charge by the Chamber of Notaries.
The Law will enter into force on the first day following its publication in the Luxembourg official journal.
It should be noted that further EU reform on digital tools is underway as the EU Commission published in March a proposal for a directive amending the Directive to expand and upgrade the use of digital tools and processes in company law.
For more information, please contact Cédric Bless or Nicolas Marchand.
On 15 June 2023, the Luxembourg Parliament adopted bill of law n°7968 (the Law), taking further steps towards the digitalisation and modernisation of company law and the office of notary by partly transposing Directive (EU) 2019/1151 of the European Parliament and of the Council of 20 June 2019 amending Directive (EU) 2017/1132 as regards the use of digital tools and processes in company law (hereinafter the Directive).
The main novelty introduced by the Law is the possibility to incorporate (certain) legal entities online. The Directive also requires Member States to ensure that the registration procedure for branches of companies governed by the law of another Member State can also take place entirely online and introduces a general principle of non-discrimination between instruments, deeds and copies in electronic format, and paper instruments, deeds and copies issued by notaries.
Online incorporations
The Law introduces the possibility for the notary to remotely execute authentic incorporation deeds in dematerialised form. The incorporation process will thus take place entirely online, through an electronic platform and the signing of such deed could be done by means of an electronic signature.
The dematerialised incorporation process is possible for (i) public limited liability companies (sociétés anonymes), (ii) private limited liability companies (sociétés à responsabilité limitée), or (iii) corporate partnerships limited by shares (sociétés en commandite par actions).
The Luxembourg notary may refuse to draw up an incorporation deed in electronic format remotely only in specific cases such as (i) when the incorporation involves contribution in kind or (i) if the notary suspects that identity fraud is being committed or physical appearance is necessary to verify compliance with the rules regarding the party's legal capacity or its authority to represent the legal person on whose behalf it is acting.
It should further be noted that the Law provides that the share capital may be paid into an account opened in the name of the company with a credit institution established in any Member State. Proof of payment may also be provided online.
Branches
The Law provides that EU branches of a Luxembourg company must now be registered with the Luxembourg Register of Commerce and Companies.
Exchange of information between the registers
The Law pushes forward the exchange of information between Member States’ business registers. The idea is to avoid submitting the same information to public authorities more than once. For example, where a company is formed in one Member State but has a branch in another Member State, it should be possible for the company to submit certain changes to their company information only to the register where the company is registered, without the need to submit the same information to the register where the branch is registered.
Introduction of an ad hoc electronic exchange platform for notaries
The Chamber of Notaries is working on the implementation of an ad hoc electronic exchange platform which will become the main platform for all types of notarial documents (with the exception of wills).
The electronic exchange platform for notaries will allow notaries to:
- establish authentic instruments in electronic format;
- collect certificates of the electronic signatures and electronic stamps of the parties and the notaries;
- obtain data from public bodies and authorities;
- transmit data to public bodies and authorities.
Standard articles of association will be made available free of charge by the Chamber of Notaries.
The Law will enter into force on the first day following its publication in the Luxembourg official journal.
It should be noted that further EU reform on digital tools is underway as the EU Commission published in March a proposal for a directive amending the Directive to expand and upgrade the use of digital tools and processes in company law.
For more information, please contact Cédric Bless or Nicolas Marchand.