company law reform are you ready? Standard articles of association of an S.A.S.

Transcription

1 company law reform are you ready? Standard articles of association of an S.A.S.

2 Standard articles of association of an S.A.S. The eagerly awaited company law reform has now been adopted and we are pleased to provide you with ready-made articles of association for a société par actions simplifiée (S.A.S.). The law of 10 August 1915 on commercial companies, as amended (the Law ), will now provide further flexibility to the company law legal framework. The S.A.S., which is similar to the well-known French S.A.S., has been introduced into Luxembourg law adding yet another tool to the Luxembourg toolbox. An S.A.S. is particularly suitable if a highly flexible corporate governance structure is required. Please find below a non-exhaustive summary of the key features* of these standard articles of association as well as some other changes to the Law (not included in these standard articles of association) 1 : Share Capital - Shares - Minimum: *30,000 euro represented by shares with the same nominal value. The Law has introduced the possibility of issuing shares with different nominal values. Management - *Appointment of a chairman (président) (as opposed to a board in the S.A.) with the broadest management powers. The chairman may be a shareholder. - *The chairman may appoint at his own discretion one or several managing directors (directeurs) and determine their powers. - The chairman is not necessarily revocable ad nutum. Collective decisions of shareholders - *Exhaustive list of matters reserved to the shareholders. - *Absence of quorum and simple majority requirement only. - *Written circular shareholders resolutions permitted. * Please note that the key features contained in these standard articles of association are marked with an asterisk. 1 The corporate governance structure of an S.A.S. may be freely determined by shareholders. As a consequence, options are available to shareholders which may differ from the options contained in these standard articles of association (e.g. managing directors (directeurs) could be appointed by the chairman (président) himself, or by the shareholders at their own discretion or upon recommendation of the chairman, etc.). 2

3 SOCIÉTÉ PAR ACTIONS SIMPLIFIÉE A. NAME - PURPOSE DURATION - REGISTERED OFFICE Article 1 Name Legal form There exists a simplified limited company (société par actions simplifiée) under the name [***] (hereinafter the Company ) which shall be governed by the law of 10 August 1915 on commercial companies, as amended (the Law ), as well as by the present articles of association. Article 2 Purpose 2.1 The purpose of the Company is the holding of participations in any form whatsoever in Luxembourg and foreign companies and in any other form of investment, the acquisition by purchase, subscription or in any other manner as well as the transfer by sale, exchange or otherwise of securities of any kind and the administration, management, control and development of its portfolio. 2.2 The Company may grant loans to, as well as guarantees or security for the benefit of third parties to secure obligations of, companies in which it holds a direct or indirect participation or right of any kind or which form part of the same group of companies as the Company or otherwise assist such companies. 2.3 The Company may raise funds through borrowing in any form or by issuing any kind of notes, securities or debt instruments, bonds and debentures and generally issue securities of any type. The Company may however not publicly raise equity capital in any form. 2.4 The Company may carry out any commercial, industrial, financial, real estate or intellectual property activities which it considers useful for the accomplishment of these purposes. Article 3 Duration 3.1 The Company is incorporated for an unlimited period of time. 3.2 It may be dissolved at any time and with or without cause by a resolution of the meeting of shareholders adopted in the manner required for an amendment of these articles of association. Article 4 Registered office 4.1 The registered office of the Company is established in the City of Luxembourg, Grand Duchy of Luxembourg. 4.2 The registered office may be transferred within the same municipality or to any other municipality in the Grand Duchy of Luxembourg by a decision of the chairman (Président), (hereafter the Chairman ) and, as the case may be, the Chairman shall be authorised to record the relevant amendment of the articles of association in notarial form. 3

4 4.3 Branches or other offices may be established either in the Grand Duchy of Luxembourg or abroad by a decision of the Chairman. 4.4 In the event that the Chairman determines that extraordinary political, economic or social circumstances or natural disasters have occurred or are imminent that would interfere with the normal activities of the Company at its registered office, the registered office may be temporarily transferred abroad until the complete cessation of these extraordinary circumstances; such temporary measures shall not affect the nationality of the Company which, notwithstanding the temporary transfer of its registered office, shall remain a Luxembourg company. B. SHARE CAPITAL SHARES Article 5 Share capital 5.1 The Company s share capital is set at thirty thousand euro (EUR 30,000), represented by thirty thousand (30,000) shares with a nominal value of one euro (EUR 1) each. 5.2 Without prejudice to article 6, the Company s share capital may be increased or reduced by a resolution of the meeting of shareholders adopted in the manner required for an amendment of these articles of association. 5.3 The Company may repurchase its own shares subject to the relevant provisions of the Law. Article 6 Authorised capital 6.1 The authorised capital, including the share capital, is set at [***euro (EUR ***)], consisting of [*** (***)] shares with a nominal value of one euro (EUR 1) each. During a period of five (5) years from the date of incorporation or any subsequent resolutions to create, renew or increase the authorised capital pursuant to this article, the Chairman is hereby authorised to (i) issue shares, (ii) grant options to subscribe for shares or (iii) issue any other instruments convertible into shares within the limits of the authorised capital to such persons and on such terms as the Chairman shall see fit, except by way of public offering, and specifically to proceed with such issue without reserving a preferential right to subscribe to the shares issued for the existing shareholders or, if the Chairman decides to reserve such preferential right, to have a second round of preferential subscription. Such authorisation may be renewed through a resolution of the meeting of the shareholders adopted in the manner required for an amendment of these articles of association, each time for a period not exceeding five (5) years. 6.2 The authorised capital of the Company may be increased or reduced by a resolution of the meeting of shareholders adopted in the manner required for an amendment of these articles of association. Article 7 Shares 7.1 The Company s share capital is divided into shares, each of them having the same nominal value. 7.2 The shares of the Company are in registered form only. 7.3 The Company may have one or several shareholders. 4

5 7.4 Death, suspension of civil rights, dissolution, bankruptcy or insolvency or any other similar event regarding any of the shareholders shall not cause the dissolution of the Company. Article 8 Register of shares - Transfer of shares 8.1 A register of shares shall be kept at the registered office of the Company, where it shall be available for inspection by any shareholder. This register shall contain all the information required by the Law. Ownership of shares is established by registration in said share register. Certificates of such registration shall be issued upon request and at the expense of the relevant shareholder. 8.2 The Company will recognise only one holder per share. In case a share is owned by several persons, they shall appoint a single representative who shall represent them in respect of the Company. The Company has the right to suspend the exercise of all rights attached to that share, except for relevant information rights, until such representative has been appointed. 8.3 The shares are freely transferable among shareholders. 8.4 Any transfer of registered shares shall become effective (opposable) towards the Company and third parties either (i) through a declaration of transfer recorded in the register of shares, signed and dated by the transferor and the transferee or their representatives, or (ii) upon notification of a transfer to, or upon the acceptance of the transfer by the Company. C. DECISIONS OF THE SHAREHOLDERS Article 9 Collective decisions of the shareholders 9.1 The meeting of shareholders is vested with the power to resolve on the following matters only: - increase of the authorised capital and/or the issued share capital without prejudice to article 6.1; - capital amortisation or decrease; - merger, de-merger or similar reorganisation; - dissolution; - conversion into another form of company; - appointment or removal of statutory or independent auditors; - appointment or removal of the Chairman; - approval of annual accounts; and - allotment and distribution of profits or other available reserves. Powers not reserved to the meeting of shareholders by the Law or these articles of association are vested with the Chairman. 9.2 Each shareholder may participate in collective decisions irrespective of the number of shares he owns. 5

6 9.3 The Chairman may suspend the voting rights of any shareholder in breach of his obligations as described by these articles of association or any relevant contractual arrangement entered into by such shareholder. 9.4 A shareholder may individually decide not to exercise, temporarily or permanently, all or part of his voting rights. The waiving shareholder is bound by such waiver and the waiver is mandatory for the Company upon notification to the latter. 9.5 In case the voting rights of one or several shareholders are suspended in accordance with article 9.3 or the exercise of the voting rights has been waived by one or several shareholders in accordance with article 9.4, such shareholders are entitled to receive written shareholders resolutions (for information purposes only) and may attend any general meeting of the Company but the shares they hold are not taken into account for the determination of the conditions of quorum and majority to be complied with at the general meetings of the Company or to determine if written resolutions have been validly adopted. 9.6 Collective decisions may be validly adopted by means of written resolutions, except in case of proposed amendments to these articles of association. To this effect, each shareholder shall receive the full text of the resolutions to be adopted and shall cast his vote in writing. Shareholders shall notify the Chairman of their vote by mail, or facsimile within eight (8) days of notification of the text of the proposed resolutions. 9.7 In the case of a sole shareholder, such shareholder shall exercise the powers granted to the meeting of shareholders under the provisions of section IVbis of the Law and by these articles of association. In such case, any reference made herein to the meeting of shareholders shall be construed as a reference to the sole shareholder, depending on the context and as applicable, and powers conferred upon the meeting of shareholders shall be exercised by the sole shareholder. Article 10 Meetings of shareholders Meetings of shareholders are convened by the Chairman with eight (8) days prior notice or such shorter notice as the Chairman may duly justify in the convening notice and shall be held at such place and time as may be specified in the respective convening notices of meeting. If all of the shareholders are present or represented at a meeting of shareholders and have waived any convening requirement, the meeting may be held without prior notice. Article 11 Quorum, majority and vote 11.1 Each share entitles to one vote in meetings of shareholders Except as otherwise required by the Law or these articles of association, resolutions at meetings of shareholders duly convened shall be adopted at a simple majority of the votes validly cast regardless of the portion of capital represented. Abstention, blank and nil votes shall not be taken into account. Shares which may not be voted by virtue of specific agreements shall not be taken into account for any purpose. Article 12 Amendments of the articles of association Any amendment of the articles of association requires the approval of a simple majority of the votes validly cast at the meeting regardless of the portion of capital represented, except where the Chairman is entitled to amend the articles of association on matters not reserved to the meeting of shareholders. 6

7 Article 13 Change of nationality The shareholders may change the nationality of the Company by a resolution adopted in the manner required for an amendment of these articles of association. Article 14 Right to ask questions 14.1 One or several shareholders holding together at least ten percent (10%) of the share capital or the voting rights may submit questions in writing to the Chairman relating to transactions in connection with the management of the Company as well as companies controlled by the Company; with respect to the latter, such questions shall be assessed in consideration of the relevant entities corporate interest In the absence of a response within one (1) month, the relevant shareholders may request the president of the chamber of the district court of Luxembourg dealing with commercial matters and sitting as in summary proceedings to appoint one or several experts in charge of drawing up a report on such related transactions. D. MANAGEMENT Article 15 Chairman The Company shall be managed by the Chairman who can be an individual or a legal entity. In case the Chairman is a legal entity, an individual shall be appointed as its legal representative and will be subject to the same liability as if he were Chairman without prejudice to the joint and several liability of the entity he represents. Article 16 Powers of the Chairman 16.1 The Chairman is vested with the broadest powers to act in the name of the Company and to take any action necessary or useful to fulfil the Company s corporate purpose, with the exception of the powers reserved by the Law or by these articles of association to the meeting of shareholders Without prejudice to article 19, the Chairman may delegate, as and when he deems necessary, his powers to one or more persons for the exercise of specific functions or performance of certain duties or obligations In case of replacement of the Chairman, such delegations of powers will remain in force until they are revoked by the replacement Chairman. Article 17 Appointment, removal and term of office of the Chairman 17.1 The Chairman shall be appointed by the meeting of shareholders which shall determine his remuneration and term of office The Chairman shall be appointed and may be removed from office at any time, with or without cause, by a decision of the shareholders subject to the quorum and majority required for an amendment of these articles of association. Article 18 Vacancy in the office of the Chairman In the event of a vacancy in the office of the Chairman because of death, legal incapacity, bankruptcy, resignation or otherwise, such vacancy must be filled without undue delay by the meeting of shareholders. 7

8 Article 19 Managing directors 19.1 One or several managing directors may be appointed by the Chairman who shall determine their remuneration and terms of office The powers of the managing director(s) are determined by the decision appointing them within the scope of the powers of the Chairman The managing director(s) may be removed from office at any time, with or without cause, by a decision of the Chairman In the event of a vacancy in the office of the Chairman because of death, legal incapacity, bankruptcy, resignation or otherwise, the managing director(s) shall stay in office until a new Chairman is appointed If the Company has a Chairman and one or several managing directors, a reference to the Chairman is to be construed as a reference to the Chairman and to the managing directors where appropriate. Article 20 Conflicts of interest 20.1 Where the Chairman has, directly or indirectly, a financial interest conflicting with the interest of the Company in connection with a transaction falling within the competence of the Chairman, such conflict shall be specifically recorded in written resolutions of the Chairman. Any such conflict of interest must be reported to the next general meeting of shareholders prior to such meeting taking any resolution on any other item Where any managing director has, directly or indirectly, a financial interest conflicting with the interest of the Company in connection with a transaction, the decision must be taken and recorded in writing by the Chairman The conflict of interest rules shall not apply where the decision of the Chairman or the managing director(s) relates to day-to-day transactions entered into under normal conditions. Article 21 Dealing with third parties The Company shall be bound towards third parties in all circumstances by (i) the signature of the Chairman or one of the managing directors, if any, or by (ii) the sole signature or joint signature of any person(s) to whom such signatory power may have been delegated by the Chairman or the managing director(s) within the limits of such delegation. E. AUDIT AND SUPERVISION Article 22 Auditor(s) 22.1 The transactions of the Company shall be supervised by one or several statutory auditors (commissaire(s)). The meeting of shareholders shall appoint the statutory auditor(s) and shall determine their term of office, which may not exceed six (6) years A statutory auditor may be removed at any time, without notice and with or without cause, by the meeting of shareholders. 8

9 22.3 The statutory auditor(s) have an unlimited right of permanent supervision and control of all transactions of the Company If the meeting of shareholders of the Company appoints one or more independent auditors (réviseur(s) d entreprises agréé(s)) in accordance with article 69 of the law of 19 December 2002 regarding the trade and companies register and the accounting and annual accounts of undertakings, as amended, the institution of statutory auditors is no longer required An independent auditor may only be removed by the meeting of shareholders for cause or with his approval. F. FINANCIAL YEAR ANNUAL ACCOUNTS ALLOCATION OF PROFITS INTERIM DIVIDENDS Article 23 Financial year The financial year of the Company shall begin on the first of January of each year and shall end on the thirty-first of December of the same year. Article 24 Annual accounts and allocation of profits 24.1 At the end of each financial year, the accounts are closed and the Chairman draws up an inventory of the Company's assets and liabilities, the balance sheet and the profit and loss accounts in accordance with the law Of the annual net profits of the Company, five percent (5%) at least shall be allocated to the legal reserve. This allocation shall cease to be mandatory as soon and as long as the aggregate amount of such reserve amounts to ten percent (10%) of the share capital of the Company Sums contributed to a reserve of the Company by a shareholder may also be allocated to the legal reserve if the contributing shareholder agrees to such allocation In case of a share capital reduction, the Company s legal reserve may be reduced in proportion so that it does not exceed ten percent (10%) of the share capital Upon recommendation of the Chairman, the meeting of shareholders shall determine how the remainder of the Company s profits shall be used in accordance with the Law and these articles of association Distributions shall be made to the shareholders in proportion to the number of shares they hold in the Company. Article 25 Interim dividends - Share premium and assimilated premiums 25.1 The Chairman may proceed with the payment of interim dividends subject to the provisions of the Law Any share premium, assimilated premium or other distributable reserve may be freely distributed to the shareholders subject to the provisions of the Law and these articles of association. 9

10 G. LIQUIDATION Article 26 Liquidation 26.1 In the event of dissolution of the Company in accordance with article 3.2 of these articles of association, the liquidation shall be carried out by one or several liquidators who are appointed by the meeting of shareholders deciding on such dissolution and which shall determine their powers and their remuneration. Unless otherwise provided, the liquidators shall have the most extensive powers for the realisation of the assets and payment of the liabilities of the Company The surplus resulting from the realisation of the assets and the payment of the liabilities shall be distributed among the shareholders in proportion to the number of shares of the Company held by them. H. FINAL CLAUSE - GOVERNING LAW Article 27 Governing law All matters not governed by these articles of association shall be determined in accordance with the Law. Arendt & Medernach SA 41A, avenue J.F. Kennedy L-2082 Luxembourg Registered with the Luxembourg Bar RCS Luxembourg B VAT LU LUXEMBOURG DUBAI HONG KONG LONDON MOSCOW NEW YORK Copyright Arendt & Medernach 07/