Responsibilities and liabilities for managers: What are the New tools?

Power to increase the share capital of an S.à r.l.

The New Law now recognises an increase in the authorised share capital of an S.à r.l. under the same rules that apply to an S.A. on condition that the shares are issued in favour of the existing shareholders of the S.à r.l. or to the beneficiaries that have been previously approved by the shareholders.

 

Possible not to pay distribution proceeds upon redemption of shares in an S.à r.l.

The New Law has introduced legal provisions authorising an S.à r.l. to redeem its own shares and further provides that the managers of an S.à r.l. can decide not to pay all or some of the distribution proceeds upon a redemption of its shares if, by doing so, the company would not be able to pay its debts as they become due.

Managers of an S.à r.l. who redeem shares by reducing the share capital or legal reserves contrary to the provisions of Article 182 paragraphs (2) to (7) (see item 2.2. above) shall be subject to imprisonment for a period of between one month to two years and to a fine of 5,000 to 125,000 euros, or to both of these penalties.

 

Issue of convertible bonds to the public

The New Law allows all types of companies, including an S.à r.l., to issue bonds to the public.

The board of managers of an S.à r.l. may also authorise the issue of convertible bonds provided, however, that they are issued to specific persons or identifiable persons in order to comply with the intuitu personae nature of the S.à r.l.

 

Suspension of voting rights

The articles of association can allow the management of an S.A. and an S.à r.l. to suspend the voting rights of shareholders in the event of a breach of the shareholders’ obligations under the articles of association.

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