Key changes to Luxembourg company law following the transposition of the Mobility Directive

On 23 January 2025, the Luxembourg legislature adopted Bill No. 8053 (the “Mobility Law”), amending the law on commercial companies and the law on the Trade and Companies Register for the purpose of transposing Directive (EU) 2019/2121 of the European Parliament and of the Council of 27 November 2019 (the “Mobility Directive”).

The Mobility Directive aims to harmonise the rules applicable to corporate mobility within the European Union. Our Associate Sébastien Rimlinger summarises the main changes introduced by the Mobility Law in our carousel:

Scope of the Mobility Law:

• Enhanced protection for minority shareholders
• Enhanced protection for creditors
• Enhanced protection for employees
• Increased scrutiny by notaries
• Effective date of cross-border transactions
• Transitional period

Scope of the Mobility Law

The Mobility Law introduces a specific regime for cross-border transactions within the EU, including cross-border mergers, divisions and conversions (each a “Cross-Border Transaction”).

These transactions concern the following types of Luxembourg companies:

• Public limited liability companies (sociétés anonymes – SA); or
• Partnerships limited by shares (sociétés en commandite par actions – SCA); or
• Private limited liability companies (sociétés à responsabilité limitée – SARL).

Enhanced protection for minority shareholders

• A right of exit for shareholders who voted against the proposed merger, together with a right to receive cash compensation;
• A right for shareholders to challenge the share exchange ratio, where applicable, and claim a corresponding cash payment. The company resulting from the Cross-Border Transaction may also provide shares or other compensation instead of a cash payment;
• Enhanced information rights, including detailed explanatory reports from the management body.

Enhanced protection for creditors

• Creditors whose claims arose before the publication of the common draft terms of the European cross-border merger and had not yet fallen due at the time of publication, and who are not satisfied with the safeguards offered in the proposed Cross-Border Transaction, may apply to the court for adequate safeguards;
• Enhanced information rights.

Enhanced protection for employees

Employees have the right to receive information on the consequences of the Cross-Border Transaction and its effects on:

• employment;
• employment relationships and the measures to be taken to preserve them;
• significant changes to employment conditions;
• the location of the business activities;
• the potential consequences of the above matters for the company’s subsidiaries.

Increased scrutiny of the legality of transactions by the notary

In the context of a Cross-Border Transaction, the notary will play a more significant role in reviewing the legality of the proposed transaction, notably by issuing a certificate confirming compliance with all relevant conditions and the proper completion of all procedures and formalities in the Grand Duchy of Luxembourg.

Effective date of the cross-border transaction

With respect to third parties, the effective date of a Cross-Border Transaction is determined by the law of the Member State of destination.

As between the parties, the Cross-Border Transaction is completed once the foreign notary registers the transaction following the prior legality review carried out by the Luxembourg notary.

Transitional period

The Mobility Law will apply to Cross-Border Transactions for which the draft terms are published on the first day of the month following the entry into force of the Mobility Law.

➡️ For any questions regarding company law or how the Mobility Law may affect or support your business operations, please contact our experts Nicolas Bernardy or Sébastien Rimlinger.