OPINION OF THE EUROPEAN CENTRAL BANK
at the request of the Luxembourg Minister fo r Relations with Parliament, the Grand Duchy of
Luxembourg, under Articles 109l (2) and 109f (6) of the Treaty establishing the European
Community and Article 5.3 of the Statute of the European Monetary Institute on a draftlegislative proposal to facilitate the redenominatio n of the capital of corporations in euro and
settle rounding problems in this connection
CON/98/48
1. On 21 September 1998 the European Central Bank (ECB) received a request from the
Luxembourg Minister for Relations with Parlia ment, the Grand Duchy of Luxembourg, for an
ECB Opinion on a draft legislative proposal No. 4456 (hereinafter referred to as the Draft
Act) regarding:
- the redenomination of the capital of commercial companies in euro, which modifies the law
of 10 August 1915 regarding commercial companies, as amended; and
- the differences that result from the application of the rules on rounding.
2. In accordance with Article 1091 (2) of the Treaty establishing the European Community
(hereinafter referred to as the Treaty), the E CB has taken over the advisory functions of the
European Monetary Institute (EMI), which went into liquidation upon the establishment of the
ECB on 1 June 1998. The ECBs competence to deliver an opinion is based on Article 1.1, first
indent, of the Council Decision (93/717/EC) of 22 November 1993 on the consultation of theEMI by the authorities of the Member States on draft legislative provisions, as the legislativeproposal contains provisions concerning currency regulation. In accordance with Article 17.5,first sentence, of the Rules of Procedure of the ECB, this ECB Opinion has been adopted by theGoverning Council of the ECB.
3. The ECB welcomes the Draft Act since it aims (a) to facilitate the redenomination of the capital
of corporations in euro through a procedure which is less time consuming and less expensive
than the capital increase provided for under the laws of Luxembourg, and (b) to settle rounding
problems that may occur as a result of such redenomination.
The Draft Act provides that the types of commercial corporations specified therein may
redenominate their capital from any national currency unit (with the exception of the ECU) ofthe Member States of the European Union to euro from 1 January 1999 until 31 December2001. In this connection, and in order to avoid rounding problems, the shareholders meeting
may also decide to increase the capital up to E1,000 for small corporations or up to 4% of the
capital for large corporations. This provision will facilitate the smooth introduction of the euro
by implementing simple and inexpensive measures which ease the redenomination of sharecapital in euro, as well as by introducing the possibility of capital adjustment in the event that awhole amount is preferred. Moreover, the non-par value share principle is foreseen inArticle 1(1) in parallel with a mere redenomin ation of the share in euro. This provision is
welcomed since it introduces flexibility and simplicity. This point was made in the Convention
of 4 May 1998, which states that non-par value shares should be encouraged in order to avoidtechnical problems.
The Draft Act simplifies the procedure of the shareholders meeting. Furthermore, in the spiritof Council Regulation (EC) No. 1103/97 of 17 June 1997, which provides, that from 1 January1999, references to the ECU in legal instruments shall be replaced by a reference to the euro at arate of E 1 to ECU 1, the Draft Act states that the board of directors may replace the reference
to the ECU, in the event that the capital of the corporation is expressed in ECU in the corporate
charter, by a reference to the euro. Obviously, such a measure would not constitute a capitalincrease because it shall occur by operation of law pursuant to Council Regulation (EC)No. 1103/97 of 17 June 1997. The provisions of the law of 10 August 1915 regarding publicitywill still apply to the decision regarding the simplified capital redenomination in euro, which iscrucial in order to ensure the dissemination of information.
Article 5 amends the provision of the law of 10 August 1915 on limited liability companies(SARL) regarding the minimum par value of the shares. According to the Explanatory
Memorandum, this provision allows limited liability companies to express their capital in anynational currency unit other than Luxembourg francs; however, the minimum par value of theshares must correspond to the minimum of LUF 1,000. This particular amendment is notconnected to the scope of the Draft Act, which concerns the redenomination of the capital ofcommercial corporations in euro.
Article 6 of the Draft Act is declaratory in natu re and states that, if the rounding conventions
pursuant to the Council Regulation (EC) No. 1103 /97 of 17 June 1997 are applicable, payments
effected or book entries constitute full repayment of the obligations and do not raise any liability
for indemnification. This provision is welcomed since it clarifies any uncertainties that may
arise with respect to the settlement of a debt.
4. The ECB confirms that it has no objection to this ECB Opinion being made public by the
competent national authorities at their discretion.
Done at Frankfurt am Main on 20 October 1998.
The President of the ECB
[signed]
Willem F. Duisenberg