Simplified Limited Liability Company in Luxembourg
Simplified Limited Liability Company (Société à responsabilité limitée simplifiée – SARL-S) is subject to rules that are different to Private Limited Liability Company (SARL). The main feature of the SARL-S is that, for founders, it reduces the burden of some of the requirements for registering an SARL.
The minimum share capital required to form an SARL-S is one Euro, and the company can be formed by private deed, without a notary. This type of the company gives first-time businessmen with a vehicle that allows to commence trading immediately. Only natural persons can register SARL-S’s. A natural person cannot be a shareholder in more than 1 simplified company unless shares were transferred to them following the death of another shareholder. On the other hand, a natural person can be a shareholder in an SARL-S and another company having a different type of legal form.
Simplified Limited Liability Company incorporation procedure
Here is Private Limited Liability Company incorporation procedure divided into 3 main stages:
Stage 1: Corporate bank account registration
The first stage to start a SARL-S in Luxembourg is to open a corporate bank account where the share capital will be transferred.
Stage 2: Registration of a company name
The stage is to choose the company name, followed by preparation of the Articles of Association, which together with the shareholders and directors or managers’ details have to be filed with the RCS. Lawyers in Luxembourg or a public notary have to prepare the formation documents.
Stage 3: Applying for a business license
The last stage of the company formation process comprises applying for the business license with the Ministry of Economy and filing with the tax authorities in Luxembourg.
Register Simplified Limited Liability Company
Register Simplified Limited Liability Company (SARL-S) in Luxembourg jurisdiction with our professional assistance.
Simplified Limited Liability Company management
The day-to-day management of the company, as well the representation of the company in managerial matters, can be delegated to one or more managers, directors or other representatives acting alone or jointly.
The SARL-S company is bound by the actions of the managers, even if these actions surpass the company’s purpose.
The management of the SARL-S is entrusted to one or more natural persons – who might also be shareholders – appointed by the shareholders, in the articles of association or company’s subsequent general meeting of shareholders, for a limited or unlimited term. Except for actions requiring a decision by the shareholders, as provided for by law or in the articles of association, the manager/s can undertake any action they deem necessary or useful for achieving the corporate purpose.
Structure of managerial bodies
Simplified Private Limited Liability Company is managed by one or more managers, who can or cannot be shareholders, appointed by the shareholders, in the articles of association or subsequent deed, for a limited or unlimited term. The shareholders’ assembly represents the SARL-S capital and takes all decisions regarding the latter.
Shareholders
Simplified Private Limited Liability Company can have between 1 and 100 shareholders. SARL-S’s shareholder must always be natural persons. An SARL-S cannot have a company as a shareholder. A natural person can only be a shareholder in 1 Simplified Private Limited Liability Company, unless shares in another company were transferred to them further to a death.
Shareholders' meeting
The shareholders’ arrangements are taken at general meetings of shareholders. Shareholders meeting apply the same rules as Private Limited Liability Company.
Liability
The founders of the company and, in the event of a capital increase, the managers are jointly liable regarding third parties for one of the following:
- the difference between the subscribed capital and the minimum capital and any part of the capital that is not validly subscribed;
- the full payment of the shares and the portion of the capital for which the company have subscribed;
Remedying any damages arising from:
- the company’s nullity;
- omissions or inaccurate statements in the company’s deed of incorporation.
The deed of incorporation of the company can restrict the label of founder to subscribers who, together, hold at least 1/3 of the share capital, in that case, all the other SARL-S’s shareholders mentioned in the deed of incorporation will be deemed as the simple subscribers. The shareholders are accountable to the extent of the amount of their contribution to the share capital. The company is required by the actions undertaken by the manager/s, even when they surpass the corporate purpose, unless it can be proven that the third party involved knew, or could not have been unaware of, that the action surpassed the corporate purpose. If several managers are appointed, the SARL-S can define their joint and/or individual duties and powers, in which case the latter have to be declared to the Electronic Compendium of Companies and Associations (RESA) for publication and then become enforceable against third parties. Managers are liable to the company for carrying out the duties entrusted to them, and for any misdeeds committed in performing such duties.
Auditor oversight
SARL-S’s with over 60 shareholders are subject to compulsory oversight by one or more internal auditors named in the articles of association. Auditors can also be shareholders.
Simplified Private Limited Liability Company which, on the balance sheet closing date after 2 consecutive years of operation, excels the thresholds specified in two of the three criteria mentioned below, is legally needed to have company accounts audited by a statutory auditor:
- balance sheet total: EUR 4.4 million;
- net turnover: EUR 8.8 million;
- average number of full-time employees: 50.
Simplified Limited Liability Company registration conditions
SARL-S’s can only be incorporated by craftsmen, traders, manufacturers and certain liberal professionals, and the purpose of the SARL-S company have to be specified in its deed of incorporation.
Anyone who wishes to form a Simplified Private Limited Liability Company is obligated to first apply for a business permit from the Ministry of the Economy. The permit will be obligated to register the company with the Trade and Companies Register (RCS). An SARL-S may be formed by private deed and the notarized document is not required.
Share capital
The share capital of an SARL-S must be at least one Eur and no more than 12 000 Eur. It should be fully subscribed and paid up when the company is registered. The contributions of the SARL-S’s shareholders must be in kind or in cash.
Form of company shares
The shares in a Simplified Private Limited Liability Company are registered shares. Shares in the SARL-S’s capital and profit shares cannot be issued to the public. Shares in the company’s capital and profit shares cannot be negotiable securities – they may only be registered share certificates – issued to registered shareholders. Private bond issues are permitted, but the shareholders’ approval is required with convertible bonds.
Transfer of company shares
The SARL-S shares aren’t freely negotiable. Shares with voting rights cannot be transferred inter vivos to anyone other than shareholders or holders of profit shares with voting rights without the approval of the general meeting of the company’s shareholders representing at least 75% of all share capital. If provided for in the articles of association, the proportion of the share capital demanded approval can be lower, but not less than 50%. Share transfers are obligated to be recorded in a private deed or a notarized deed.
Documents
An SARL-S must be set up in the presence of a notary.
The deed of incorporation must contain certain legally demanded information:
- natural or legal person/s identity who signed the deed, or on whose behalf the deed was signed;
- form and name of the company;
- company’s head office address;
- purpose of the company/business;
- subscribed share capital amount;
- the different classes of shares;
- contributions in kind details;
- any other non-cash considerations at the time of company registration details;
- the sum of shares or securities that do not form part of the share capital, and the rights attached thereto, if applicable;
- when not provided for by law, the obligations governing the operation, administration and oversight of the SARL-S company;
- company duration;
- at least an approximation of the company’s costs.
Company name
Company is obligated to have a name that is registered in its deed of incorporation, and its name has to be different from that of any other existing company. To find out whether the SARL-S company name is available, contact the Registre de commerce et des sociétés – RCS. The company name, followed by the wording “SARL-S”, is obligated to appear on all legal company documents.
Cost
Setting up an SARL involves certain costs, including:
- a share capital contribution of at minimum at EUR 1;
- notary fees;
- the address of the company’s head office;
- trade and Companies Register (RCS) publication cost;
- statutory auditor fees (if statutory audits are required);
- any costs relevant to the issuance of administrative permits.
Value Added Tax
VAT, based on the following criteria:
- if SARL-S annual turnover excluding taxes is less than 112 000 Eur: VAT returns have to be filed annually;
- if company’s annual turnover excluding taxes is between 112 000 Eur and 620 000 Eur: VAT returns must be filed quarterly;
- if its annual turnover excluding taxes exceeds 620 000 Eur: VAT returns must be filed every month.
Legal publications
An SARL-S must apply for registration with the company register.
The formality of registering the Simplified Private Limited Liability Company with the Trade and Companies Register (Registre de commerce et des sociétés – RCS) demands the disclosure of the following information about the company:
- the trade or SARL-S name and, where applicable, any abbreviations or commercial sign used;
- the legal form of the company and, any additional details required by law;
- the exact address of the company’s head office;
- the purpose of the company;
- the amount of the share capital.
The SARL-S must disclose the identities of its shareholders, their private or professional addresses and the number of shares they hold and its business permit number.
All subsequent changes should be filed with the RCS for publication in the RESA.
All the company’s legal documents must bear:
- the name of the company;
- the term “société à responsabilité limitée simplifiée“;
- the address of company’s head office;
- the Trade and Companies Register registration number;
- signatory of the legal document capacity.
There is no obligation to mention the share capital.
The company’s financial statements should be filed with the Luxembourg Register of Trade and Companies within seven months of the closing of the financial year – 6 months to hold the general meeting of shareholders, plus 1 month from the meeting.
Timeline
The period of register SARL-S in Luxembourg engagement approximately 4 weeks. It comprises Engagement planning company incorporation, corporate bank account approval, corporate internet banking approval, engagement completion.
Duration of Private Limited Liability Company
A SARL-S may be formed for a limited or unlimited duration.
Conversation
If the number of shareholders is over 100, the SARL-S has one year to change its legal form. It will also be obligated to change its legal form if the share capital exceeds 12 000 Eur. The decision to change the type of legal form of the SARL-S company is taken at a meeting of shareholders.
Private limited Liability Company is able to change its corporate form in the course of its lifetime with shareholder decision.
If the number of shareholders exceeds 100, the PLLC has one year to change its legal form.
The rules on mergers and demergers, which are likely to bring about a change in legal form, apply to PLLCs.
Dissolution
SARL-S may be dissolved for:
- company's duration expires;
- completion or extinction of company's business purpose;
- judicial ruling to dissolve the SARL-S for legitimate reasons;
- voluntary dissolution decided on by all shareholders or by the single shareholder at the meeting of shareholders.
Unless companies’ articles of association specify otherwise, a Simplified Private Limited Liability Company is not automatically dissolved in the event of the death, disqualification, bankruptcy or insolvency of one of the company’s shareholders.
All documents establishing the voluntary dissolution of the SARL-S must be accompanied by the following administrative certificates:
- a certificate issued by the Data-Processing, Membership and Contributions Centre of the Joint Social Security Centre (CCSS);
- a certificate issued by the Inland Revenue;
- a certificate issued by Administration de l’enregistrement, des domaines et de la TVA.
Consultation about company registration
The specialists of our company have years of experience and the knowledge to register a company in Luxembourg. Our lawyers, accountants, and business consultants will help you with registering a company in Luxembourg and with the further conduct of your business.
Accountancy
Read about obligations regarding bookkeeping for Luxembourgish company.
Taxes
Obligations and requirements regarding taxes in Luxembourg.
Bank account
If you decide to open a company in Luxembourg, you have to create a Corporate Account. This type of account needs for the main business of the company, for internal expenses, payment for services, and providing net income for private entrepreneurs.
Other types of companies
If you feel like Simplified Limited Liability Company does not fit your needs, click the button below and you will see other legal forms like Public Limited Company, Private Limited Liability Company, Branch Office, Holding Company and more.
Register Simplified Limited Liability company
Ready for next step
Accelerate your business growth while we take care of corporate bank account and bookkeeping.