A Private Limited Liability Company (Société à responsabilité limitée, SARL) in Luxembourg is a corporation whose assets are, in principle, wholly liable for the company‘s liabilities. A SARL is equivalent to a private company limited by shares in the United Kingdom, and a Limited liability company in the United States.
A Limited Liability Company (SARL) in Luxembourg can be formed for the carrying on of commercial or non-commercial purposes. Notwithstanding this, insurance companies as well as financial sector companies are not permitted to be formed in the form of a Limited Liability Company.
A Company name of Private Limited Company must necessarily end in “GmbH” or “SARL” and must be approved by the Companies Register. Prior to the formation, it is highly advisable to verify the availability of the name chosen by the shareholders for the new corporation with the Luxembourg Trade Register in order to avoid any confusion with any existing company. Within two or three days from a written request, the Luxembourg Trade Register is able to grant a certificate of free denomination in this respect.
ARTICLES OF ASSOCIATION
The articles of association are drawn up by the founding shareholders and then submitted to a notary. The articles of association may be written in Luxembourgish, French, German or English. If originally written in English, a translation to Luxembourgish, French, or German must be included.
At the incorporation, the articles of association shall be signed by the shareholders and the notary. Shareholders may assign a proxy to represent at such incorporation in Luxembourg, which may be granted to lawyers. The newly created corporation may then begin its activities.
The incorporation deed as well as the articles of association must be registered with the Luxembourg capital duty office and then filed with the Luxembourg trade register by the notary subsequent to the notarization of the deed (within a month in principle as from the incorporation). These must then be published in the Luxembourg official gazette.
The minimum number of shareholders in a Company is 1 and the maximum is 40. A shareholder can be a physical or legal person of any nationality. Notwithstanding this, the formation of a single-person Private Liability Company (Société à Responsa¬bilité limitée unipersonelle) with a sole shareholder is possible. The provisions which apply to a Private Liability Company essentially, equally apply to a single-person Private Liability Company (Société à Responsabilité limitée unipersonelle). Moreover, the shareholders of a Private Liability Company in Luxembourg must always be registered in the Trade and Companies Register.
A Luxembourg SARL company should have a minimum authorized share capital of 12,500 Euros of which must be contributed in full. The capital is divided into registered shares, each having the same value. The said value is required to be at least 25 EUR.
The paid-up capital is blocked in a Luxembourg bank account opened under the name of the corporation to be formed during the process of its formation. This provides confirmation to the notary that the funds have been received, when the shares are subscribed in cash. The setting up of such bank account (including the KYC procedure for the banks) is often the key element in the timing required for the formation of a corporation (one to two weeks are in principle required).
The share capital may be expressed in any foreign currency, provided that the amount converted in Euros meets the minimum amounts required by the Companies Law.
Transfer of company shares:
- shares are not freely transferable;
- they can only be transferred between living persons to non-partners with the consent of the partners’ general meeting representing at least 3/4 of the share capital;
- the transfer of shares must be recorded in a notarized deed or in a private deed.
The minimum number of directors is one. A director can be a physical or legal person of any nationality.
Every Company is required to have a registered office and address in Luxembourg which should be notified to the Trade Register.
In the interest of Luxembourg business and commerce, and to allow for the appropriate supervision of commercial activity, legislation sets out conditions for entry into certain professions and for the carrying out of certain trading activity, which are subject to the granting of a business license.
The granting of a business license is not required for corporations, which have as their principal object, the taking of shareholdings in Luxembourg or foreign companies (e.g. Soparfis).
A business license is personal and granted to individuals by the Ministry of Middle Classes after being advised by a committee, which considers the applicant’s professional qualifications and respectability.
For companies, the conditions relating to professional qualifications and respectability need to be fulfilled by an individual in charge of the direction or management of the company.
The general meeting is convened by the managing director(s) of a Private Liability Company in Luxembourg and consists of all shareholders. If the number of shareholders does not exceed 25, the holding of a general meeting annually is optional.
Normally 1 week, however a priority claim can be requested
RECURRING MAINTENANCE FEES AS FROM 2ND YEAR
Provision of Registered office.