Bill of Law n°6777 (the Bill of Law or the New Law) which
establishes a new simplified type of private limited liability
company ("société à responsabilité
limitée simplifiée", "S.à
r.l.-S") or "company for 1 Euro" was voted on by the
Luxembourg Parliament on 13 July 2016. The Council of State
(Conseil d'État) granted an exemption from a second vote
on 18 July 2016. The New Law should be enacted soon and will enter
into force on 16 January 2017. The New Law shall amend the law of
10 August 1915 on commercial companies and the law of 19 December
2002 on the register of commerce and companies and the accounting
and annual accounts of undertakings.
The aim of this Bill of Law is to stimulate entrepreneurship in
Luxembourg and facilitate business creation, by reducing the costs
linked to incorporation, putting into place a faster, simplified
and efficient incorporation process, and reducing the subscription
and payment requirements.
Main characteristics of the S.à r.l.-S
The S.à r.l.-S will constitute an alternative to the
private limited liability company ("société
à responsabilité limitée") already
regulated by the Luxembourg law dated 10 August 1915 on commercial
companies, as amended (the Law).
The legal rules of the S.à r.l. shall apply unless
otherwise provided for the S.à r.l.-S as follows:
The S.à r.l.-S can be
incorporated by either a private or notarial deed.
Only one or several natural persons
may become shareholders of a S.à r.l.-S. This entity would
become void if an entity became a shareholder.
A natural person is only authorised
to own shares in one S.à r.l.-S, otherwise his personal
liability will be unlimited in the second S.à r.l.-S.
However, an exception is permitted in case of the transfer of
shares following the death of a shareholder.
The corporate object of the
S.à r.l.-S shall be restricted to activities requiring a
business license application, which shall be obtained before filing
of the S.à r.l.-S.
The S.à r. l.-S shall be
managed by individual persons only.
The company shall have corporate
share capital of between €1 and €12,000. All shares of
the company shall be fully paid-up and subscribed ab initio.
In order to counterbalance the low
share capital, the New Law provides for the creation of a
non-distributable reserve. Each year, at least 5% of the net
profits shall be allocated to the reserve. The allocation to such
reserve shall cease to be compulsory when the sum of the reserve
and the subscribed share capital has reached €12,000.
There is an obligation to transform
the S.à r.l.-S into another legal form if the share capital
(without the above reserve) exceeds the maximum amount
The S.à r.l.-S can be
incorporated for an unlimited period of time.
The corporate denomination must be
stated either in full as société à
responsabilité limitée simplifiée or in an
abbreviated form as S.à r.l.-S.
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