On 16 January, 2017 the law of 23 July, 2016 introducing the
simplified private limited liability company (S.à r.l.-S)
entered into force. The new entrepreneur-friendly company will be
easy to incorporate and will only require a €1 minimum share
Luxembourg introduced the simplified private limited liability
company (société à responsabilité
limitée simplifiée) to stimulate
entrepreneurship. The S.à r.l.-S will enhance business
creation because entrepreneurs will benefit from its cost-efficient
and swift incorporation process and low subscription and payment
Main legal aspects of the S.à r.l.-S
The simplified private limited liability company may be used as
an alternative to the existing private limited liability company
(société à responsabilité
limitée - SARL).
On pain of nullity, only natural person(s) can incorporate, for
a limited or unlimited period of time, and be shareholder(s) of a
simplified private limited liability company.
Either a private or notarial deed can be used to incorporate
the simplified private limited liability company.
The corporate object of the simplified private limited
liability company shall be limited to the activities for which a
business license is required. Therefore, the company's
incorporation must be coordinated with the process of obtaining a
business license from the Luxembourg Ministry of Economy.
The subscribed share capital shall be comprised between €1
and €12,000. The share capital may be paid up by a
contribution in cash or in kind.
The management of the simplified private limited liability
company must be composed of natural person(s) only.
A natural person is authorized to own shares in only one
simplified private limited liability company. The breach of this
rule would result in the natural person's joint liability for
the obligations of all the other simplified private limited
liability companies of which he/she became a shareholder. An
exception to this rule occurs when a person, who already is a
shareholder of a simplified private limited liability company,
acquires shares in another such company further to the death of its
Every year, at least one-twentieth of the net profits must be
allocated to the creation of a reserve. The reserve allocations
shall cease to be compulsory when the sum of the reserve and the
subscribed share capital reaches the amount of €12,000.
If the shareholders of a simplified private limited liability
company wish to increase its share capital to an amount which,
together with the above reserve, exceeds € 12,000, the
simplified private limited liability company must be transformed
into another company form.
The incorporated company's denomination must state in full
"société à responsabilité
limitée simplifiée" or, in an abbreviated form,
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guide to the subject matter. Specialist advice should be sought
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In many of my writings I try to bring together my fascination for history with my professional and academic interest in the law.
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