Limited Liability Company

General Information

The société à responsabilité limitée is a corporate form used for companies which do not need to solicit funds from the public or to obtain listing of their shares on the stock exchange. The number of shareholders is restricted to 40; single partner limited liability companies are allowed and can either be formed at incorporation or by concentration of all shares in hands of one shareholder.

Incorporation

Formation by at least one person - individual or legal; nationality irrelevant.
Incorporation requires notarial deed followed by entry into commercial register and publication:
Notarial deed: Legal existence upon execution of the deed by the founding shareholder(s) and the notary
Registration with the Luxembourg Trade and Companies Register (Registre du Commerce et des Sociétés)
Publication in the Luxembourg Official Gazette (Mémorail C).

Duration of incorporation approximately one week.

Incorporation costs depend on share capital (at minimum share capital of
€ 12.400 notarial fees of approximately € 500 plus 12 % VAT, registration fees of € 145 and publication fees of € 500 - € 750 (depending on the text's length); as a general rule a capital duty of 1 % of the subscribed capital is also due)

Capitalisation and Financing

The statutory minimum share capital, which must be subscribed in full, amounts to € 12.400.
It must be paid up immediately upon incorporation either in cash or in kinds.

Board Structure

The S.à.r.l. is managed and represented by its manager(s) (gérant(s)) in and out of court. If there are several, the question of joint or individual power of representation can and must be decided upon by the founders and laid down in the articles of incorporation.

Shareholders' decisions are made by way of shareholders' resolutions. If the number of shareholders exceeds 25, resolutions must be taken at a general meetings. Otherwise the shareholders are not legally obliged to meet at all; their decisions may then be adopted in writing.

If the number of shareholders exceeds 25 the auditing of the company's business by one or more statutory auditors is required.

Law does not provide for the participation or the representation of the employees in corporate bodies.

Annual Costs

related to filings and publications.

Corporate Taxation and Financial Reporting

Resident companies are subject to corporate income tax on worldwide income. Top corporate tax rate is 22 % as basic rate, plus municipal business tax, plus 4 % surcharge on payable tax amount as contribution to unemployment fund, amounting to total maximum rate of 30 %. Substantial tax reductions for newly established businesses.

Annual accounts must be drawn up within six months of the end of the financial year. Accounts must consist of balance sheet, profit and loss statement and annex. Accounting must be done in accordance with Luxembourg GAAP.

Employee Participation in Corporate Bodies

None.