Luxembourg: entry into force of the law of 23 July 2016 creating the S.à r.l.-S

“The law dated July 23th 2016 introducing the S.à r.l.-S as a variant of the currently existing private limited liability company (Société à responsabilité limitée or S.à r.l.) in Luxembourg came into force on January 16th 2017.

The Law intends to stimulate the development of the entrepreneurial spirit by creating, for entrepreneurs that are natural persons, a legal structure that not only offers a protection in terms of personal liability, but also enhances their visibility. To this end, S.à r.l.-S is strictly reserved to physical persons as shareholders and only individual persons can become managers thereof. Furthermore, a physical person cannot become shareholder of several S.à r.l.-S on the same time, unless the parts have been transferred because of death.

The corporate object of the S.à r.l.-S must compulsorily relate to activities requiring a business licence application. Such business licence must be obtained prior to the constitution of the S.à r.l.-S since it must be filed upon filing the S.à r.l.-S with the Luxembourg register of commerce and companies. S.à r.l.-S may be incorporated with an initial corporate capital of Euro 1, which must be entirely subscribed and paid-up. Thus, the corporate capital of a S.à r.l.-S may be comprised between Euro 1 and Euro 12,000. The very limited amount of corporate capital is counterbalanced with the obligation for shareholders of such S.à r.l.-S to create a (non-distributable) legal reserve funded on a yearly basis by the allocation of one-twentieth (5%) of the net profits. Such allocation shall cease to be compulsory when the aggregate amount of the legal reserve and the corporate capital shall reach Euro 12,000. S.à r.l.-S must appear after the name of the company on all documents issued by the Company either in long form “société à responsabilité limitée simplifiée” or in short form “S.à r.l.-S”. S.à r.l.-S may be set up by a private deed, a special deed or a notarial deed, which will be published. The choice is up to the founder of the S.à r.l.-S.

The total amount necessary to incorporate the company, that is with all the required registrations and publications, would amount to Euro 191 with a yearly membership fee to the Luxembourg Chamber of commerce (Chambre de Commerce) of Euro 70“.

Read the full article on www.bsp.lu

 

Ref. Bonn Steichen & Partners, Corporate Legal Alert, www.bsp.lu

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