Why choose a SA?
A PLC in Luxembourg has a number of benefits. It is particularly beneficial due to the limited liability of the shareholders. These shareholders are only liable up to the amount of their contribution to the company’s share capital. Thus, creditors cannot pursue personal assets of shareholders to pay business debts. Another advantage of a PLC is that anyone can invest and therefore, there are more options for funds. Additionally, the risk is more spread out as more people buy shares. This company also benefits from the ability to issue shares that are easily transferable, that is, bearer shares.
Company registration
In order to form a Public Limited Company, the company’s articles of association must be recorded by a notary. After this, these articles of association must be published in the Official Bulletin (Memorial C) and lodged with Luxembourg’s Trade and Companies Register.
Shareholders
A PLC requires at least one natural or legal person for formation. This person is not required to be a citizen or resident of the country.
Minimum capital
The minimum capital of a PLC is 30,000 EUR. The minimum capital must be paid in full and can be either cash or non-cash or a combination of both. A minimum of 25% of the nominal value of each share is required to be paid upon formation of the PLC.
Shares
In a PLC, there are two types of shares: bearer shares and registered shares. These shares can include voting rights or not. For those with registered shares, the names are kept in a share register.
Management
Management of a PLC is undertaken by a board of directors or can be delegated to particular members of the board.
General shareholders meeting
All decisions affecting the PLC are made via general meeting. This meeting must be convened annually.
Board of directors
In a PLC, the board of directors must consist of at least one person for a company with one shareholder and at least three persons otherwise. The board members are not required to be shareholders or to be nationals or residents of the country. A new board is appointed every six years with possibility of reelection. This election occurs by general meeting. If its business activities include commercial activities at least one of the directors or shareholders has to fill the requirements in order to obtain business permit.
Supervision
The supervision of a PLC is done by one or more commissaires. These people do not necessarily have to be shareholders but they can be.
Statutory auditor
An independent auditor is required to inspect the company’s books if an LLC exceeds two of the following:
-a balance sheet sum of 3,125 million EUR
-a net turnover of 6,25 million EUR
-50 full-time employees (average of the year)
Liquidation
If 50% of the company’s share capital is lost, the board meets within 2 months to discuss potential liquidation. If 75% is lost, the company is liquidated if 25% of the votes in the general meeting vote in favour of it.
Taxation
An LLC is liable to corporate taxation (IRC) at a rate of 16.05% per year for profit up to 15,000 EUR (profit = income – expenses) and 19.26% for profit exceeding 15,000 EUR. This tax includes contribution to the employment fund at a rate of 7%. The municipal business tax (ICC) will be due for commercial activities at a rate of 6.75% per year for profit exceeding 17,500 EUR. The dividends will liable to withholding taxation at a rate of 15% per year (this rate can be reduce depending on the double Taxation Agreements that Luxembourg has with your country.
