Société à Responsabilité Limitée (SARL, LLC, Ltd)

In order to form a Limited Liability 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.

For a LLC, there must be at least 1 shareholders and no more than 100. They may be natural or legal persons. The name, occupations and residence of shareholders of every LLC must be kept in a register and each shareholder must be registered in the Trade and Companies Register.

The minimum capital of an LLC is 12,000 EUR. The minimum capital must be paid in full and can be either cash or non-cash or a combination of both.

At the time of registration of the company, the minimum capital is divided into registered shares of the same value. The minimum value of each share is 1 EUR.

A LLC is managed by one or multiple managing directors. This person does not have to be a shareholder nor does he or she have to be a resident.

This meeting is attended by all shareholders and is chaired by the managing director of the company. There is an option for annual meetings if the number of shareholders is 60 or less.

There is no requirement for a board of directors in an LLC. Instead, as mentioned prior, there can be one managing director or a number of managing directors, if its business activities include commercial activities at least one of the directors has to fill the requirements in order to obtain business permit.

When the number of shareholders of an LLC exceeds 60, an internal supervision is required. This person can be a shareholder or not.

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)

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)

Annual accounts of a LLC, including balance sheet, profit and loss account and other related notes are lodged with the Trade and Companies Register and published in the Official Bulletin (Memorial C).

Liquidation occurs after a decision is made to dissolve the company in an extraordinary general shareholders meeting in the presence of a notary. A liquidator and a liquidation auditor are required in order to provide appropriate reports to the shareholders. After all creditors are paid, the remaining assets are distributed to the shareholders.

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.