Société à Responsabilité Limitée Simplifiée (SARL-S)

In order to form a Simplified Limited Liability Company, no notary act is required. Instead the company can be formed by use of a private deed. The corporation’s articles of association must be written and lodged with Luxembourg’s Trade and Companies Register.

For a SARL-S, there must be at least 1 shareholder and no more than 100. They may be natural persons in the country and cannot be companies. The name, occupations and residence of shareholders of every SARL-S must be kept in a register and each shareholder must be registered in the Trade and Companies Register. Additionally, a shareholder cannot have shares in another SARL-S.

The minimum capital of a SARL-S is 1 EUR and the maximum share capital is 12000 EU. The minimum capital must be paid in full and can be either cash or non-cash or a combination of both. After registration, an annual payment of at least 5% of the company’s net profits is required to be paid to a reserve until the amount totals 12,000 EUR.

The shares are registered shares and they cannot be issued to the public. Shares with voting rights are only allowed to be transferred to another partner with voting rights upon approval from partners totaling 50% or 75% of the shares.

A SARL-S is managed by one or multiple business managers as appointed by shareholders during a general meeting. These business managers are not required to be shareholders or residents. The managers can be appointed for a limited or unlimited time

This meeting is attended by all shareholders and is chaired by the business managers of the company. There is minimum requirement of annual meetings if the number of shareholders greater than 60.

There is no appointed board of directors in a SARL-S but 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.

If the company has more than 60 partners, an internal supervision is required. This can be one or multiple persons, who can be shareholders or not.

An independent auditor is required to inspect the company’s books if an SARL-S exceeds two of the following for two consecutive financial years: -a balance sheet sum of 4,4 million EUR
-a net turnover of 8,8 million EUR
-50 full-time employees (average of the year)

A SARL-S cannot be dissolved by the death, suspension, bankruptcy or insolvency of one of the partners. An exception exists if the articles of association state otherwise.

A SARL-S 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.