Corporate law
Luxembourgian law distinguishes six various legal forms for a company:
- the general/ordinary partnership;
- the limited partnership;
- the corporation;
- the association limited by shares;
- the limited-liability company;
- the co-operative.
In practical terms, the corporation (here, AG or SA) and the limited-liability company (here, LLC, GmbH or SARL) have prevailed as the most prevalent forms of organisation.
| Corporation | Limited-liability company | |
| Establishment | The company is founded by notarial certification; the articles of incorporation are deposited in the trade (commercial) registry and published in the corresponding gazette (FR: Mémorial). | Idem |
| Capital | Minimum capital: EUR 31,000.00 –of that amount, ¼ deposited. Bearer and nominal shares are permitted. | Minimum capital: EUR 12.500, deposited in its entirety. The capital is parcelled out into nominal shares. |
| Liability | Liability on the part of shareholders is limited to the amount of registered corporate capital. | Idem |
| Shareholders | At least one partner; individuals or corporate entities, native Luxembourgers or foreigners, regardless of location of residence. In the course of establishment, Luxembourg Consulting Group can act as an authrised representative or shareholder, based on a trustee agreement. | Idem |
| Shares | Nominal or bearer shares possible – the keeping of a share registry is not required. Transfer: by simple handover. | The partners must each be recorded in the commercial registry. |
| Shareholders’ meeting | The ordinary shareholders’ meeting will convene on the date indicated in the articles of incorporation. | An ordinary shareholders’ meeting as indicated in the articles of incorporation is only required if the number of partners / shareholders exceeds 25 persons. |
| Administrative council | The partners appoint the administrative council, which is in charge of managing the company; the administrative council may confer upon one (or several) of its members(s) the responsibility for managing day-to-day business activities. The administrative council consists of at least one member – who does not necessarily have to be a shareholder; applicable law encompasses no requirements concerning the nationality / residence status of the members of the administrative council. If the company has more than one shareholder, the administrative council must consist of at least three members. | The partners appoint one (or several) general manager(s), who does/do not necessarily have to be a shareholder / shareholders. Applicable law encompasses no requirements concerning the nationality / residence status of the general manager. |
| Annual report | The annual report consists of the balance sheet, the profit-and-loss accountand the annex; following its adoption by the shareholders, the annual report is deposited to the commercial registry. A notice of this deposit will be published in the relevant gazette (here, Mémorial C). | Idem |
| Auditor involvement | For smaller corporations, the annual report is evaluated by a controller. For larger corporations, there is a legally codified requirement for the involvement of an auditor. | Smaller LLCs are not required to have their annual reports audited, as long as the number of partners/shareholders does not exceed 25 persons. Larger LLCs must – depending on their size and the number of partners / shareholders – appoint a controller or auditor. |
| Investment in kind | The “investment in kind“ requires a survey by an independent auditor. | For LLCs, no survey by an independent auditor is required – however, it is still recommended for liability reasons. |
