The Luxembourg company law has introduced a new form of a limited liability company that will enter into force on 16 January 2017. Indeed, the Government, through its draft Law n°6777, implements its objective of creating an alternative to the ordinary Sàrl by introducing into Luxembourg law a simplified limited liability company or “Sàrl -S “, based on the German and Belgian models of the “Mini-GmbH” and the “Sàrl-Starter“.
The purpose of this innovation is is particular to make the company formation quicker and less costly in particular for businesses with low capital needs, such as start-ups in the field of IT and creative businesses. This is a measure that is destined at promoting entrepreneurship and to promote the setting up of start-ups. As previously mentioned, Luxembourg follows its European neighbors: France has the statute of Limited liability sole proprietorship or “EIRL”, Germany has the ” Unternehmergesellschaft ” also called “Mini -GmbH”, Belgium has the ” SPRL- Starter” , both of them are variations of their normal SARL. Dutch law has the “Flex -BV” which is a simplified regime of the “BV”.
This new type of company is a variation of the ordinary Sàrl. It mainly provides for more flexible incorporation conditions: a notarial deed will not be compulsorily required, leaving room for the possibility of a private deed.
A major innovation is the minimum share capital starting at 1 (one) euro . The share capital should be less than 12 000.00, which is the legal minimum for an ordinary SARL newly modified by the reform of the law on commercial companies of 1915. However, there is a requirement to establish a reserve by the payment of a percentage of annual net profit.
This SARL-S is open only to natural persons who can only be shareholder in one SARL-S in order to avoid abuses. The SARL-S must have a commercial activity which is subject to a license (autorisation d’établissement). It was decided not to restrict this form of company in a time limit so as not to discourage the use of this vehicle. The idea however is that the SARL-S is a transitory status and that entrepreneurs will eventually switch over to a traditional form of company once they have the required capital. It will also benefit of reduced costs amounting to 191.00 euros plus 70.00 euros of compulsory contribution to the Chamber of Commerce and 15.00 euros of registration fees in the Trade and Companies Register, much less than for an ordinary SARL. The new regime will become effective and SARL-S may be created as from 16 January 2017.