The major benefit of a Partnership Limited by Shares is the options for the type of shareholder one can be. Since partners can have varying liability, there are a number of following advantages: firstly, a general partner with unlimited liability can increase the company’s capital without decreasing their own power, and secondly, limited partners can invest without being liable beyond their contributions. Thus, financing can be attained from other parties who wish to invest in a company while having limited liability. Also, confidentiality can be maintained as the identity of limited partners are not required to be released.

In order to form a Partnership Limited by Shares, the corporation’s articles of association must be recorded by a notary. After this, these articles of association must be lodged with Luxembourg Trade and Companies Register. One personally liable shareholder must be mentioned in the articles of association.

A SECA requires at least two shareholders, one with unlimited liability, referred to as a general partner, and one with limited liability. The limited liability shareholder is only liable for liabilities of the SECA up to a sum matching his own contribution.

The minimum capital of a SECA is 30,000 EUR. This only refers to the contributions of the limited liability shareholders. There is no minimum capital requirement with regard to the contributions of the general partners. At least 25% of the minimum capital must be paid on the date of registration.

At the time of registration of the company, the minimum capital is divided into registered shares of the same value. These shares are freely transferrable for limited and general partners.

The board of directors is responsible for the day-to-day SECA management.

Unlike a PLC or an LLC, a general meeting for a Partnership Limited by Shares does not carry the same weight. They do not deal with acts that modify the articles of association or affect the interaction of the company with third parties.

The board of directors in an SECA consists of the general partners of the company. Therefore, the board is not elected or replaced by votes. As mentioned, they are responsible for the SECA management. 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.

In a SECA, supervision is done by at least three commissaire.

An independent auditor is required to inspect the company’s books if an LLC exceeds two of the following:

  • a balance sheet sum is more than 4,4 million EUR
  • a net turnover of 8,8 million EUR
  • 50 full-time employees (average of the year)

For a SECA, the directors of the board will make a decision to dissolve the company in an extraordinary general shareholders meeting at the presence of a notary. Half of the share capital is required to be present at the meeting and a two-third vote is required.

The SECA is liable to corporate taxation (IRC) at the 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 the rate of 7%. The municipal business tax (ICC) will be due for commercial activities at the rate of 6.75% per year for profit exceeding 17,500 EUR. The dividends will be liable to withholding taxation at the rate of 15% per year (this rate can be reduced depending on the Double Taxation Agreements that Luxembourg has with your country).

 

SARL

SECA

SA

SE

Conditions

Minimum EUR 12,000 fully subscribed and paid up

Minimum EUR 30,000 fully subscribed with ¼ paid up on formation

Minimum EUR 120,000 fully subscribed with ¼ paid up on formation

Contributions

Contributions in cash or in kind (valuation by a statutory auditor, except for SARLs)

Contributions in industry (services or expertise) are not generally considered to form part of the share capital, but they can be recorded in the statutes and benefit from remuneration in the case of an SA or an SARL

Company shares

Registered company shares that can be transferred under strict conditions

Freely transferable registered or bearer shares/bonds or dematerialised securities

Constitutional document

Notarial deed published in full

Notarial deed published in full in the electronic compendium of companies and associations (Recueil électronique des sociétés et associations - RESA) and in the Official Journal of the European Union

Legal personality

Each capital company has a legal personality which is distinct from that of its partners
As a legal person, it has rights and obligations under commercial, accounting and fiscal law

Assets

A capital company holds its own assets

Decision-making bodies

General meeting + business manager or management board

General meeting

General meeting and board of directors meeting or general meeting, management board and supervisory board

Monitoring and legal auditing of accounts

Internal auditor (commissaire aux comptes) or statutory auditor (réviseur d’entreprises) for SARLs with more than 60 partners

Obligation to audit the company by a statutory auditor depends on size criteria

Internal auditor or approved statutory auditor

Obligation to audit the company by a statutory auditor depends on size criteria

Accounting and financial information

Annual accounts lodged with the Trade and Companies Register (Registre de Commerce et des Sociétés - RCS)

Number of partners

between 1 and 100

at least 2 (one limited partner and one general partner)

at least 1

Financial liability

Liability limited to the amount of contributions

Limited liability for the limited partner but unlimited liability for the general partner

Liability limited to the amount of contributions

ULTIMATE

  • Statutes and bylaws drafting
  • Notary fees
  • Power of attorney
  • Application for VAT
  • Capital bank account
  • Tax advise
  • Business permit

PREMIUM

  • Statutes and bylaws drafting
  • Notary fees
  • Power of attorney
  • Application for VAT
  • Capital bank account
  • Tax advise
  • Business permit

BASIC

  • Statutes and bylaws drafting
  • Notary fees
  • Power of attorney
  • Application for VAT
  • Capital bank account
  • Tax advise
  • Business permit