The major benefit of a Limited partnership is the options for the type of shareholder one can be. For limited liability partners, their liability for debt is limited to their contribution. Therefore, it is easier to obtain financing from other parties who wish to invest in a company while having limited liability. Additionally, since there is no need for a notary or no requirement for the partnership agreement to be made public, the registration process is speedy. Also, confidentiality can be maintained as the identity of limited partners are not required to be released. Another benefit of a Limited Partnership is the exemption from taxation as a business. Therefore, non-resident partners are not taxed under Luxembourg taxation laws.

A Limited Partnership is formed by doing a partnership agreement between at least two persons. After this, the company must be registered with Luxembourg Trade and Companies Register. Upon registration, the company name must include the surname of at least one of the general partners, as described below.

A Limited Partnership requires at least two shareholders, one with unlimited liability, referred to as the general partner, and another one with limited liability. For a company with multiple general partners, all liability is joint and unlimited. The limited liability shareholder is only liable for liabilities of the Limited Partnership up to a sum matching his own contribution.

There is no minimum capital required in order to register a SECS.

Shares in a SECS are registered shares only. They can be both transferable or non-transferable. Limited partners shares are transferable after consent of all partners.

The general partners in a Limited Partnership are responsible for the management and representation of it. Contrastingly, limited liability shareholders do not have any management responsibilities or controlling rights. Alternatively, the general partners can appoint a manager.

Unlike a PLC or an LLC, a general meeting for a Limited Partnership does not carry the same weight. They do not deal with acts that modify the partnership agreement or affect the interaction of the company with third parties. Decisions are only made by consent of all general partners.

A Limited Partnership may or may not have a board of directors. This board, if present, will comprise of the general partners of the business. Therefore, the board is not elected or replaced by votes. As mentioned, they are responsible for the management of the Limited Partnership if its business activities include commercial activities at least one of the directors/shareholders has to fill the requirements in order to obtain business permit.

There are no internal auditors in a Limited Partnership.

An independent auditor is required to inspect the company’s books if a Limited Partnership exceeds two of the following for two consecutive years:

    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)

An independent auditor is also required if the partners are SAs, SARLs, SECAs or any other legally comparable companies.

Liquidation requires procedures from the partnership agreement to be followed strictly. A liquidator and a liquidation auditor are usually required in order to provide appropriate reports. After all creditors are paid, the remaining assets are distributed to the shareholders proportionally to their contributions.

A Limited Partnership is not subjected to taxation as a business. The shareholders of the partnership are taxed based on their share of the income and assets, along with their other personal income and assets.

 

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/p>

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 the 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 dematerialized securitie

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