An advantage of a General Partnership is that the business is not subjected to taxation. Therefore, non-resident partners are not taxed under Luxembourg taxation laws. Another advantage is that this type of business is simple to establish since the paperwork is relatively simplified. There is no minimum capital required to register a SENC so another advantage is that this type of company can work regardless of income, property or growth expectations. Also, only two shareholders are required to start the company and since there is no maximum number of shareholders, there are a lot of options for funding.

A General Partnership is formed by doing a partnership agreement between at least two individuals and/or legal persons. This can be done via a notary act or a private deed. After this, the company must be registered with Luxembourg Trade and Companies Register. A trading license must also be obtained from the Ministry of Small and Medium-sized Businesses. Upon registration, the company name can only include the names of the shareholders, as described below.

As mentioned, the shareholders are two or more individuals and/or legal persons. There is no maximum number of shareholders. The liability of the shareholders is joint, several and unlimited. This means that the shareholders’ personal assets are liable to the partnership. It should be noted that all partners are required to be qualified as a trader.

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

Shares in a SENC are registered shares only. They are generally non-transferable unless by unanimous decision by all partners and if the transfer follows the rules set out in the articles of association.

A SARL-S is managed by one or multiple business managers being 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. Where there is no appointed business manager, the partners are all considered as such.

This meeting is attended by all shareholders and is chaired by the business managers of the company. They can be ordinary or extraordinary and should follow procedures set out in the articles of association.

There is no appointed board of directors in a General Partnership but if the purpose of the company will be commercial/consultancy activities, at least one of the shareholders has to fill the requirements in order to obtain business permit.

There are no internal auditors in a General Partnership.

An independent auditor is required to inspect the company’s books if an LLC exceeds two of the following for two consecutive financial 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)

Additionally, a registered auditor is required if all the partners are SAs, SARLs or SECAs or international companies comparable to such.

The company can be dissolved by the will, death, suspension or bankruptcy of one of the partners. An exception exists if the articles of association state otherwise. 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.

A General 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

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 dematerialized 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