LUXEMBOURG Law and Practice Contributed by: Romain Tiffon and Marie Bentley, ATOZ Tax Advisers
Partnership Limited by Shares (SCA) • Key characteristics – (a) hybrid of company and partnership; (b) liability: limited for limited partners but unlim - ited for at least one general partner; and (c) minimum share capital: EUR30,000. • Governance – (a) controlled by the general partner, who man - ages the company. • Typical uses – (a) often used for investment structures, and situ - ations where control needs to remain with a specific sponsor; and (b) allows public listing, while limiting takeover risk. Limited Partnerships (SCS and SCSp) • Key characteristics of the SCS ( common limited partnership ) – (a) legal personality: yes; (b) liability: limited partners have a limited liability and the general partner has an unlimited liabil - ity; and (c) minimum capital: none. • Key characteristics of the SCSp ( special limited partnership )(similar to SCS but with the following differences) – (a) no legal personality; and (b) highly flexible structure. • Governance – (a) typically managed by the general partner. • Typical uses – (a) very popular for private equity, investment funds and joint ventures; and (b) favoured due to contractual flexibility, absence of capital requirements, and tailored govern - ance arrangements. Simplified Joint Stock Company (SAS) • Key characteristics – (a) liability: limited; (b) minimum share capital: EUR30,000; and (c) cannot publicly offer shares. • Governance – (a) must have at least a chairman, but governance is otherwise flexible. • Typical uses – (a) suitable for start-ups and joint ventures;
Rulings of the Administrative Tribunal can be appealed before the Administrative Court ( Cour administrative ), which has the final say. The standard deadline to initiate a judicial challenge is three months from: • the notification of the refusal decision; or • the date on which the investor became aware of it. 3. Corporate Vehicles 3.1 Most Common Forms of Legal Entity Luxembourg offers a wide range of corporate forms, but in practice the most commonly used vehicles are as follows. Private Limited Liability Company (Sàrl) • Key characteristics – (a) liability: limited to contributions; (b) minimum share capital: EUR12,000; and (c) minimum shareholders: one. • Governance – (a) managed by one or more managers; and (b) managers may or may not be shareholders. • Typical uses – (a) most widely used corporate form in Luxem - bourg; (b) suitable for holding companies, operational businesses and group subsidiaries; and (c) preferred where control over shareholders and flexibility are important. Public Limited Liability Company (SA) • Key characteristics – (a) liability: limited; (b) minimum share capital: EUR30,000; and (c) minimum shareholders: one. • Governance (flexible structure) – (a) one-tier system: board of directors; or (b) two-tier system: management board + supervi - sory board. • Typical uses – (a) suitable for large companies, public or listed companies, or structures seeking flexibility in financing instruments; and (b) can publicly offer shares.
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