Partnership limited by shares (SCA)
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A partnership limited by shares (société en commandite par actions - SCA) is a commercial company. It combines features of a limited partnership (société en commandite simple - SCS) with those of a public limited company (société anonyme - SA).
The main difference between an SCA and an SCS is that the ownership shares of an SCA are freely transferable, while those of an SCS are not.
The benefit of an SCA is that its management is stable.
Who is concerned
An SCA is formed with at least 2 shareholders, namely a general partner and a limited partner.
The main difference between general partners and limited partners is their respective liability.
Prerequisites
An SCA may be formed for any business purpose.
Any person wishing to set up a company to do business in Luxembourg must have the authorisations/approvals required to carry out the activity.
General partners must be authorised to do business as traders.
This is not a requirement for limited partners.
Costs
Setting up an SCA entails certain costs, including:
- notary fees;
- the cost of publication in the Trade and Companies Register (Registre de commerce et des sociétés - RCS);
- a share capital contribution of at least EUR 30,000;
- any costs related to the issuance of administrative permits; and
- statutory auditor fees, if a statutory auditor is required.
How to proceed
Deed of incorporation
The SCA's deed of incorporation is drafted by a notary.
A report by a statutory auditor is required if a contribution in kind is made to the SCA.
The law specifies a list of mandatory information that must be included in the articles of association:
- the identity(ies) of the natural person(s) who signed the deed, or on whose behalf the deed was signed;
- the form;
- the company name;
- the corporate purpose;
- the registered office;
- the amount of subscribed share capital and, where applicable, the amount of authorised share capital;
- whether the shares are registered, bearer or dematerialised shares, and any additional or derogation clause which may override the law;
- the share classes and their characteristics;
- where applicable, a description of each contribution in kind;
- the cause and content of special benefits granted upon the company's formation;
- where applicable, the number of securities or shares that do not form part of the share capital, and the rights attached thereto;
- the rules that determine the number of and method of appointing the members of the bodies that represent the company with respect to third parties, that administer, manage, oversee or audit the company; and the rules that determine the distribution of authority among these bodies if it deviates from the law;
- the duration of the company; and
- at least an approximation of the company's formation costs.
The deed of incorporation is to be published in full in the Trade and Companies Register (RCS).
Company name
The name of the SCA is established in its deed of incorporation.
The name must be different from that of any other existing company.
To find out whether the company name is available, the RCS should be contacted.
Duration of the SCA
The duration of the SCA is established in the articles of association.
The company may be established for a limited duration or an unlimited duration.
Capital
The minimum amount of capital needed to form an SCA is EUR 30,000.
The capital is made up of shares. It must be fully subscribed and paid up to at least 25 % on the date on which the SCA is formed.
Contributions in cash or in kind are possible, but must be paid up within 5 years of subscription.
Contributions in kind are subject to an assessment report drawn up by a statutory auditor (réviseur d’entreprises).
Contributions in industry are not part of the share capital, but can be included in the articles of association and remunerated by profit shares.
Form of shares
Shares are registered shares until they are fully paid up. Fully paid up shares then become:
- registered shares;
- bearer shares; or
- dematerialised shares.
Bearer shares are signed by the managers.
General partners' shares may have priority rights.
Shares may be issued to the public.
It is possible to create shares which are not representative of the share capital called 'profit shares'. The SCA's articles of association determine the rights attached to such shares.
An SCA may issue shares without voting rights:
- when the company is formed, if stipulated in the articles of association; or
- when a capital increase takes place.
A register of registered shares that establishes their ownership must be kept at the registered office. Owners can request a certificate.
The general meeting of shareholders may, by way of a statement in the articles of association of the company, authorise the manager(s), where appropriate, to increase the share capital on one or more occasions, up to a specified amount.
Transfer of shares
Shares are freely transferable for limited and general partners.
Managerial structure
Shareholders’ meeting
Unless otherwise specified in the articles of association, the general meeting of shareholders (which includes the general and limited partners) draws up and ratifies deeds that concern the company with respect to third parties.
The general meeting decides on:
- amendments to the partnership agreement;
- any relocation of the registered office of the SCA that will result in a change of nationality;
- the conversion or liquidation of the SCA.
The general meeting is convened by:
- the manager; or
- the limited partners who represent 10% of the capital.
The general meeting shall decide annually on the annual accounts and the management report at the latest within 6 months after the end of the financial year.
Managers
The company is managed by one or more managers, who may or may not be general partners and are appointed in accordance with the articles of association. In practice, a manager may be appointed either in the articles of association or at a later date by a shareholder decision.
The managers do not form a board, and their powers are concurrent unless stipulated otherwise in the articles of association.
A manager can be a legal person. In such cases, there is no need to appoint a natural person to carry out their mandate.
The restrictions on the managers' powers are not binding on third parties, even if they have been made public. Nonetheless, it is possible, through the articles of association, to assign responsibility to one or more managers to represent the company, either alone or jointly, in acts or in court. This clause is then enforceable against third parties provided that it has been published in the RCS.
Supervisory board
The company is overseen by at least 3 internal auditors.
The supervisory board also issues recommendations on questions submitted by the manager, and authorises actions that surpass the manager's remit.
It performs its duties on behalf of the shareholders.
Liability
The general partners have joint and several liability for the commitments of the company.
Limited partners are liable up to the level of their contributions to the share capital. They are not authorised to take part in the day-to-day management of the company; by doing so, they would forfeit their benefit of limited liability.
The company is bound by the actions undertaken by the manager(s), even when they surpass the corporate purpose, unless it can be proven that the third party involved knew, or could not have been unaware of the fact that the action surpassed the corporate purpose given the circumstances.
The managers are liable to the company for their misconduct in carrying out the mandate entrusted to them.
The members of the supervisory board are accountable for misconduct in carrying out their mandate.
The legislation stipulates a variety of criminal penalties for violating corporate law.
Obligations
Keeping of a register
The SCA must keep a register of registered shares which contains :
- a list of all of partners, who must be clearly identified;
- the share ownership of each;
- the details of the payments made; and
- all transfers, conversions of bearer and dematerialised shares.
Oversight by a statutory auditor
The legal audit of accounts must be delegated to one or more approved statutory auditors (réviseur d’entreprises agréé) in any company which, on the balance sheet date after 2 consecutive financial years, exceeds 2 out of the following 3 criteria:
- a balance sheet total of EUR 4.4 million;
- a net turnover of EUR 8.8 million;
- an average number of 50 full-time employees.
An audit by an approved statutory auditor supersedes the responsibility of the internal auditors and they also carry a broader mandate than the one granted to the latter.
Legal publications
In order to register the company with the RCS, certain information about the company must be disclosed:
In addition, the SCA must file the following with the RCS:
- the complete deed of incorporation, along with any subsequent amendments;
- information on appointments and assignments of duties of the various management bodies and on liquidators, where applicable;
- information on the custodians of the bearer shares;
- certain legal decisions;
- where applicable, information on the dissolution of the company;
- annually, the status of the share capital, following the balance sheet;
- the annual financial statements;
- the management report;
- the internal auditors' report or statutory auditors' report.
- any change in the registered office.
Any subsequent changes must be filed with the RCS for publication.
All deeds, invoices, advertisements, publications, letters, order forms and other documents issued by partnerships limited by shares must contain:
- the corporate name;
- the notation 'partnership limited by shares' written legibly and spelled out;
- the exact address of the registered office;
- the words "R.C.S. Luxembourg" followed by the registration number.
The corporate financial statements must be filed with the RCS within one month of their approval and no later than 7 months after the close of the financial year.
Accounting aspects
The SCA is required to submit the following documents, which must be approved by the general meeting:
- a balance sheet;
- the profit and loss accounts;
- the annexes and the management report.
SCAs can draw up an abbreviated balance sheet if, on the balance sheet date, they do not exceed 2 out of 3 of the following criteria:
- a balance sheet total of EUR 4.4 million;
- a net turnover of EUR 8.8 million;
- an average number of 50 full-time employees.
SCAs can draw up an abbreviated profit and loss account if, on the balance sheet date, they do not exceed 2 out of 3 of the following criteria:
- a balance sheet total of EUR 20 million;
- a net turnover of EUR 40 million;
- an average number of 250 full-time employees.
Tax aspects
Partnerships limited by shares are subject to the following fees and taxes:
- a fixed registration fee;
- property tax;
- business tax;
- net wealth tax;
- corporate income tax;
- VAT, based on the following criteria:
- if the annual turnover excluding taxes is less than EUR 112,000: VAT returns must be filed annually;
- if its annual turnover excluding taxes is between EUR 112,000 and EUR 620,000: VAT returns must be filed quarterly;
- if its annual turnover excluding taxes exceeds EUR 620,000: VAT returns must be filed monthly.
Conversion
The SCA may change its corporate form in the course of its lifetime through a decision by the shareholders.
The rules on mergers and demergers, which are likely to bring about a change in legal form, apply to SCAs.
Dissolution
An SCA may be dissolved for the following reasons:
- the expiry of the term if the SCA was created for a fixed term;
- completion or extinction of its business purpose;
- judicial dissolution for just cause or because of unlawful activities; or
- voluntary dissolution decided by the shareholders' meeting.
It will also be dissolved by the death, insolvency (financial ruin), interdiction or bankruptcy of the general partner. The articles of association may provide for the possibility to replace the general partner in one of these situations, which will avoid the dissolution of the SCA.
Dissolution with liquidation happens in 3 distinct stages:
- convening of a 1st extraordinary general meeting of shareholders to approve the dissolution of the company, the opening of the liquidation, the appointment of a liquidator and the scope of their powers;
- once the liquidation is completed and the liquidator's report is available, a second extraordinary general meeting of shareholders is convened to consider the liquidator's report and to appoint a liquidation auditor;
- once the report of a liquidation auditor is available, a 3rd extraordinary general meeting of shareholders is convened to approve the reports of the liquidator and the liquidation auditor, to grant discharge to the liquidator and the liquidation auditor for the performance of their duties and to dissolve the company.
A company that is in the process of being dissolved retains its legal personality for the purposes of its liquidation.
Who to contact
House of Entrepreneurship
-
House of Entrepreneurship
- Address:
- 14, rue Erasme L-1468 Luxembourg Luxembourg
- Phone:
- (+352) 42 39 39 330
- Email address:
- info@houseofentrepreneurship.lu
Closed ⋅ Opens Monday at 8.30
- Saturday:
- Closed
- Sunday:
- Closed
- Monday:
- 8.30 to 17.00
- Tuesday:
- 8.30 to 17.00
- Wednesday:
- 8.30 to 17.00
- Thursday:
- 8.30 to 17.00
- Friday:
- 8.30 to 17.00
'Contact Entreprise' team at the Chamber of Skilled Trades and Crafts - Luxembourg
-
Chamber of Skilled Trades and Crafts Contact Entreprise
- Address:
-
2, circuit de la foire internationale
L-1347
Luxembourg-Kirchberg
Luxembourg
B.P. 1604, L-1016
- Email address:
- contact@cdm.lu
- Website:
- http://www.cdm.lu/
Luxembourg Business Registers
-
Luxembourg Business Registers (LBR)
- Address:
- Luxembourg
-
Luxembourg Business Registers (LBR) Luxembourg Office
- Address:
-
31, Avenue de la Gare
L-1611
Luxembourg
L-2961 Luxembourg
- Phone:
- (+352) 26 42 81
- Fax:
- (+352) 26 42 85 55
- Email address:
- helpdesk@lbr.lu
- Website:
- https://www.lbr.lu
Closed ⋅ Opens Monday à 9h00
- Saturday:
- Closed
- Sunday:
- Closed
- Monday:
- 9h00 à 12h00, 13h30 à 16h00
- Tuesday:
- 9h00 à 12h00, 13h30 à 16h00
- Wednesday:
- 9h00 à 12h00, 13h30 à 16h00
- Thursday:
- 9h00 à 12h00, 13h30 à 16h00
- Friday:
- 9h00 à 12h00, 13h30 à 16h00
Monday-Friday from 9.00 to 12.00 and from 13.30 to 16.00 /Registration helpdesk only by appointment. -
Luxembourg Business Registers (LBR) Diekirch Office
- Address:
-
Bei der Aaler Kirch - Place Joseph Bech
L-9211
Diekirch
B.P. 20 / L-9201
- Phone:
- (+352) 26 42 81
- Fax:
- (+352) 26 42 85 55
- Email address:
- helpdesk@lbr.lu
- Website:
- https://lbr.lu
Only on Monday by appointment.
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Related procedures and links
Procedures
Links
Further information
sur le site de la Chambre des métiers
Legal references
-
Loi modifiée du 10 août 1915
concernant les sociétés commerciales
-
Règlement grand-ducal du 5 décembre 2017
portant coordination de la loi modifiée du 10 août 1915 concernant les sociétés commerciales
-
Loi modifiée du 19 décembre 2002
concernant le registre de commerce et des sociétés ainsi que la comptabilité et les comptes annuels des entreprises
-
Loi du 27 mai 2016
modifiant, en vue de réformer le régime de publication légale relatif aux sociétés et associations, - la loi modifiée du 19 décembre 2002
