Last update 09.04.2020
The simplified shareholder company (société par actions simplifiées - SAS) is a legal form of company recently introduced in Luxembourg.
The company's capital is divided into shares. It is made up of one or more persons who only commit a specific stake.
Certain rules of the public limited company (SA) also apply to the SAS. The main appeal of this form of company lies in the limitation of the mandatory provisions applicable to its operation.
However, the freedom left to the partners in its incorporation requires that particular care is taken in the drafting of the articles of association.
An SAS can be established by either a natural or a legal person.
At least one partner is required. There is no limit to the number of partners.
Any person wishing to set up in Luxembourg in order to create a business must have the authorisations/approvals required to carry out the activity.
Setting up an SAS entails certain costs, including:
An SAS must be formed in the presence of a notary. An auditor's report is required in the case of a contribution in kind.
The articles of association are published in full in the RCS.
The law specifies a list of 14 pieces of mandatory information that must be included in the articles of association:
The SAS must have a company name that is established in its articles of association.
The name must be different from that of any other existing company.
To find out whether the company name is available, contact the RCS.
The duration of the SAS's existence must be set by its articles of association.
The company may be established for a limited duration or an unlimited duration.
An SAS may change its corporate form in the course of its lifetime by decision of the partners.
The company is automatically dissolved at the end of the duration of its lifetime specified in the deed of incorporation.
It may be dissolved by the partners, e.g. in the event of loss of share capital, or by court order for just cause or unlawful activities.
Each voluntary dissolution must be accompanied by administrative certificates from:
The dissolved company retains its legal personality for the purposes of its liquidation.
The minimum amount of capital needed to form an SA is EUR 30,000.
The SAS may be formed by means of subscriptions. The capital must be fully subscribed and paid up to the level of at least one quarter.
Cash contributions or contributions in kind are permitted.
Contributions in kind must be covered by an assessment report drawn up by a statutory auditor (réviseur d’entreprises).
The SAS cannot carry out a public issue of shares.
In the absence of specific provisions applicable to the SAS, the rules applicable to the public limited company also apply to the SAS.
Fully paid up shares are bearer shares, registered or dematerialised shares.
Registered or bearer shares may be converted into dematerialised shares and recorded in a securities account managed by an account holder, provided the conversion is provided for by the articles of association.
Shares may be created that are not representative of the share capital and that are designated as "profit shares". The articles of association determine the rights attached to these shares.
An SAS may issue shares without voting rights:
A record of registered shares that establishes ownership is to be kept at the registered office. Owners may request a certificate.
Bearer shares must be deposited with an authorised custodian.
Dematerialised shares are materialised when they are recorded in a securities account with an authorised body.
The articles of association determine the rules for the transfer of shares. They may provide for conditions regarding the approval of new partners.
Any transfer of shares made in violation of the provisions to the articles of association shall be null and void. This provision makes it possible, in particular, to ensure the closed nature of an SAS.
An SAS has the possibility to adopt a management structure.
The articles of association set out the conditions under which the company is managed as well as the decision-making procedures.
The articles of association may freely determine the functioning of the meeting of partners, such as the procedures for convening the meeting, the communication of documents, the voting and quorum procedures, etc.
The articles of association also determine the decisions that must be taken collectively by the partners in the forms and under the conditions laid down therein. This liberty is not total. As in the case of public limited companies, the law determines the decisions that must be taken collectively by the partners, namely:
The terms and conditions for the exercise of these prerogatives are set out in the articles of association.
At the first general meeting, before any vote on other resolutions, a special report shall be made on transactions in which the chairman would have had an interest opposed to that of the company.
If the company only has a single partner, the partner's decisions shall be recorded in the minutes or drawn up in writing.
The management of the company's affairs as well as the representation of the company with regard to such management shall be entrusted to a chairman. The chairman is vested with the broadest powers to act in all circumstances in the name of the company and within the limits of the corporate purpose.
The articles of association shall determine the procedures for his appointment, resignation or the duration of his term of office. The chairman can be one of the partners or a third party.
The law does not provide for mandatory management bodies other than the chairman. The articles of association may, however, create such bodies for the purposes of internal management and organisation of powers.
The articles of association may lay down the conditions under which a director may exercise the management powers of the chairman. The director has the same powers with regard to third parties as the chairman.
The office of chairman or director may be entrusted to a legal person.
In this case, the company must appoint a permanent representative to carry out this task in the name and on behalf of the legal person. It can only be revoked if a successor is designated at the same time.
If the chairman has, directly or indirectly, an interest of a proprietary nature opposed to that of the company on the occasion of a transaction that he is entitled to decide, this must be mentioned in the minutes of the transaction.
If a director has, directly or indirectly, an interest of a proprietary nature opposed to that of the company, the decision must be taken by the chairman. This must be recorded in the minutes of the decision.
These provisions do not apply to current transactions concluded under normal conditions.
In relations with third parties, the company is bound by the acts of the chairman even if they do not fall within the company's purpose. In the event of litigation, the company will be able to establish that the third party knew that the act exceeded the company's corporate purpose or that the third party could not have been unaware of it.
The mere fact that the articles of association are public is not sufficient proof.
The restrictions on a chairman's powers are not binding on third parties.
The chairman or the director take on no personal obligation concerning the commitments of the company.
The representative of a legal person entrusted with management is subject to the same conditions and assumes the same civil liability as if he were to carry out this task on his own account, without prejudice to the joint and several liability of the legal person that he represents.
The appointment and termination of the duties of the permanent representative are subject to the same rules of publicity as if he were performing such duties in his own name and for his own account.
Actions for or against the company are validly made in the name of the company alone.
The partners are liable to the extent of the amount of their contribution to the share capital.
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:
For companies that do not meet these criteria, oversight is nevertheless mandatory by one or more internal auditors (commissaires aux comptes), who may or may not be shareholders.
The articles of association are published in full in the RCS.
In order to register the company with the RCS, information about the company must be disclosed.
In addition, the SAS must file the following with the RCS:
Any subsequent changes must be filed with the RCS.
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.
An SAS must produce: balance sheet, profit and loss account, notes to the financial statements and management report, which must be approved by the general meeting of partners;
An SAS can draw up an abridged balance sheet if, on the balance sheet date, they do not exceed 2 out of 3 of the following criteria:
An SAS can draw up an abridged profit and loss account if, on the balance sheet date, they do not exceed 2 out of 3 of the following criteria:
The financial statements must be drawn up in accordance with the "Lux Gaap" rules.
The SAS is subject to the provisions concerning: