The societal impact company (société d'impact sociétal - SIS) is open to all natural or legal persons, acting in an individual capacity or as part of a group, who wish to create a commercial company with a view to engaging in an economic activity with a social or societal purpose.
Only commercial companies that comply with the principles of the social and solidarity economy may be accredited as societal impact companies.
The SIS is meant for both existing enterprises or organisations and project sponsors who wish to engage in an economic activity with a social or societal purpose.
The Ministry of Labour, Employment and the Social and Solidarity Economy (Ministère du Travail, de l’Emploi et de l’Economie sociale et solidaire) has set up a service – the Maison de l’économie sociale et de l’innovation sociale – that provides personalised support (by appointment only) for the creation of an SIS.
The SIS offers a number of benefits for the entity concerned, including a clearly defined legal framework, an appropriate tax regime, and access to national and European public procurement contracts.
SIS accreditation affords the following benefits:
- a guarantee that the economic activities engaged in by the SIS are genuine and responsible;
- liberty to promote the social purpose of the company.
SISs are nevertheless subject to strict obligations in terms of transparency and governance.
Who is concerned
SIS accreditation is reserved for:
- public limited companies (sociétés anonymes - SA);
- limited liability companies (sociétés à responsabilité limitée - SARL);
- simplified limited liability companies (sociétés à responsabilité limitée simplifiées - SARL-S);
- cooperative companies (sociétés cooperatives – SCOP);
that comply with the principles of the social and solidarity economy.
Applications for SIS accreditation may be filed by existing companies as well as by companies in formation.
The accreditation application file must contain at least:
- the draft articles of association, concordant with the information provided in the application for accreditation; and
- all of the requested supporting documents.
Setting up an SIS entails certain costs, including:
- a minimum share capital (depending on the legal form of the company);
- the cost of publication in the Trade and Companies Register (registre de commerce et des sociétés - RCS);
- costs related to the issuance of administrative authorisations, where applicable;
- notary fees, if the services of a notary are required (depending on the legal form of the company);
- where applicable, approved statutory auditors' annual fees.
How to proceed
Deed of incorporation
An SIS may only be incorporated as a:
- public limited company (société anonyme - SA);
- limited liability company (société à responsabilité limitée – SARL);
- simplified limited liability company (société à responsabilité limitée simplifiée - SARL-S);
- cooperative company (société cooperative – SCOP).
The corporate purpose of an SIS must satisfy at least one of the following 2 conditions:
- provide support to persons considered to be vulnerable on account of:
- their economic or social circumstances;
- their personal circumstances, particularly their state of health or their need for social or medical and social support – such persons may be employees, customers/clients, members, adherents or beneficiaries of the SIS); or
- contribute to:
- preserving and developing social cohesion;
- combating health-related, social, cultural and economic exclusions and inequalities;
- promoting gender equality;
- maintaining and strengthening territorial cohesion;
- protecting the environment;
- developing cultural and creative activities;
- developing initial or ongoing training.
The economic activity must be an ongoing activity involving the:
- production; or
- distribution; or
- exchange of goods or services.
Particular attention should be paid to the following considerations:
- the precise definition of the corporate purpose and the societal impact sought;
- the identification of performance indicators that can be used to quantify the societal impacts achieved by pursuing the corporate purpose;
- the reinvestment of profits: at any time, impact shares must form at least 50% of the share capital.
Any amendment to the deed of incorporation or change in the conditions connected with accreditation must first be approved by the minister with responsibility for the social and solidarity economy.
The name of the SIS-accredited company must be established in its deed of incorporation.
The name must be different from that of any other existing company.
A company name availability search can be requested from the RCS.
The term of existence of an SIS-accredited company must be specified in its articles of association in accordance with the rules applicable to the company's legal form.
An SIS-accredited company may change its corporate form in the course of its existence further to a decision by the shareholders in accordance with the rules applicable to the company's legal form.
The rules on mergers and demergers, which might result in a change in the company's legal form, apply to SIS-accredited companies.
The SIS-accredited company is automatically dissolved at the end of the term specified in its articles of association.
It may be dissolved by its shareholders, for example, if the share capital is lost.
It may also be dissolved by a court decision if its accreditation is revoked because it no longer satisfies the requisite conditions.
Any document establishing the voluntary dissolution of an SIS must be accompanied by administrative certificates issued by:
- the Data-Processing, Membership and Contributions Centre (Centre informatique d'affiliation et de perception) of the Joint Social Security Centre (Centre commun de la sécurité sociale - CCSS);
- the Luxembourg Inland Revenue (Administration des contributions directes);
- the Registration Duties, Estates and VAT Authority (Administration de l’enregistrement, des domaines et de la TVA).
The dissolved company retains its legal personality for the purposes of its liquidation.
Regardless of the type of liquidation, any liquidation surplus must be donated to:
- another SIS whose purpose is the same as or comparable to that of the SIS being liquidated; or
- a foundation established under Luxembourg law or a non-profit organisation recognised as being of public interest by a Grand-Ducal regulation.
Form of company shares/units
The minimum share capital of an SIS-accredited company is set in accordance with the rules applicable to the company's legal form.
The share capital of an SIS-accredited company must be made up of:
- at least 50% impact shares/units, which confer no entitlement to dividends;
- no more than 50% distribution shares/unit, which confer entitlement to dividends, provided that the corporate purpose, as assessed using performance indicators, has been achieved.
All impact and distribution shares/units are registered shares and issued with a nominal value.
Impact shares/units may not under any circumstances be converted into distribution shares/units.
Profits allocated to impact shares/units may only be used to achieve the corporate purpose and are reinvested in full in maintaining and developing the activity of the SIS-accredited company.
Transfer of shares/units
Impact and distribution shares/units may be transferred in accordance with the rules applicable to the company's legal form.
However, if the SIS is dissolved or liquidated, holders of distribution shares/units as well as holders of impact shares may only be refunded to the extent of their initial contribution, provided that there are sufficient assets.
The rules on the management of an SIS-accredited company are established in accordance with the rules applicable to the company's legal form.
The management of an SIS must be autonomous, in the sense that it is fully able to:
- form and revoke its governing bodies; and
- control and organise all of their activities.
The liability regime applicable to the management bodies of an SIS-accredited company is established in accordance with the rules applicable to the company's legal form.
Supervision of the SIS
SIS accreditation does not exempt the company from complying with the supervision rules that it would normally be required to comply with, based on its legal form.
However, the SIS is also subject to supervision by the minister with responsibility for the social and solidarity economy, as regards compliance with the terms of its SIS accreditation.
The SIS must fulfil a number of special legal obligations, namely:
- impact shares must form at least 50% of the share capital of the SIS;
- employees' maximum annual remuneration must not exceed 6 times the annual social minimum wage;
- the SIS may not:
- borrow cash from its members, either directly or indirectly; or
- issue debt instruments to its members, either directly or indirectly.
The annual financial statements of an SIS must be accompanied by an annual financial report. The report, which must certify that the SIS fulfils its legal obligations, must be drawn up by:
- an approved statutory auditor, if the SIS's turnover or net assets exceed EUR 1,000,000;
- an internal auditor, if the SIS's turnover or net assets are between EUR 100,001 and EUR 1,000,000.
If the SIS's turnover or net assets are less than EUR 100,000, the report can be drawn up by the company itself, in the form of a self assessment.
Furthermore, all SIS-accredited companies must produce an annual non-financial impact report for their partners or shareholders. The report sets out details on the implementation of the performance indicators provided for in the SIS's articles of association.
The annual financial report and the non-financial impact report must be forwarded to the minister responsible for the social and solidarity economy within 2 weeks of the general meeting of shareholders/partners.
Should the company fail to fulfil its legal obligations, its accreditation may be revoked by the minister.
The formalities for registering the company with the RCS require that certain details on the SIS-accredited company be provided, depending on the legal form of the company. These details include:
- the company or trade name and, where applicable, any abbreviations and/or commercial signs used;
- the legal form of the company and, where applicable, the additional wording 'societal impact company', as required by law;
- the exact address of the registered office;
- the purpose of the company;
- the amount of the share capital – or an indication of the variable nature of the capital – and the number of impact and distribution shares forming the capital;
- the identity and private or business address of each person authorised to manage, administer and sign on behalf of the company in their capacity as a legal representative of the company, the signing rules, the date on which they were appointed and the date on which their mandate expires and, where applicable, their position and the corporate entity to which they belong;
- the date of the company's incorporation, its term, and the date and references of its ministerial accreditation.
Any subsequent changes must be filed with the RCS for publication.
The accounting rules applicable to SIS companies are those determined in accordance with the rules applicable to the company's legal form.
Societal impact companies in which impact shares form 100% of the share capital are entitled to the following tax benefits:
- exemption from corporate income tax;
- exemption from communal business tax;
- exemption from the wealth tax.
In respect of these companies, the law also makes provision for cash donations to these companies to be deducted from donors' total net income. This is the same tax benefit as that which is afforded to non-profit organisations (associations sans but lucratif - asbl) and foundations recognised as being of public interest.
SIS companies in which impact shares form less than 100% of the share capital are not entitled to any tax benefits.
Forms / Online services
SIS - Annexe 2 : Déclaration par la société de ses personnes clés
SIS - Modification de clauses statutaires nécessitant l'approbation préalable du Ministre