Limited liability company (SARL)

This page was last modified on 14-07-2017

A limited liability company (société à responsabilité limitée - SARL) is a specific type of commercial company: it has both the characteristics of a capital company (liability of the partners limited to the amount of their contributions) and those of a partnership (non-transferable company shares).

In Luxembourg, the SARL is the most widely used form of company (around 2/3 of the companies in Luxembourg are SARLs).

An SARL can have between 2 and 100 partners. There is also a 'single member' SARL, (SARL "unipersonnelle") which is an exception to the traditional concept of company law, allowing a single partner to set up an SARL.

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Who is concerned

The SARL is a form of company of particular interest for natural or legal persons wishing to:

  • benefit form the limited liability status (to the amount of their contributions) without having to make a significant initial contribution (minimum share capital: EUR 12,000);
  • retain control over the circle of partners (the company shares are not freely transferable);
  • create a relatively simple business structure requiring reduced administrative formalities (compared with a public limited company (Société anonyme - SA).


An SARL may be incorporated any purpose, provided that it is legal. However, insurance, savings or investment companies cannot take the form of an SARL.

How to proceed

Creation of the company

Constitutional documents

  • by notarised deed;
  • registration with the Trade and Companies Register (registre de commerce et des sociétés - RCS) for publication in the electronic compendium of companies and associations (Recueil électronique des sociétés et associations - RESA).


  • unlimited, unless otherwise specified in the articles of association;
  • not dissolved on the death, suspension, bankruptcy or insolvency of one of the partners, unless otherwise stipulated in the articles of association.



  • minimum EUR 12,000;
  • must be fully subscribed and fully paid up on formation;
  • contributions can be made in cash or in kind; unlike public limited companies (sociétés anonymes), contributions in kind do not require an independent valuation by a statutory auditor (réviseur d’entreprises);
  • contributions in industry are allowed, they do not contribute to the share capital but give rise to the allocation of shares which open the right to a share of the profits and net assets, in return for a contribution to losses (these shares are non-transferable and non-negotiable).

Form of company shares

  • registered shares;
  • the issue of profit shares is allowed provided the related rights are determined in the articles of association;
  • public offering of company shares or bonds is not allowed;
  • private offering of bonds is allowed (subject to the approval of the partners if the bonds are convertible into shares).

Transfer of company shares

  • shares are not freely tradable;
  • they can only be transferred between living persons to non-partners if partners representing at least ¾ of the share capital have given their consent during the shareholder meeting (the articles of association may contain provisions which lower the majority to half of the share capital);
  • the transfer of shares must be recorded in a notarised deed or in a private deed.



The conditions regarding the capacity to be a partner in an SARL are the same as for any other contract.


  • from 2 to 100 natural or legal persons;
  • exception: a single partner for a single-person limited liability company.


  • partners are liable up to the amount of their contributions to the share capital;
  • the founders of a business and, in the event of a capital increase, the managers, are jointly and severally liable towards third parties:
    • for the part of the capital not validly subscribed and the difference between the minimum capital and the amount of the subscriptions;
    • for fully paying up the shares and the portion of the capital for which they have subscribed;
    • for the redress of damage arising from either the nullity of the company or deceitful or missing statements in the company deed.

The memorandum of association can limit the notion of business founder to the subscribers who own at least one third of the share capital in common. In this case, all other partners in the memorandum of association will be considered to be simple subscribers.

Meeting of partners

  • ordinary and extraordinary general meetings are called by the business managers at least once a year for companies with more than 60 partners;
  • no predefined legal formalities concerning the form or deadline for calls to meetings;
  • the rules for calling meetings can be defined in the articles of association.

Functioning of an SARL


The management of the company is ensured by one or more business managers, partner or not, appointed by the partners in either the articles of association or by any later act, for a limited or unlimited term. These managers can carry out any operation which is necessary or useful for the corporate purpose with the exception of those reserved for the partners as provided for by law or by the articles of association.

The day-to-day management as well as the representation of the business can be delegated to one or more business managers, directors and other agents, partner or not, acting alone or jointly.

Business managers

  • in Luxembourg, a legal person is allowed to take on the management of a limited liability company (SARL);
  • the manager is considered to be an agent of the company under the law, but he is in fact an organ of the company;
  • there is no restriction on the nationality of business managers, who may be Luxembourg nationals or nationals of other EU or non-EU countries;
  • the company is bound by the acts of the business managers, even if these acts exceed the company object;
  • as for partners, there is no requirement for business managers to have a commercial capacity;
  • the following cannot become managers of a SARL: civil servants, members of the courts, lawyers (except for their own law firm), notaries, members of parliament and of the government and the military;
  • unless stated otherwise in the articles of association, the business managers cannot be dismissed without a legitimate reason: manifest incompetence, unfair competition with the company or embezzlement of funds

Accounting aspects

Accounting and financial information

  • obligation to produce: balance sheet, profit and loss accounts, annexes and, in principle, a management report, which must be approved by the partners’ meeting and lodged with the RCS (Trade and Companies Register) within 7 months of the closing of the financial year (6 months to hold the meeting plus 1 month as from the meeting);
  • SARLs can draw up an abridged balance sheet if, on the balance sheet date, they do not exceed 2 out of the following 3 criteria:
    • balance sheet total: EUR 4.4 million;
    • net turnover: EUR 8.8 million;
    • average number of (full-time) staff: 50;
  • SARLs can combine certain items in the profit and loss accounts if, on the balance sheet date, they do not exceed 2 out of the following 3 criteria:
    • balance sheet total: EUR 20 million;
    • net turnover: EUR 40 million;
    • average number of (full-time) staff: 250;
  • the accounts must be drawn up according to the 'Lux Gaap' rules.

Supervision/control of the company

  • only companies with more than 60 partners are subject to mandatory supervision by one or more auditors (commissaires aux comptes), partners or otherwise, appointed in the articles of association;
  • the legal audit of accounts by an approved statutory auditor (réviseur d’entreprises agréé) is mandatory in each company which, on the balance sheet date after two consecutive financial years, exceed 2 out of the following 3 criteria:
    • balance sheet total: EUR 4.4 million;
    • net turnover: EUR 8.8 million;
    • average number of (full-time) staff: 50.

Tax aspects

Specifics of the 'single member' SARL

  • subject to all the rules governing all SARLs;
  • open to any natural or legal person;
  • managed by one or more natural or legal persons – non-partners can be appointed as manager;
  • decisions are taken by the single partner;
  • the causes of dissolution of SARLs extend to single-person SARLs.

Who to contact

Chamber of Skilled Trades and Crafts
2, Circuit de la foire internationale
L-1347 - Luxembourg-Kirchberg
Postal box B.P. 1604 / L-1016


14, rue Erasme
L-1468 - Luxembourg
Phone: (+352) 42 39 39 - 330

Opening hours
from 8.30 to 17.30