Limited liability company (SARL)

This page was last modified on 18-10-2016

A limited liability company (société à responsabilité limitée - SARL) is a specific type of commercial company: it has the characteristics of a capital company (liability of the partners limited to the amount of their contributions) as well as the characteristics 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 benefit from the advantages of an SARL.

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Who is concerned

An SARL is a form of company that is particularly interesting for natural or legal persons that wish to:

  • be liable only 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 can be formed for any company object whatsoever, provided that it is legal. However, insurance, savings or investment companies cannot take the form of an SARL.

The partners of an SARL are not required to have the capacity as a trader. It is sufficient for the partners to be capable of administering assets.

How to proceed

Creation of the company

Constitutional documents

  • by notarised deed;
  • lodging with the Trade and Companies Register (registre de commerce et des sociétés - RCS) for the purpose of 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 ruin 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 (services or know-how) are not allowed.

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 transferable;
  • they can only be transferred between living persons to non-partners with the consent of the partners’ general meeting representing at least ¾ of the share capital;
  • the transfer of shares must be recorded in a notarised deed or in a private deed.



No conditions on the ability to be a partner.


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


  • the 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 are deemed 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

Day-to-day management

Daily business management is usually delegated to one or more business managers, partners or otherwise, appointed by the articles of association or by the general meeting, for a limited or unlimited period of time.

Business managers

  • in Luxembourg a legal person can assume the management of an SARL, unlike in neighbouring countries such as Belgium or France;
  • 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;
  • managers can only be removed from office for legitimate reasons: manifest incapacity, unfair competition in relation to the company or embezzlement of funds

Accounting aspects

Accounting and financial information

  • obligation to produce: balance sheet, profit and loss accounts, notes to the financial statements and 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 abbreviated balance sheet if, on the balance sheet date, they do not exceed 2 out of 3 of the following criteria:
    • balance sheet total: EUR 4.4 million;
    • net turnover: EUR 8.8 million;
    • average number of staff: 50;
  • SARLs can combine certain headings in the profit and loss accounts if, on the balance sheet date, they do not exceed 2 out of 3 of the following criteria:
    • balance sheet total: EUR 20 million;
    • net turnover: EUR 40 million;
    • average number of staff: 250;
  • the accounts must be drawn up according to the 'Lux Gaap' rules.

Controlled supervision 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;
  • supervision by a statutory auditor (réviseur d’entreprises) is mandatory in all companies which, on the balance sheet date after two consecutive financial years, exceed 2 out of 3 of the following criteria:
    • balance sheet total: EUR 4.4 million;
    • net turnover: EUR 8.8 million;
    • average number of 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 unilaterally by the single partner;
  • the causes of dissolution for 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 18.00