Managing a limited liability company (SARL)

This page was last modified on 03-11-2014

A limited liability company (société à responsabilité limitée - SARL) is administered by one or more business managers (partners or otherwise), which may form a management board.

Who is concerned

The law does not stipulate conditions for qualification (except for certain professions, e.g. a limited liability company of chartered accountants or lawyers), nationality or other, to become a manager or member of the management board of an SARL. Legal persons can also become members of the board.

How to proceed

Mandate of a business manager

Managers are appointed either in the constitutional documents, or by a subsequent general meeting of partners for a period freely determined at the time of their appointment.

The mandate of a manager may be remunerated or not.

Unless otherwise stipulated in the articles of association allowing, for example, dismissal ad nutum (without justification of grounds, without notice and without indemnity), the manager of an SARL cannot be dismissed without a legitimate reason.

Moreover, the manager may resign where his departure does not prejudice the business of the company.

Due to the intuitu personae nature of the mandate (the mandate is granted to a specific person), a manager cannot delegate all of his powers. He can however delegate his powers on an ad hoc basis regarding certain decisions which are then strictly defined by a power of attorney.

Competencies of a manager

Management

The manager manages the company and works to achieve the company objective.

The company is bound by the acts of each manager, even if they exceed their powers defined by the company objective or any other provision in the articles of association (provided that the third parties act in good faith).

An SARL can be administered by the management board which then assumes all the powers granted to the business managers. Since it is a collegiate body, the decisions of the management board must be taken following deliberations.

The decisions taken by the manager(s) or the management board are put down in minutes.

Representation

Unless otherwise stipulated in the articles of association, each manager can individually represent the company with regard to third parties and the courts of justice.

The company can be represented by one or more managers depending on the signing authority conferred by the articles of association: signature of the manager only, joint signature of two (or more) managers, etc.

The company can also be represented by a proxy who has been given power of attorney for a specific act or operation.

Inventories and balance sheets

Each year the management draws up an inventory of the movable and immovable assets and liabilities of the company, together with an appendix summarising the commitments of the company as well as the outstanding debts of the managers, internal auditors and partners towards the company.

The management draws up the balance sheet and profit and loss accounts which are submitted for approval to the partners.

These documents, together with the auditor’s report, are made available to the partners at the registered office of the company. In the case of an SARL with more than 25 partners, the partners may only consult these documents during the 15 days prior to the general meeting.