What is a SARL-S? The €1 company in Luxembourg

The SARL-S in one sentence

The simplified private limited company (société à responsabilité limitée simplifiée, SARL-S) is a commercial company form that departs from some rules of the classic SARL.

According to Guichet.lu, it aims to free entrepreneurs from some of the constraints of creating a SARL: the minimum capital is reduced to one euro and the company can be set up without a notary. It is meant as an instant gateway to economic activity for new entrepreneurs.

As in a SARL, the partners’ liability is limited to the amount of their contribution to the share capital.

Capital: from €1 to €12,000

• The share capital of a SARL-S must be between €1 and €12,000.
• It must be fully subscribed and fully paid up at incorporation.
• Contributions can be made in cash or in kind.

Who can set up a SARL-S?

• Natural persons only: a company can never be a partner in a SARL-S.
• From 1 to 100 partners. If the number of partners exceeds 100, the company has one year to change its legal form.
• A person can be a partner in only one SARL-S at a time, unless the shares were inherited. They can, however, also be a partner in a SARL or an SA at the same time.

Which activities qualify?

The corporate purpose of a SARL-S is limited to craftsmen, traders, industrial activities and certain liberal professions. The founder must first apply for a business permit (autorisation d’établissement) from the Ministry of the Economy; the permit is then included in the application to register with the Trade and Companies Register (RCS).

Steps to set it up

1. 1
   Apply for the business permit from the Ministry of the Economy.
2. 2
   Check that the company name is available with the RCS: it must differ from any existing company and be followed by “SARL-S” on all company documents.
3. 3
   Draw up the articles of incorporation, which can be a private deed (a notary is optional), and pay up the capital in full.
4. 4
   Register the company with the RCS: name, registered office, corporate purpose, capital, partners’ identity and the business permit number.

Guichet.lu lists, among the costs, RCS publication fees, a minimum capital of €1 and any fees for administrative authorisations.

SARL or SARL-S: the key differences

Both forms limit the partners’ liability to their contributions and are run by one or more managers. The SARL-S is mainly suited to starting quickly with little capital; a SARL is needed when companies must hold shares or when the capital exceeds €12,000.

Management and accounting obligations

Management is entrusted to one or more natural persons, partners or not. A SARL-S prepares a balance sheet, a profit and loss account and notes, and files its annual accounts with the RCS within 7 months of the financial year-end.