Introduction of deferred payment of the minimum share capital for limited liability companies in the Grand Duchy of Luxembourg

From now on, the minimum share capital of 12,000 euros may be paid up gradually over a period of up to 12 months from the date of incorporation of a limited liability company.

Deferred payment of the minimum share capital is optional.

Who is this for?

This applies only to limited liability companies (SARL) and simplified limited liability companies (SARL-S).

Why?

To facilitate the incorporation and the management of a SARL by offering entrepreneurs greater financial flexibility.

How?

• Deferred payment: Shareholders will be able to pay up the minimum share capital in several instalments, in accordance with a timetable set out in the articles of association.
• Legal framework: Safeguards will be put in place to protect creditors and ensure the financial stability of the SARL.

Advantages

• Reduction in the initial financial burden when setting up a SARL.
• Incentive to entrepreneurship, particularly for young businesses and start-ups.
• Greater flexibility in managing capital contributions.

In return, accountability mechanisms will be strengthened:

In particular, the founders may be held liable for:

• the irregular subscription of share capital;
• failure to pay up the share capital in full by the end of the maximum period of 12 months.

Furthermore, defaulting shareholders will temporarily lose their voting rights until the funds due have been paid up.

Garantees

In relation to third parties:

• obligation to disclose information regarding shares that have not been fully paid up;
• obligation to state, in corporate documents, the portion of the share capital that has not yet been paid up when the share capital is specified.

In practice?

This flexibility will apply only to cash contributions.

Consequently:

• contributions in kind must always be fully paid up at the time of incorporation;
• any amount exceeding the minimum share capital of 12,000 euros must be paid up on the date of incorporation;
• subsequent capital increases will remain subject to immediate and full payment. The same applies to any share premium attached to such contributions;
• where a share premium is provided for, it must be paid in full at the time of incorporation.

The obligations relating to the prevention of money laundering and terrorist financing remain unchanged.

If you would like further information or assistance with setting up a limited liability company, please do not hesitate to contact us!