S.À R.L. Or SAS?

The private limited liability company (société à responsabilité limitée or S.à r.l.) is, by number, the most widely used form of companies in Luxembourg. With the introduction of the simplified public limited liability company (société par actions simplifiée or SAS) within the Luxembourg legal framework, the question as to whether the SAS may become a credible alternative to the S.à r.l. arises.

Inspired by the French market, the SAS is characterised by a very high degree of flexibility and a very limited level of statutory prescription, notably as regards its mode of governance which can be tailored to the shareholders' needs. Another advantage of the SAS is the ability to include specific clauses in its articles of association aimed at regulating shareholder relations, thereby stabilising the control of the company. The SAS is also less regulated than the S.à r.l. in terms of share transfer restrictions, shareholders exclusion and standstill provisions. Contrary to similar provisions in a shareholders' agreement, such clauses are binding upon third parties if provided for in the articles of association.

The purpose of this client briefing is to highlight the main characteristics and differences between the S.à r.l. and SAS.

S.à r.l. SAS Legal form private limited liability company simplified public limited liability company Legal personality yes yes Fiscal Transparency no but eligible for US tax purposes no Number of members 1 to 100 1 to unlimited Confidentiality of shareholding - public record - share register can be inspected by any shareholder - no disclosure requirements of the shareholders - share register can be inspected by any shareholder Establishment articles of association - notarial deed required articles of association - notarial deed required Publication requirements - full publication of the articles of association and amendments - annual accounts - details on managers - details on shareholders - full publication of the articles of association and amendments - annual accounts - details on chairman and of directors (if any) Duration limited or unlimited limited or unlimited Minimum share capital EUR 12,000 EUR 30,000 Nominal or par value of the shares - new shares are issued at the nominal value or, in the absence thereof, at par value - shares with different nominal value can be issued - new shares are issued at the nominal value or, in the absence thereof, at par value - shares with different nominal value can be issued - shares without nominal value for a subscription price below their accounting par value can be issued in certain circumstances Subscribed share capital fully paid up partially paid up: at least 25% of the shares Contributions in cash, in kind or by way of sweat equity (apports en industrie) - in cash or in kind - contributions in kind are subject to a valuation report from an independent auditor (no valuation report is however required in the case of a contribution of a receivable held by the holder of the debt instrument against the company) Liability of shareholders limited to the amount paid-up / committed limited to the...