The Modernisation Of Luxembourg Company Law: Société Anonyme Simplifiée - Conversion Of S.à r.l. To S.A.

Luxembourg's Companies Act 'reform bill' includes new rules for conversions of company types and introduces the S.à r.l.-S.

Let's look at the characteristics of the société anonyme simplifiée (S.A.S.), the new rules for conversions of company types and the introduction of the S.à r.l. simplifiée (S.à r.l.-S.).

Characteristics of the new company type société anonyme simplifiée (S.A.S.)

Cannot list its shares (art. 101-19) Represented towards third parties by President (art. 101-21) Large flexibility in terms of organisation (art. 101-20); this allows the company to for example, mirror the articles of group companies in foreign jurisdictions New rules for conversions of company types Rather than requiring a valuation report by an independent auditor, the new procedure requires an interim financial situation, or the year-end accounts if year-end has been closed for less than six months (art. 308bis-16) This interim financial situation can be waived by unanimous decision of the shareholders, unless there has been a contribution in kind, which was not appraised by an independent auditor, during the two years preceding the conversion (art. 308bis-16) The interim financial statement (or the year-end accounts which serve as interim financial statement), unless validly waived, need to be reviewed by an independent auditor (art. 308bis-17) The management must submit a report justifying the need to convert; this report may also be waived by unanimous decision of the shareholders (art. 308bis-18). Introduction of the S.à r.l. simplifiée (S.à r.l.-S)

The law of 23 July 2016 introduced S.à r.l. simplifiée which is aimed at local startups who need to have a corporate object requiring a business licence. Only individuals can be shareholders or managers. One individual cannot hold shares in more than one S.à r.l.-S. The initial share capital may be as low as €1 and needs to be below €12,000. The company does not have to be incorporated by notarial deed but can also be set up by private deed which is published in its entirety.

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