Luxembourg’s modernisation of the Companies Act of 1915 was formally adopted on 13 July 2016, and includes changes to company liquidation, incorporation and capital increase procedures.

Three-step liquidation

  • If the liquidator is a company, the individual who will represent the company must be named in the appointment deed. As opposed to the permanent representative of a corporate director in an S.A. (art. 51bis), there is no extension of the liquidator’s liability to the representative (art. 142 (2)).
  • Express rules on conflict of interest for liquidator (art. 148quater).

One-step dissolution

  • As previously, in case of sole shareholder, all assets and liabilities can be transferred to sole shareholder and company dissolved (art. 1865bis Code Civil).
  • The company needs to provide written confirmation by the tax authorities (CIT and VAT) and social security that there are no amounts outstanding (art. 141 (2)).
  • Creditors have 30 days after publication of liquidation to request guarantees (art. 1865 bis Code Civil).

Changes to incorporation and capital increase procedure

  • Preference shares without vote may now represent more than 50% of the share capital (art. 45) – these will not be taken into account when determining a quorum or presence requirements (art. 46).o Conversion of convertible bonds (art. 32-4) and certain, liquid and due receivables (art. 32-1 (5)) are considered as contribution in cash -> no auditor report necessary.
  • Subscription below par possible for placement agent who need to pay at least 90% of par value (art. 26-5 (2)+(3)).
  • Authorised capital possible for S.à r.l. (art. 199).
  • Issue of “free” shares is possible (eg. for employee participation):

- By capital increase, in which case the fact that the shares will be issued below par value needs to be expressly mentioned in the agenda, the Board needs to prepare a report outlining the financial consequences of the operation for the shareholders and an independent auditor has to confirm that the figures in the Board report are accurate; both reports need to be included in the convening notice and are filed with the RCS.

- By authorised capital, if the issue below par is expressly included in the authorisation; the reports of the Board and the auditor need to be submitted at the EGM which introduces the authorised capital, and the minimum subscription price needs to be mentioned.

  • Rules of capital increase applicable to the issue of convertible bonds or other convertible instruments (art. 32-4); in addition, the issue of convertible instruments by an S.à r.l. to non-shareholders is subject to the approval of the existing shareholders (art. 11quater).
  • In addition to contribution in cash and in kind, shareholders of a S.à r.l. may contribute industry and receive shares without par value (art. 183 (3)).
  • Minimum share capital S.A. reduced to €30,000, S.à r.l. to €12,000.
  • Maximum number of shareholders for S.à r.l. increased from 40 to 100.

*All references to articles mentioned above are references to the law of 10 August 1915 unless expressly mentioned.


The amendments to the law related to the simplified dissolution confirm a practice which is already applied by most Luxembourg notaries. The introduction of the authorised capital in combination with the increase of the maximum number of shareholders will allow the setup of vehicles with a potentially large number of shareholders which benefit from the flexible regime of the S.à r.l.

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This is part of a series of articles by TMF Luxembourg experts on changes in the Grand Duchy’s company law. Read part one: The confirmation of practice.