The SARL-S (société à responsabilité limitée simplifiée, or simplified limited liability company) is a variant of the classic SARL. Thanks to simplified procedures and reduced set-up costs, it offers an attractive alternative especially to young entrepreneurs. However, it is not suitable for all profiles and requires compliance with certain rules. myLIFE answers five questions you might have about the simplified SARL.
Are you are considering starting your own company, but don’t yet know the various possibilities available to you? Besides the usual structures, such as the limited company (SA) or the limited liability company (SARL), have you heard of the “one-euro company” or SARL-S? What does this mean?
The SARL-S (simplified limited liability company) is relatively new on the Luxembourg scene, as it has only been in existence since 16 January 2017. It’s aimed especially at young entrepreneurs and self-employed workers whose activity does not require large financial or capital investment.
This form of company is therefore particularly suitable for providing intellectual, coaching, consultancy, training or advisory services, etc.
However, a SARL-S can only be set up by natural persons and for businesses requiring a business permit (french) issued by the Ministry of the Economy (commercial, craft, industrial and certain liberal professions of an intellectual nature1). This type of trading company would therefore not be appropriate for certain businesses in finance or healthcare, for example.
It is quite possible to start your SARL-S with just EUR 1, hence its nickname of the “one-euro company”.
The SARL-S was introduced with the aim of simplifying the process of setting up a business. It offers several (in particular financial) advantages to those who are dipping their toes in the world of entrepreneurship.
The SARL-S is not suitable for companies that require a large initial investment.
While the SARL-S is intended to be more easily accessible than other corporate structures, it also has certain limitations that should be considered before getting started.
The SARL-S and the SARL are very similar and have many features in common. See how the SARL operates in Luxembourg.
However, the simplified version differs in several aspects, summarised in the table below.
SARL-S | SARL | |
---|---|---|
CAPITAL | Between EUR 1 and EUR 12,000 | From EUR 12,000 |
INCORPORATION | Private or notarised deed (your choice) | Notarial deed |
CORPORATE OBJECT | Restricted to activities requiring a business permit: crafts, commercial, industrial and some liberal professions 1 | Any corporate object, with the exception of insurance, savings or investment activities |
PARTNERS | Only natural persons can be partners in an SARL-S (not legal entities 3) | Natural persons or legal entities |
You can only be a partner in one SARL-S (unless the partnership interest is transferred through inheritance) 2 | / |
It is essential to choose your legal status carefully, taking into account the nature of your business activity, your financial needs and the degree of independence desired.
While certain incorporation procedures are simplified, the creation of a SARL-S must go through certain essential stages, much like other forms of commercial companies. You must therefore:
A useful tip you will need a LuxTrust product to identify yourself on Government sites and carry out the formalities.
Now you will have a clearer idea of the characteristics of the SARL-S, especially the ways it differs from a classic SARL. For more information, contact the Chamber of Commerce’s House Of Entrepreneurship or consult the Luxembourg government’s administrative portal: Guichet.lu.
Lastly, remember that starting a business is not a decision to be taken lightly and requires preparation. It is essential to choose your legal status carefully, taking into account the nature of your business activity, your financial needs and the degree of independence desired. Your choices will determine your obligations and influence the day-to-day management of your company.
You might also be interested in our article: Starting a company: limited liability company, or sole proprietorship?
1 The corporate object of the SARL-S must fall within the scope of the Law of 2 September 2011, as amended.
2 In principle, a person can only be a partner in one SARL-S. If a person becomes a partner in another SARL-S through inheritance, they become joint and several guarantor for the commitments of these other SARL-S that are undertaken after the person has become a partner.
3 A legal entity is a group of individuals united for a common purpose and possessing a legal personality (giving it rights and obligations). It can sometimes be made up of a single person. This can be, for example, a commercial company, an association, etc.
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