Public Limited Company in Luxembourg
Public limited company (société anonyme – SA) is one of the most common types of company in Luxembourg.
The Public limited company gives many advantages for investors. Shareholders have better access to capital – raising share capital from existing and new investors. Shareholders are able to buy and sell their shares and the value of the firm is shown by the market capitalization which is based on the share price. SA also gives the opportunity to more easily make acquisitions by offering shares to the shareholders of the targeted firm and gives a company more prestigious profile.
The SA is often the legal form of company chosen by large businesses, but it can also be used, as the shares in this type of company can be bearer shares and are therefore more easily transferable.
Public Limited Company incorporation procedure
Here is Public Limited Company incorporation procedure divided into 7 stages:
Stage 1: Identify shareholders and directors
For registering a Public Limited Company, a minimum of 1 shareholder and 3 directors are required. Shareholders can be individuals or companies, but only individuals can become directors of the SA.
Shareholders are the persons holding shares in a company and directors of company are responsible for the management of the company affairs and legal compliance under various laws.
Stage 2: Identify the location and share capital of the company
It is important to have a proper address for the registered office of the company. A public limited company should have share capital at least 30,000 Euro.
Stage 3: Company Name Application
Before proceeding with the incorporation process, company name application has to be filed for getting approval from the RCS.
Stage 4: Execution of company registration documents
After the company name is approved, the company incorporation documents have to be executed by the promoters in the prescribed format.
Stage 5: Submission of company registration documents to the RCS
Prepared company registration documents have to be submitted to the RCS for registration of the company. Usually in couple of days company is registered.
Stage 6: Company registration and certificate of incorporation
The RCS will register the company after due verification of submitted documents and will issue the Certificate of Incorporation.
Stage 7: Filing Commencement of Business Declaration
A public limited company cannot start its business immediately unless declaration is filed by directors stating that all subscribers paid subscription money in such manner.
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Public Limited Company registration requirements
Registration and administration of a company in Luxembourg takes place under the Law on Commercial Companies of 1915 (the adopted consolidated edition is in force).
Share capital
The minimum amount of share capital to form a Public Limited Company is EUR 30,000. The SA’s share capital can be amassed through subscriptions. The capital has to be fully subscribed and at the minimum of 25% paid up. The capital can be contributed in cash or in kind. Contributions in kind have to be covered by an assessment statement drawn up by a statutory auditor (réviseur d’entreprises)
If the capital rises, it grants the shareholders preferential subscription rights (except where a justified subscription limit has been agreed on extraordinary general meeting).
Form of shares
Shares can be given and show with a nominal value or with no nominal value.
Before shares are fully paid up, they are determined as registered shares. Fully paid-up shares become one of the following:
- registered shares;
- bearer shares;
- dematerialized shares.
Registered or bearer shares can be converted into dematerialised shares by registering them in a securities account managed by an account holder, if such a conversion is approved by the articles of association.
It is possible to establish shares which are not representative of the share capital and which are called profit shares. The SA’s articles of association regulate the rights attached to these shares.
Public Limited Company may issue shares without voting rights:
- when the company is registered, if stipulated in the articles of association;
- when a capital increase;
- through the conversion of ordinary shares.
A logbook of the registered shares that authorizes their ownership is kept at the head office. The owner may request a certificate. Bearer shares have to be deposited with an allowed custodian. A dematerialised share is materialised when it is recorded in a securities account with an allowed body.
Transfer of shares
The transfer of registered shares only affects the Public Limited Company if one of the two following procedures is completed:
- a declaration of transfer in the share register must be dated and signed by the assignor and the assignee;
- a notice of the transfer to the SA company or approval of the transfer by the company recorded in an authentic deed.
The transfer of bearer shares is brought out between parties by transaction of consents and with third parties by transfer of the share certificate. The custodian holds all documents certifying the transfer.
The transfer of dematerialised shares is made by bank transfer.
The SA company can’t subscribe for its own shares except in exceptional, limited circumstances that are governed by the law.
Documents
When registering SA, prepare a lot of documents for submitting, which is listed below:
- a description of each contribution in kind;
- the cause and content of special benefits granted upon the company’s formation;
- the number of securities or shares that do not form part of the share capital, and the rights attached thereto, where applicable;
- the duration of the company;
- the company name;
- the number of subscribed share capital and, where applicable, the amount of allowed share capital;
- the form of the company;
- the name of the signatories to the deed of incorporation;
- laws that regulate the number of and method of appointing the representatives of the bodies representing the company regarding third parties, administering, managing, overseeing or auditing the business and the rules that determine the distribution of authority among these bodies if deviates by the law;
- the purpose of the company;
- the address of the company’s registered office;
- the sum paid to subscribed share capital;
- the share classes and their characteristics;
- whether the shares are filed, bearer or dematerialized shares, and any additional or derogation clause which can override the laws;
Company name
The name of the Public Limited Company is established in its deed of incorporation. The company name of the SA has to be different from that of any other existing company. To find out whether the SA company name is applicable, contact the Registre de Commerce et des Sociétés (RCS).
Cost
Setting up Public Limited Company in Luxembourg entails certain costs, including:
- notary fees;
- the cost of publishing in the Trade and Companies Register (RCS);
- statutory auditor fee, if a statutory auditor is needed;
- share capital of at least 30,000 Eur;
- any costs related to issuing administrative permits.
Value Added Tax
VAT declaration according to the following criteria:
- if the annual turnover excluding taxes is less than 112 000 Eur: VAT returns must be filed annually;
- if the annual turnover excluding taxes is between 112 000 Eur and 620 000 Eur: VAT returns must be filed quarterly;
- if the annual turnover excluding taxes exceeds 620 000 Eur: VAT returns must be filed monthly.
Timeline
The period of register SA in Luxembourg engagement approximately 4 weeks. It comprises Engagement planning company registration, corporate bank account approval, corporate internet banking approval, engagement completion.
Consultation about Public Limited Company registration
Our consultation services for registering a Public Limited Company in Luxembourg are specifically tailored to assist you in every aspect of setting up your business. Our experienced advisors will help you from preparing the initial paperwork to securing the required permits and registrations, ensuring a seamless and effective process. We offer individualized advice on the legal necessities, share capital, and corporate organization to assist you in making well-informed choices that are in line with your business objectives.
Ownership management
Managing the ownership of a Public Limited Company can be complicated yet essential. Our services involve handling “changes in ownership, managing beneficial owners, and overseeing ownership transfers.” We make sure that all modifications in ownership are accurately recorded and adhere to current regulations.
Corporate structure changes
As your business progresses, your corporate structure may also change. We offer comprehensive services to help with any adjustments needed, such as changing directors, updating nominee information, or making other structural modifications, ensuring a smooth and efficient process.
Share capital management
Proper management of share capital is crucial for the financial well-being of your company. We provide assistance in enhancing, cutting down, disposing, and transferring share capital, guaranteeing that all dealings are executed precisely and in compliance with legal obligations.
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