The Bill of Law 6777 (the "Bill of Law"), the purpose of which is to introduce a simplified limited liability company (société à responsabilité limitée simplifiée ("S.à r.l.-S") and amending (i) the amended Law of 10 August 1915 on commercial companies (the "Law of 1915") and (ii) the amended Law of 19 December 2002 on the Trade and Companies Register as well as company accounts and annual statements (the "Bill of Law"), was introduced in the Chambre des députés on 2 February 2015.
This Bill of Law is intended for the creation of a new vehicle in order to encourage "entrepreneurship by facilitating access to business start-ups", particularly by reducing the setup costs but also by favouring a quick and easy incorporation process.
Specific setup conditions for a S.à r.l.-S:
- A company open only to individuals :
Only one or several individuals may become member(s) of a S.à r.l.-S. Therefore, no legal entities may hold corporate units in a S.à r.l.-S, or the S.à r.l.-S. would be void.
An individual may become a member of only one S.à r.l.-S at any one time. Failure by an individual to comply with this provision will entail an extension of his personal responsibility. This person will stand as collateral security (caution solidaire) for the obligations entered into by this second S.à r.l.-S, that he will be a shareholder despite this prohibition. The Bill of Law limits the collateral security liability for the contracted obligations after the individual has become a member of a second S.à r.l.-S. The individual member will cease to stand as collateral security as from (i) the transformation of the second S.à r.l.-S into a "classic" S.à r.l. or (ii) the publication of the dissolution of the second S.à r.l.-S.
One exception to the above provision, however, is expressly provided in the Bill of Law: it concerns the transfer of corporate units of a S.à r.l.-S in the event of death. Thus, in this particular case, an individual may hold corporate units in several S.à r.l.-S without having a special personal liability as described above.
Finally, it should be noted that this prohibition only applies to an S.à r.l.-S and not to a "classic" S.à r.l. Therefore an individual may be a member of one or several "classic" S.à.r.l and a member a S.à r.l.-S.
This desire to encourage the presence of individuals within this new company also applies to managers since, contrary to "classic" S.à.r.l, they have to be individuals.
- A corporate object restricted by law:
The corporate object of the S.à r.l.-S will necessarily fall within the scope of Article 1 of the Law of 2 September 2011 regulating access to the professions of craftsmen, traders, industrial and certain other free professions. Use of the S.à r.l.-S will therefore be reserved solely to those requiring commercial authorisation.
Upon registration of the S.à r.l.-S with the Trade and Companies Register, the S.à r.l.-S shall submit a copy of its business authorisation.
- A company established with a share capital of one euro:
The minimum amount of share capital has been reduced to 1 euro and may not exceed EUR 12,394.68 (corresponding to the minimum share capital of a "classic" S.à r.l.). As for a "classic" S.à r.l., this minimum share capital must be fully subscribed and paid-up at the time of incorporation of the company and a deposit of at least 5% of the net annual profits must be allocated to the establishment of a reserve which will be unavailable until it has achieved the amount of the difference between the subscribed and paid-up capital and the amount of EUR 12,394.68.
Contributions in cash and in kind are authorised, contrary to contributions in the form of services which are excluded.
- A simplified incorporation:
The S.à r.l.-S may be set up through a special deed, notarised or under private seal. Whatever the form chosen by the member(s), the articles of incorporation must be published in full.
- An unlimited duration:
The Bill of Law does not impose a maximum duration for a S.à r.l.-S. so as not to pressurise the entrepreneur and limit the use of this vehicle. The only obligation shall be that the maximum amount of share capital must never be exceeded during the existence of the S.à r.l.-S.
- A clear indication of the corporate form:
The corporate form must appear after the name of the company and on all the documents referred to in Article 187 of the Law of 1915.
Finally, for the purpose of maintaining the attractiveness of the S.à r.l.-S, certain regulated costs have been revised downwards. This is particularly the case for disbursements and notarial fees for which no minimum is required or for registration with the Trade and Companies Register, the amount of which has been set at EUR 15 (instead of EUR 121,80 for a "classic" S.à r.l.).
Similar operating rules to a "classic" S.à r.l.:
The S.à r.l.-S is not a new corporate form but a variation of a pre-existing corporate form, the S.à r.l. Thus, the Bill of Law proposes to divide the current Section XII of the Law of 1915 into two sub-sections: a first relating to "general provisions" and a second to "provisions applying particularly to simplified limited liability companies (société à responsabilité limitée simplifiée)". Unless otherwise provided in the second sub-section, the provisions relating to a "classic" S.à r.l. will apply to a S.à r.l.-S.
The law resulting from the Bill of Law is expected to be enacted within the upcoming months.