SUMMARY

Luxembourg law applying to the limited company (SàRL) does not appear to be particularly focused on the protection of the company's creditors even though one may not say that this protection appears to be significantly neglected. Most policy choices made in Luxembourg gravitate around the promotion of the SàRL as a flexible investment vehicle where the protection of the majority shareholder(s)/investor(s) would be adequately met.

As a consequence the law applying to the Luxembourg SàRL continues to be rooted in a rather conservative minimum capital requirement the amount of which does not appear to be a disturbing factor for investors and a recent company law reform focused on opening up financing techniques and tools rather than on a significant increase of creditor protection.

KEYWORDS

Private limited liability company; Luxembourg; Creditor Protection

INTRODUCTION AND CONTEXT

LUXEMBOURG COMPANY LAW

The provisions of Luxembourg's company law are to be found (marginally) in the Civil Code (Articles 1832–1873), applicable only when they are not derogated from by the Law of 10 August 1915, relating to commercial companies (LCC) as subsequently modified.

In December 2017, the numbering of all the articles of the LCC was modernized/changed. In the following contribution we shall refer to the new numbering followed by the old numbering (“ex”) as, of course, all previous descriptions of Luxembourg company law refer to the LCC's old numbering.

INITIALLY (1915) LUXEMBOURG's LCC WAS ALMOST ENTIRELY COPIED FROM BELGIAN LAW

Belgian law remains a source of reference for company law practitioners in Luxembourg. Considering the fact that Luxembourg is an international financial centre attracting investors mainly based in other jurisdictions, other legal systems do exercise some influence on Luxembourg company law as well, such as the French, Swiss, Anglo-American and German ones. However, more specifically relating to the private company (or limited liability company, SàRL), Belgian law's influence was always quite limited as this company form was introduced in Luxembourg in 1933 (French law was then used as a reference), namely before it became part of the Belgian company law system in 1935.