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How To Close A Company In Luxembourg

Striking off or closing a company in Luxemburg for whatever reason can be daunting if you are unaware of the potential steps or pitfalls involved. Without specialist knowledge you may fall at the first hurdle and it is better to close or wind up the company in Luxemburg cleanly without leaving a stack of administrative liabilities behind you. Our staff at Close a European Company can provide a full package of bespoke services according to your individual/corporate requirement as follows:

We offer the following services in Luxemburg:

  • Accountancy Advice
  • Taxation Services
  • Legal Advice
  • Liquidation and insolvency services
  • Personal liability advice
  • Advisory/restructuring services

OPTIONS FOR DISSOLVING/WINDING UP A LUXEMBOURG COMPANY?

VOLUNTARY LIQUIDATION


The general meeting of shareholders or partners of a company may decide, in the manner which is stated in the Articles of Association (notice, quorum, majority qualified deed) to liquidate the company.

The meeting calls for one or more liquidators, who shall act in accordance with Articles 141-151 of the Act of August 10, 1915 on commercial companies, respectively in the manner determined by the liquidation meeting.

If the meeting cannot agree on the modalities of liquidation in terms of majority under Article 142 of the Law, these modalities will be determined by the district court concerning commercial matters relevant to the company's headquarters.

Deregistration

During the liquidation procedure, the receiver carries out certain tasks, such as collecting any money due on invoices, selling the company assets, paying creditors, informing co-contractors, terminating contracts in progress, etc.

Cessation involves several formalities, including:

  • requesting cancellation of the incorporation permit from the Ministry of Small Enterprises and Traders and Tourism;
  • notifying the cessation to the Luxembourg Registry (VAT) and to the authority that issued the operating permit ('commodo-incommodo');
  • informing the direct taxation authority when filing the annual tax return;
  • removing the company from the Trade and Companies Register;
  • for craftsmen: sending back the craftsmen's card to the Chamber of Trades, which then informs social security about this for the purposes of cancellation;
  • for traders: notifying the Chamber of Commerce of the cessation ;
  • where necessary, notifying the cessation to the relevant professional association.

Once the above has been completed, the liquidation must be concluded which must then be published in the Trade and Companies Register.

Any company subject to legislation on classified facilities, must notify the relevant authorities of the cessation, for the purposes of environmental protection. These authorities differ according to the type of facility.

  • Nomenclature and classification of classified facilities
  • Requesting an operating permit for a classified facility (commodo/incommodo)
  • Carrying out a risk assessment for some classified facilities

Advantages of Voluntary Dissolution:

- This is the only straight way of ensuring that your company is closed in the correct manner.

Disadvantages:

- If the company is not dissolved in the proper manner then this could take time and money, please contact us for assistance and fees for winding your company up in Luxemburg.

LIQUIDATION "FOR GOOD CAUSE"


The dissolution of a corporation (including limited companies, European companies, co-operatives, limited liability companies and partnerships limited by shares) may be made to the court for good cause by one or more shareholders or partners . Applications of liquidation pass before the district court relevant to the location of the company's headquarters.

The "good cause" that can lead to the dissolution and liquidation of the company is not defined by law, but left to the discretion of the judge. This assessment is taken into account more in the interests of the company than in the interests of shareholders or members.

Thus, a serious dispute between partners or shareholders may constitute this cause for dissolution, provided that this dispute has the effect of blocking the normal functioning of society, it threatens the future of society and puts its survival at risk .

In the case of liquidation "for good cause", the court appoints a liquidator to determine the modalities of liquidation. Frequently, the applicant will be ordered into liquidation to pay an advance on fees and expenses of liquidation.

Liquidation on the basis of Article 203 of the Act of August 10, 1915 on commercial companies.

The prosecutor may ask the district court regarding commercial matters to dissolve and to order the liquidation of any company under Luxembourg law that

Pursues activities contrary to the penal law, or Seriously contravenes

  • the provisions of the Commercial Code,
  • the laws governing commercial companies,
  • the right of establishment.

The court shall assess, by taking the date of the request of the prosecution, whether the infringements are serious enough to justify a dissolution and liquidation of the company, without taking into account the solvency or insolvency of the company in question.

Breaches of company law that most often lead to the liquidation are the failure to publish balance sheets and accounts, if there are no real and valid headquarters (eg in case of termination of the domiciliary) or the lack of social bodies (eg directors, managers or auditors who have resigned and are not replaced).

If the offenses are deemed serious enough, the court will appoint one or more liquidators and determine the method of liquidation. In principle, the rules governing the liquidation of the bankruptcy are made applicable, but the court may modify the method of liquidation by a subsequent decision.

The liquidator is responsible for identifying all assets and liabilities of the company to reduce liabilities by performing assets and restore, where appropriate, the surplus to the shareholder or shareholders. Under certain assumptions, bankruptcy may be declared.

The liquidation decision is published by the press. It can be declared provisionally enforceable, that is to say that the liquidation process must take its course, even if the company files an appeal (Appeal or opposition) against the liquidation decision.

For both opinions it is important to take care to protect the assets of the business, to conform with the liquidators wishes and to act responsibly. Please contact us for further information and advice as to how to proceed.

MAKE AN ENQUIRY NOW

We can assist you with either Voluntary liquidation, Insolvency or structuring services to ensure that you are following the right path – Please call: +44 (0)203 114 5113 or fill in your details below
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