A Sàrl is a company where liability is limited to the contribution of each partner. It is a closed company to the extent that the intuiti personae principle plays a much greater role than in a société anonyme (SA).

This type of company occupies a prominent position in the Luxembourg economy on account of its flexibility and the size of its management.

The number of partners can vary from 1 to a maximum of 40. Where theres is only one partner, the term société à responsabilité limitée unipersonnelle is often used, i.e. a one-man Sàrl. In the context of a group of companies, such a one-man Sàrl allows for instance the creation of subsidiaries held by a single shareholder.

A Sàrl benefits from the tax treaties and EU directives applicable to the taxation of parent companies and sbsidiaires.

A Sàrl can opt to be taxed as a Soparfi (A financial holding company or Société de particaition financière) when including such a definition in its articles of association. Moreover, it can benefit from contributions in kind without the involvement of an auditor, who would, in the case of a société anonyme have to assess the amount of the contribution.

In contrast to ordinary shares, company shares in a Sàrl are not transferable and cannot be issued to the public.

There are restrictions on transferring Sàrl shares on account of the intuiti personae principle, and any transfer is subject to an approval procedure. This allows a company to retain control over future partners when a share is transferred to a third party.

Any transfer to a person with nothing to do with the company (i.e. a thirs party) must be authorised by the other partners. Similarly, a partner wishing to transfer his share(s) must notify the company of his intention. Transfer authorisation is expressly accorded to a shareholder majority representing at least 75% of the company's pait-up capital. Any transfer must be notarised.


The capital of a Sàrl amounts to exactly €12.500. It must be paid up in full on the establishment of the company by the partner(s). Company capital may be denominated in a currency other than Euro.

The capital is generally paid up in cash, but may also be paid in kind, for instance in the form of a tangible or intangible asset, without the need to have an auditor assess the value of the asset. Howewer, the notary certifying this contribution in kind will generally request from the partner(s) in question certificates allowing the exact value of the contribution to be verified. A notarised deed in mandatory to set up a Sàrl.


The managing director may be of Luxembourg or foreign nationality. He does not have the status of a trader (commerçant). In a Sàrl context there can be two managing directors, the administrative director and the technical director.

The managing director may also be a salaried employee of the company. The social security status of the salaried director is dependent on whether he is a partner or not, whether he holds a certain percentage of company shares, and/or whether he is an administrative or technical director.

A Sàrl may be converted into a société anonyme by decision of an extraordinary general assembly. However, in such a case, any contribution in kind to the capital of the société anonyme will need to be evalueted by an auditor.