Winding up - Luxembourg
Types of dissolution
Several events may lead to a commercial or craft activity ending, e.g. retirement, ill health or death of the company director, disagreement between partners, a legal decision, etc. The winding up process involves complete cessation of activities. For companies, this is known as dissolution and is followed by liquidation of the company.
This process refers to liquidation of the company assets. The legal personality of the company ceases to exist and the company continues only until its liquidation has been concluded.
In Luxembourg, there are two types of liquidation:
- judicial liquidation, following a request of the state prosecutor's office or a partner;
- statutory liquidation, which is decided at a general meeting of shareholders.
The dissolution of the company is subject to taxation.
When filing for bankruptcy is the only option left for a business owner, it pays to cut losses, initiate proceedings sooner rather than later, and move on to a new business project.
The Centre de formalités (Chamber of Trades) and the Espace entreprises (Chamber of Commerce) provide help with formalities and administrative procedures.
The Guichet entreprises business portal provides several online forms.
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 you have completed these operations, the liquidation must be concluded. This 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.
The Guichet entreprises business portal also provides various information to entrepreneurs.
Check also the legislation on this topic in: