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New Luxembourg Law on administrative dissolution without liquidation of companies

A new Law of 28 October 2022 on administrative dissolution without liquidation (“Law”) has been recently passed by the Luxembourg legislator and will enter into force on 1 February 2023. The Law introduces a new procedure allowing the dissolution of inactive companies which meet certain criteria by an administrative decision only, i.e. outside of the judicial dissolution and liquidation.

Companies concerned

A company may be dissolved within the administrative procedure, if it meets the following criteria:

– it pursues activities in breach of criminal law or it seriously infringes provisions of the Commercial Code or the laws governing commercial companies, including laws governing authorisations to do business (e.g., it has no registered office, it has failed to file annual accounts, its management has resigned with no replacement);
– it has no employees;
– it has no assets.

Dissolution procedure

The procedure will be opened by the administrator of the Luxembourg Trade and Companies Register (“RCS”) at the request of the Public Prosecutor. The decision will be notified to the company at the address registered at the RCS and be published in two Luxembourg newspapers and at RESA (the Luxembourg electronic platform for publication in respect of companies and associations).

The administrator will have to verify whether the concerned company has any assets and employees. For this purpose, and in order to assess the financial and administrative situation of the company, the administrator will send requests to the following entities, institutions and authorities:

– financial institutions, where the company may have bank accounts;
– non-life insurance companies;
– mortgage offices;
– the administration of the cadaster and topography;
– the national automobile traffic company (SNCA);
– the joint social security center (CCSS).

The deadline for response by the above-mentioned entities, institutions and authorities is set at one month. The administrator will inform the Public Prosecutor of the results of the verification.

If all conditions for the administrative dissolution are met, the Public Prosecutor will request the administrator to proceed with the administrative dissolution of the company. Within six months of the publication of the opening of the dissolution procedure, the decision to close the dissolution must be published at RESA, and the company will be automatically dissolved without liquidation.

If one of the conditions is not met, the Public Prosecutor will request the administrator to stop the dissolution. Such decision will also be subject to the publication at RESA.

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