LIQUIDATION IN LUXEMBOURG

Company liquidation in Luxembourg

Closing a company in Luxembourg is not simply an administrative formality, it is a structured legal process governed by the Law of 10 August 1915 on commercial companies. Liquidation involves settling all outstanding debts, finalising obligations with employees and creditors, and distributing remaining assets to shareholders before the company can be struck off the Luxembourg Business Register (RCS).

Liquidation in Luxembourg is the formal process of closing a company, settling its debts, and distributing remaining assets to shareholders.

Whether you are considering :
  • a voluntary dissolution: initiated by shareholders when the company is solvent. 
  • facing a judicial liquidation: imposed by the court in cases of insolvency or regulatory breaches., or 
  • dealing with bankruptcy: managed under strict supervision, where assets are sold to cover debts in order of priority.

Each pathway requires strict compliance with statutory procedures, accounting standards (LuxGAAP or IFRS), and often regulatory filings with the CSSF if financial institutions are involved. Mistakes or delays can result in personal liability for directors, disputes with creditors, or tax penalties.

Understanding the legal framework and procedural steps is essential to protect your interests and comply with local regulations.

LIQUIDATION PROCESS

1

Step 1 - Shareholder Resolution

A general meeting is held to decide on the dissolution. The liquidator is appointed, and the decision is notarised.

2

Step 2 – Appointment of the Liquidator

The liquidator manages all operations, including asset sales, debt settlement, and final accounts.

3

Step 3 – Public Notice and Filing

The dissolution decision is published in the Luxembourg Trade and Companies Register (RCS) and the electronic gazette (RESA).

4

Step 4 – Debt Settlement and Asset Distribution

All creditors are paid, and any surplus is distributed to shareholders according to shareholding.

5

Step 5 – Closing General Meeting

The liquidator presents the final accounts, which shareholders approve before closing the liquidation.

6

Step 6 – Deregistration

The company is removed from the RCS, and its legal personality ceases.

LIQUIDATION TYPES

Understanding Company Liquidation in Luxembourg

 

Voluntary dissolution (Liquidation volontaire)

Initiated by shareholders when a company has achieved its objectives or is no longer profitable.

 

Judicial Liquidation (Liquidation Judiciaire)

Ordered by the court when a company is insolvent and unable to meet its obligations. This procedure is often initiated by creditors or the public prosecutor to protect the interests of stakeholders.

 

Bankruptcy (Faillite)

A form of judicial liquidation triggered when the company is declared bankrupt. It includes court supervision, the appointment of a receiver, and asset liquidation to satisfy creditors.

 

Simplified Liquidation

A faster procedure available for small companies meeting certain conditions (e.g., no employees, no pending litigation, limited number of creditors). This process reduces administrative steps and costs.

 

Three-Stage Liquidation Process

In Luxembourg, liquidation is often described in three phases: Dissolution decision – Shareholders resolve to dissolve the company. Liquidation phase – Settlement of debts, sale of assets, and preparation of final accounts. Closure (radiation) – Removal from the Luxembourg Business Register (RCS).

 

Accounts of Liquidation

Special Situations: Funds, Banks, and Cross-Border Groups

LIQUIDATION EXPERT INSIGHTS

10 Common Mistakes to Avoid During Company Liquidation in Luxembourg

10 Common Mistakes to Avoid During Company Liquidation in Luxembourg

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Discover the top 10 pitfalls to avoid when liquidating a company in Luxembourg to ensure a smooth and compliant process.

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LIQUIDATION F.A.Q

Voluntary liquidation is initiated by shareholders, while judicial liquidation is ordered by a court due to insolvency.
Yes, if your company meets certain conditions such as having no employees, no litigation, and limited creditors.
It varies from 3 months (simplified) to over 18 months (judicial).
Yes, Luxembourg law requires appointing a liquidator to oversee the process.
All debts must be settled before closure; otherwise, liquidation cannot be finalised.

LIQUIDATION LEGAL AND REGULATORY FRAMEWORK

Get Expert Help Today
If you are considering liquidation in Luxembourg, contact Financial Services Luxembourg for a free initial consultation. Our experts ensure a smooth, compliant, and cost-effective closure of your company.

Call us: +352 661 198 544
Email: info@financialservices.lu

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READY TO CLOSE YOUR COMPANY?
How Financial Services Luxembourg can assist you in your Liquidation

Our team of licensed accountants and corporate advisors assists with every stage of liquidation, including:

  1. Legal and tax advisory
  2. Preparation of all required documents
  3. Liaison with notaries and public authorities
  4. Asset valuation and debt settlement
  5. Filing with RCS and RESA
  6. Closing accounts and tax returns