Typical situations include:

• an SPV has sold its final investment;
• a holding structure no longer serves a purpose;
• a fund has reached the end of its term;
• all investors have been redeemed or distributions completed;
• a group is simplifying its Luxembourg structure;
• an entity is generating recurring administration, accounting and tax costs without any remaining activity.

The key distinction is between a solvent voluntary liquidation and an insolvent situation.

Not in every scenario. For a standard voluntary liquidation of an SA or SARL with several shareholders, the usual route is dissolution followed by liquidation and the shareholders appoint a liquidator. Where all shares or corporate units are legally held by a single shareholder, Luxembourg company law also provides a route for voluntary dissolution without the ordinary liquidation process, subject to the statutory conditions and the required tax, VAT and social-security clearance certificates. The relevant test is the legal ownership of the entity, not simply whether the economics ultimately relate to one investor.

A sole shareholder can nevertheless choose the standard liquidation route and appoint a liquidator voluntarily where that is preferable for the facts of the case, including where a structured wind-down, independent administration of liabilities or contractual arrangements make a formal liquidation useful. For an SCSp or a vehicle subject to special fund legislation, the LPA and the applicable statutory regime must be reviewed separately.

A voluntary liquidator should not continue an ordinary solvent liquidation if the entity is in a state where it has ceased payments and its creditworthiness is impaired. Luxembourg guidance expressly states that the liquidator must consider bankruptcy where the statutory conditions are met.

For a standard Luxembourg SA or SARL, the voluntary liquidation procedure begins with a shareholder decision to dissolve the company.

In the standard procedure, an extraordinary general meeting is held before a notary to approve the dissolution, open the liquidation and appoint the liquidator.

From that point, the company continues to exist, but for the purposes of its liquidation.

The liquidator effectively takes control of the wind-down process.

The liquidator becomes responsible for representing the company during the liquidation.

Depending on the entity, this can involve:

1. Establishing the opening position

Understanding the company’s cash, receivables, investments, creditors, tax liabilities, contracts and contingent liabilities.

2. Realising the assets

Collecting receivables, disposing of remaining assets and converting the company into a position where liabilities can be settled.

3. Settling liabilities

Paying creditors, service providers, tax authorities and other liabilities.

Known creditors who fail to claim amounts due may require amounts to be deposited with the Caisse de consignation.

4. Managing contracts

Terminating administration, domiciliation, banking, accounting, audit and other arrangements at the appropriate point.

Stopping all providers too early can be just as problematic as keeping them indefinitely.

5. Distributing the liquidation surplus

The final liquidation surplus should only be distributed once liabilities have been settled or appropriately provided for. This does not necessarily mean that no cash can be returned before every last invoice has been paid. Depending on the legal form, governing documents and circumstances, an interim liquidation distribution may be possible where the liquidator is satisfied that adequate cash or reserves are retained for known and reasonably foreseeable liabilities, tax, wind-down costs and contingencies. The basis for the reserve and the distribution should be carefully documented and, where appropriate, confirmed with legal and tax advisers.

6. Preparing liquidation accounts and reporting

The liquidator prepares the liquidation accounts and reports to the shareholders or partners.

If liquidation continues for more than one year, Luxembourg corporate law requires annual reporting explaining why the liquidation has not yet been completed.

For an ordinary SA or SARL following the standard corporate liquidation procedure, the opening decision to dissolve the company and appoint the liquidator is taken at an extraordinary general meeting before a notary. Once the liquidation work is complete, the liquidator prepares the liquidation accounts and report and convenes a further general meeting. At that meeting, the shareholders or partners review the liquidator’s report and appoint one or more commissaires to examine the liquidation documents and accounts under Article 1100-15 of the 1915 Companies Law.

After the commissaire has issued its report, a final general meeting considers the liquidator’s and commissaire’s reports, approves the liquidation accounts, grants the relevant discharge and declares the liquidation closed. In practice these are often referred to as the second and third liquidation meetings. The notary is required for the opening dissolution meeting of the standard SA/SARL procedure; the final closing meeting does not necessarily need to be held before a notary. The articles, legal form and any special fund regime should nevertheless be checked before determining the exact meeting formalities.

A major mistake is applying the same three-step liquidation template to every Luxembourg legal form.

An SCSp is fundamentally different from an SARL or SA.

An SCSp has no legal personality separate from its partners, and its operation – including its dissolution and liquidation mechanics – is primarily governed by the limited partnership agreement. Where the LPA is silent, the 1915 Companies Law refers back to the rules applicable to an SCS.

Accordingly, before starting an SCSp liquidation, one should review:

The legal form + the LPA + any applicable fund legislation + the investor arrangements.

There should be no assumption that the corporate process applicable to an ordinary SARL automatically applies to the partnership.

Additional rules apply to regulated investment funds.

UCITS, Part II UCIs, SIFs and SICARs remain subject to CSSF supervision during a non-judicial liquidation, and the liquidator must be approved by the CSSF. The CSSF also expects interim financial information, progress reporting, closing liquidation accounts and post-liquidation information.

The liquidation of a regulated fund is therefore not simply a company-law exercise.

The final distribution is not necessarily the end of the process.

A properly managed liquidation should also deal with matters such as:

RCS filings, tax clearance, VAT deregistration where applicable, bank account closure, cancellation or update of registrations, records retention, residual cash and consignation.

The liquidator should aim for an entity that can genuinely be closed rather than one that has economically disappeared while still legally generating obligations.

Amana acts as liquidator for Luxembourg companies, SPVs and investment structures, coordinating the wind-down from opening of the liquidation through settlement of liabilities, distributions, reporting and final closure (including publications).

Liquidation quick reference

This table is a practical starting point only. The legal form, ownership, constitutional documents and any applicable fund legislation should be reviewed before selecting the route.