The Luxembourg law of 28 October 2022 creating the procedure for administrative dissolution without liquidation and amending, inter alia, (i) the Commercial Code, (ii) the New Code of Civil Procedure and (iii) the law of 19/12/2002 concerning the register of commerce and companies as well as the accounting and annual accounts of undertakings, has come into force on 01/02/2023.

As a reminder, the key takeaways of this law are:

• the procedure is available to all types of Luxembourg companies (including partnerships without legal personality), with limited exclusions (e.g. credit institutions, investment funds, securitization vehicles issuing securities offered to the public, lawyers’ firms, central securities depositories);
• the procedure is purely administrative and no court is involved in this unilateral process. The procedure is under the management of the Luxembourg trade and companies register and supervision of the Public Prosecutor;
• judicial remedy is nonetheless available before the President of the District Court who decides on the merits of the case following the procedure applicable to summary proceedings;
• the opening of an administrative procedure is at the sole discretion of the Public Prosecutor, which is exclusively empowered to determine the eligibility of a Luxembourg company to this procedure, on the basis of precise and consistent indications that the conditions are met. It is therefore not possible for third parties, creditors, shareholders or companies themselves to request or initiate the opening of such procedure;
• three cumulative conditions must be met for the administrative dissolution procedure to be initiated:

1. 1. a company must pursue activities contrary to criminal law or which seriously contravene the provisions of the Luxembourg Criminal Code[1], Commercial Code or the laws governing commercial companies including those laws governing authorisations to do business;
   2. the absence of employees;
   3. and the absence of assets.

• the concerned companies will be automatically dissolved upon the closing of the procedure, which shall be closed no later than 6 months after the publication of the opening decision.

Click here for a short overview of steps of administrative dissolution without liquidation procedure, and to access our previous article on the topic describing further the process.

Click here to access the Luxembourg law of 28 October 2022 creating the procedure for administrative dissolution without liquidation 

Please feel free to reach out to our corporate team, which will be happy to guide and advise you on the implications this law may have on your activity and affairs.

Learn more about our Corporate Expertise: Samia Rabia / Miroslava Dudas / Estelle N’zoungou / Margot Geisler

[1] This could include fraudulent bankruptcy, as well as predictable offences to money laundering such as financial sanctions contravention.