In Luxembourg, insolvency regulation is governed by the following provisions:
The literal legal meaning of ‘voluntary liquidation’ refers to ‘corporate liquidation’.
Specific procedures are prescribed by the Luxembourg Company Law applicable to public limited liability companies, partnerships limited by shares, private limited liability companies or cooperative limited liability companies when a company goes into voluntary liquidation.
The board of directors must justify the proposed liquidation in a special report to the shareholders and attach a statement of assets and liabilities drawn up as at a date not more than three months previously. This statement is ordinarily prepared on a liquidation rather than a going concern basis; if not, this should be justified by the board.
Firstly, a shareholders’ meeting must be held, usually under the conditions sufficient to change the company’s articles and often in the presence of notary. During the meeting the decision to put the company into liquidation is made and a liquidator is appointed. The minutes must be published in the Luxembourg Mémorial.
The company now only exists for the purposes of realising its assets and paying its creditors, although it is the liquidator who is charged with these tasks. When the liquidator believes that the realisation process has been more or less completed, he must call a second general meeting at which he presents the accounts of the liquidation and at which a commissaire to the liquidation is appointed to verify these accounts.
When the commissaire is ready to make his report, a third and final meeting is called to be held before a notary. At the meeting the report of the commissaire is heard, the accounts of the liquidation are approved, and the liquidation is closed.