The Luxembourg Partnership Limited by Shares – Sociétés en Commandite par Actions (SCA): Bridging Partnership Flexibility with Corporate Strength

The Luxembourg partnership limited by shares – Société en Commandite par Actions (SCA) – is a unique hybrid structure that combines the flexibility of partnerships with the corporate attributes of a public limited company – Société Anonyme (SA). This dual nature makes it an attractive choice for investors and fund managers seeking a balance between governance stability and operational efficiency.

SA Attributes in the SCA

The SCA incorporates several key features of the SA, including:

1. Freely Transferable Shares: Unlike the common limited partnership – Société en Commandite Simple (SCS), where partnership interests are not freely negotiable, SCA shares are fully transferable. This facilitates liquidity and broadens the investor base, making it particularly appealing for private equity and venture capital structures.
2. Minimum Capital Requirement: The SCA, like the SA, requires a minimum share capital of €30,000.
3. Corporate Governance Framework: The SCA benefits from a structured governance system including mandatory supervisory oversight by at least three commissaires (auditors). This adds a layer of accountability and transparency, crucial for institutional investors.

Why Choose an SCA?

1. Liability Segregation & Partnership Attributes: The SCA offers a clear division between general partners (unlimited liability) and limited partners (liability limited to their contributions). This duality allows for active management by general partners while protecting passive investors.
2. Investor Appeal: The corporate-like structure of the SCA, combined with its partnership flexibility, makes it ideal for large-scale investment funds or ventures requiring sophisticated governance. It provides a robust framework for raising capital while maintaining operational adaptability.
3. Regulatory Alignment: SCAs are adaptable to Luxembourg’s financial regulatory environment, making them suitable vehicles for Alternative Investment Funds (AIFs) under the AIFMD regime. They can also transition seamlessly into other regulated structures like SICARs or SIFs if required.

The SCA’s blend of SA attributes and partnership flexibility makes it a compelling choice for international investors and fund managers seeking an efficient yet sophisticated structure in Luxembourg.

Reference:

Law of 10 August 1915 on commercial companies as amended, Art. 600-1 to 600-10.