Which entities are concerned?
The enforcement phase will apply to entities whose RCS or RBE files contain one or more deficiencies, including incorrect, outdated, inconsistent or missing information and/or a missing legally required filing.
For the time being, non-profit associations (associations sans but lucratif) and foundations will not be subject to the enforcement phase, as awareness-raising and information measures remain ongoing in respect of these entities.
How does the enforcement phase work?
Where the LBR spots a non-compliant file, it will send a registered letter to the entity’s registered office, setting out the deficiencies identified and requesting that such deficiencies be regularised within 30 days (the “Notification”).
Particular attention should be paid to ensuring that the entity’s registered office can receive correspondence, as the enforcement procedure continues to run even where the registered letter cannot be delivered.
If the entity’s file has not been regularised in the meantime, the following sanctions will be applied progressively:
- 30 days after Notification: a warning will be displayed on the LBR portal when the entity’s file is consulted.
- 60 days after Notification: outstanding compliance issues will be indicated on RCS and RBE extracts and other certificates issued by LBR.
- 7 months after Notification: a daily penalty payment of EUR 40 will be imposed for up to 90 days, resulting in a maximum amount of EUR 3,600.
- 12 months after Notification: the entity may be deleted ex officio from the RCS and RBE. Such deletion ex officio (radiation d’office) does not result in the dissolution of the entity and may be reversed once the entity has been brought into compliance.
- After deletion ex officio (radiation d’office): the LBR will refer the file to the State Prosecutor (procureur d’Etat).
An entity may regularise its position at any stage of this procedure. Full regularisation immediately terminates the process and lifts the measures already applied, although accrued penalty payments remain payable.
In addition, any administrative decision adopted by the LBR in the context of this procedure may be challenged before the Administrative Tribunal (Tribunal administratif) within three months.
Conclusion
This new phase of the LBR’s compliance monitoring framework highlights the growing importance of maintaining accurate and up-to-date corporate information in Luxembourg. Beyond the risk of financial penalties, third parties will, when reviewing an entity’s file, be aware of the non-compliance of the entity, potentially affecting due diligence exercises, banking relationships and commercial transactions.
What should you do now?
Luxembourg entities should therefore take this opportunity to review their RCS and RBE records and ensure that all information and filings are complete, accurate and up to date. A proactive review may help identify and address any discrepancies before they trigger the LBR’s enforcement procedure and become visible to third parties.
Tiberghien Luxembourg can assist you in reviewing your RCS and RBE files, identifying any outstanding compliance issues and, where necessary, taking the appropriate steps to regularise them.
If you would like us to carry out such a review for your Luxembourg entities or if you have any questions, please contact your trusted advisor at Tiberghien Luxembourg or any of the authors of this publication.