Dormant company in Luxembourg: PDAL, restoring compliance, liquidation
What a dormant company is exposed to, and the three options available to its owner.
Request informationWhat a dormant company is
A dormant company is a registered company that no longer carries out any activity. Being inactive does not remove its legal obligations: it must keep a registered office, keep its records and file its annual accounts, like any other company.
The risks of leaving it dormant
- No registered office: if the domiciliation agreement ends, the company has no valid address.
- Unfiled accounts: missing annual accounts expose the company and its managers to penalties.
- Outdated information: managers, shareholders and beneficial owners not kept up to date in the registers.
- Administrative dissolution without liquidation (PDAL): a procedure run by the Luxembourg authorities against companies that no longer meet their basic obligations.
Once the PDAL procedure is started, it leads to the dissolution of the company without a liquidation led by its owner. Acting before that point keeps your choices open.
Option 1: restore compliance
The company is brought back to date: registered office, filing of the missing accounts, update of the registers. It can then be kept, used or transferred. This is often the first step, because it settles the situation before any other decision.
Option 2: voluntary liquidation
If the company is no longer useful, the shareholders can decide to dissolve it and put it into voluntary liquidation. In outline:
- The shareholders decide the dissolution and appoint a liquidator.
- The liquidator settles the assets and debts of the company.
- The liquidation accounts are approved and the closure of the liquidation is decided.
- The closure is published, and the books and records are kept for the legal period.
Voluntary liquidation is orderly and documented. It closes the company properly instead of leaving it exposed.
Option 3: transfer, only where there are no debts
A dormant company without debts can be transferred to a new owner who wants to use it. The buyer must be identified and the company checked beforehand. If the company has debts or an unclear history, a transfer is not appropriate.
Where this site fits
We do not run the procedures described here. We introduce you to independent professionals who handle compliance, voluntary liquidation or a transfer. Requests are answered only when the requester can be identified. See the contact page and the dormant companies page.
Frequently asked questions
Does a dormant company still have to file accounts?
Yes. Inactivity does not remove the obligation to keep accounts and to file them.
What happens if the registered office is lost?
The company has no valid address, which exposes it to the administrative procedures described above. Restoring a registered office is usually the first step.
Can a dormant company be sold?
If it has no debts and its situation is clear, it can be transferred to an identified buyer after checks.
Is voluntary liquidation better than waiting?
If the company has no further use, liquidation closes it in an orderly way. Waiting leaves it exposed to filing penalties and to administrative dissolution.
General information only. It is not legal, tax or accounting advice. This site introduces you to independent professionals and provides no such service.
Tell us what you are looking for
Identified requests only. We reply to every request from an identifiable person.