Personal liability

Personal liability refers to the legal responsibility an individual may have for a company’s debts and obligations.

In Luxembourg, certain business structures – such as sole proprietorships – imply that the owner is personally liable. However, structures like SARL (limited liability companies) are designed to protect personal assets by limiting liability to the amount of capital invested. Understanding the nuances of personal liability is crucial for entrepreneurs when choosing the appropriate corporate form and managing risk in Luxembourg’s regulatory environment.