The glossary to understand and take action

Equity

Equity consists of accounting resources including, in particular, capital, reserves and results according to the applicable format.

Notion comptable, fiscale ou juridique · Luxembourg Fiduciaries Editorial Team · Reviewed on

Understand the scope

Definition and points to distinguish

It corresponds neither to the bank balance nor necessarily to the company’s sale value. A shareholder loan must be distinguished from a capital contribution.

In your file

What this changes in practice

Equity includes components such as capital, reserves and profit or loss according to the applicable format. It does not correspond to an isolated sum of money in a bank account. Losses, distributions or capital transactions may alter it. Its analysis helps assess the financing structure and identify situations requiring legal or financial review. Shareholder advances must be distinguished from capital contributions.

A scenario to help you understand

Educational example

A company incurs a loss without making an equivalent payment at the closing date. Its equity may nevertheless decrease, requiring a review of the balance sheet and any decisions that may need to be taken.

Fictitious situation, presented to illustrate the concept.

Prepare for what comes next

Points to check

  • Expliquer les mouvements de chaque composante
  • Distinguer capitaux propres et dettes d’associés
  • Examiner les effets des pertes et distributions

The practical question

Find out more

Les capitaux propres sont-ils égaux au capital social ?

Le capital n’est qu’une composante des capitaux propres. Les réserves, résultats et autres éléments prévus par le cadre comptable peuvent les faire évoluer. Leur montant n’est pas non plus le solde bancaire. Pour comprendre une variation, examinez le résultat de la période, les distributions et opérations sur le capital au lieu de regarder uniquement les apports initiaux.

Connecting concepts

Terms to know as well

Continue with the concepts, contacts and procedures related to this topic.

Share capitalShare capital is an amount set out in the articles of association based on contributions recognised as capital, then amended in accordance with the applicable procedures.LiabilitiesThe liabilities side of the balance sheet presents the company's sources of financing and obligations, including equity, provisions and debts according to the applicable format.Appropriation of profit or lossDecision specifying how the profit or loss for a financial year is to be treated, within legal and statutory limits.DividendA dividend is a distribution decided for the benefit of partners or shareholders under the conditions applicable to the company.Liquidation surplusA surplus generated at the end of a liquidation, after settlement of obligations and taking account of the repayment of contributions in accordance with the applicable rules.Working capital requirement (WCR)The working capital requirement (WCR) measures the financing absorbed by the operating cycle, notably inventory and receivables, less operating liabilities.

Put it into practice

Explore further with our guides

Practical guideFinancing a startup in Luxembourg: comparing the resources availablePractical guideBusiness cash flow: anticipating pressures and deciding in timePractical guideBusiness plan in Luxembourg: building verifiable assumptionsPractical guideSARL-S in Luxembourg: conditions, limitations and start-up preparation

Sources and verification

References consulted on 20 September 2026. Official procedures specify the applicable conditions and exceptions.

This guide explains a general process. The applicable rules depend on your situation; it does not constitute personalised advice. Report a correction.

A definition gives you a reference point. To examine your situation, clarify your question with a professional.