The glossary to understand and take action

Sole proprietorship

A sole proprietorship allows a person to carry out an activity in their own name, without forming a separate company.

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

Understand the scope

Definition and points to distinguish

The absence of share capital in a company does not remove professional obligations or asset-related risks. Review authorisations, insurance, accounting and the tax regime before starting.

In your file

What this changes in practice

A sole proprietorship allows a person to operate in their own name, without creating a separate company. This choice must be considered in light of its asset-related, tax and social security consequences, as well as the obligations linked to the activity. The apparent simplicity of setting up does not remove invoicing, accounting or authorisation requirements. It is also necessary to organise the practical separation of professional and personal flows so that records and supporting documents remain understandable.

A scenario to help you understand

Educational example

A self-employed person sometimes pays professional expenses using a personal account. They keep the supporting documents and clearly identify these movements to prevent them from becoming impossible to explain when preparing the accounts.

Fictitious situation, presented to illustrate the concept.

Prepare for what comes next

Points to check

  • Examiner la responsabilité personnelle
  • Vérifier autorisation et affiliation
  • Séparer les pièces et flux professionnels

The practical question

Find out more

Comment organiser les finances d’une activité en nom propre ?

Distinguez les opérations professionnelles et personnelles dans les justificatifs et le suivi des fonds. Les prélèvements de l’exploitant ne doivent pas être confondus avec toutes les charges de l’activité. Préparez aussi les échéances fiscales et sociales : la somme disponible sur le compte ne représente pas nécessairement le revenu pouvant être consommé sans réserve.

Connecting concepts

Terms to know as well

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

Business creationBusiness creation organises the transition from a project to an operational activity, as a sole trader or within a company.Self-employed contribution assessment baseProfessional income base used to calculate the self-employed person's social security contributions.Business permitThe business permit allows the pursuit of activities subject to it, where the conditions relating to the business and its manager are met.Legal formThe legal form defines the legal framework for the activity: organisation, liability and relations between participants.SARLAn SARL is a private limited liability company whose organisation and shareholders’ rights are governed by law and the articles of association.SARL-SThe SARL-S is a simplified variant of the SARL, subject to specific conditions concerning, in particular, the shareholders, the activity and the capital.

Put it into practice

Explore further with our guides

Practical guideSetting up a business in Luxembourg: choosing the legal form and preparing the launch

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.