Business permits in Luxembourg: the manager’s professional integrity, unpaid public debts and revocation

The judgments

The question

In Luxembourg independent activities in trade, crafts, industry and the liberal professions covered by the Law need a business permit (autorisation d’établissement) under the Law of 2 September 2011, the loi d’établissement (Article 1). The permit is not issued to the business alone. The undertaking must designate a natural person, the manager (dirigeant), who carries the qualification and professional integrity (honorabilité professionnelle, often rendered “honourability”) on which the permit rests, and who must not have evaded tax and social security charges, either personally or through a company he runs or has run (Article 4). If the manager stops meeting those requirements, the Minister for the Middle Classes (ministre des Classes moyennes) may revoke every permit that relies on that person (Article 28(3)).

For founders, investors and advisers the practical questions are concrete. Does a criminal conviction unrelated to the business count? How old may the facts be? Can the Minister refuse a new permit until the debts of an earlier, bankrupt company are paid? Is it enough to resign as director and publish the resignation in the Trade and Companies Register (RCS)? This review analyses four cases, each followed through the Tribunal administratif (administrative tribunal, first instance) and, for three of them, the Cour administrative (administrative court of appeal): two on criminal convictions (a revocation in 2020–2021 and a refusal in 2022–2023), one on the separate debt condition in Article 4, point 4 (2024), and one on a former director of a bankrupt company who never told the Minister that he had left (2025).

The legal framework

The permit and the manager

Article 3 provides that the permit required in advance “is issued by the Minister if the conditions of establishment, integrity and qualification laid down in Articles 4 to 27 are met”. Article 28(1) adds that the Minister issues the permit on application and after an administrative investigation (instruction administrative), and Article 28(3) lets the Minister revoke the permit “on the grounds that would have justified refusing to issue it”. All the courts read these provisions together: a lack of integrity on the part of the manager is a legal ground for refusing a permit, and therefore its absence or loss in the manager of an undertaking that already holds a permit justifies revocation (Cour administrative, 4 May 2021, no. 45507C, p. 6; Tribunal administratif, 15 September 2025, no. 49587, p. 9).

The judgments apply Article 4 in its earlier wording (the 2024 and 2025 judgments say so expressly: “in their version applicable at the time”, “in its version applicable at the time the contested decision was taken”). In that wording, as quoted by the Tribunal in each case and by the Cour administrative in 2024, the manager had to: (1) meet the requirements of professional qualification and integrity; (2) actually and permanently ensure the day-to-day management of the undertaking; (3) have a genuine link with the undertaking “by being its owner, partner, shareholder or employee”; and (4) not have evaded social and tax charges “either in his own name or through a company that he manages or has managed”. Our translation follows the consolidation applicable from 1 September 2023, after all four ministerial decisions reviewed here, and the Legilux consolidation marks Article 4 as amended by the Law of 26 July 2023. Point 2 now adds “through physical presence at the establishment”; point 3 now requires, for a company, that the manager be “entered in the Trade and Companies Register as an agent of the undertaking”; and point 4 now expressly covers “withholding taxes”.

Professional integrity in Article 6

Article 6 governs the integrity condition. The courts quoted it in the following wording (our translation of the text reproduced in the judgments): - paragraph (1): the condition “is intended to safeguard the integrity of the profession and the protection of future contracting parties and customers”; - paragraph (2): integrity “is assessed on the basis of the record of the manager and of all the information provided by the administrative investigation, in so far as it concerns facts dating back no more than ten years”, and it is also required of the majority shareholder and of persons able to exercise a significant influence over management; - paragraph (3): “any conduct or action which so seriously affects his professional integrity that, in the interest of the economic actors concerned, he can no longer be allowed to carry on or continue to carry on the activity authorised or to be authorised” is a failing that deprives the manager of integrity; - paragraph (4): “by way of derogation from paragraph (3)”, a list of failings that affect integrity d’office, of their own force: (a) using or acting as a front person (personne interposée); (b) falsified or untruthful documents in the application; (c) repeated failure to make RCS publications or to keep proper accounts; (d) “the accumulation of substantial debts owed to public creditors in the context of a bankruptcy or judicial liquidation that has been declared”; (e) “any final, serious or repeated conviction connected with the activity carried on”. The 2024 and 2025 judgments quote a further point (f), a breach of the obligation in Article 4bis.

Our current text differs in several respects. Article 6(2) now names the manager, the majority shareholder and persons with significant influence in its first subparagraph and keeps the ten-year window in the second. Article 6(3) now speaks of conduct “contrary to a law, a regulation or an administrative measure” and no longer refers to “the interest of the economic actors concerned”. Article 6(4) now begins “the following also constitute failings” rather than “by way of derogation from paragraph (3)… constitute d’office”, and its list is longer and re-lettered: RCS filing failures “on at least two occasions during the last three financial years” (point (c)); persistent failure to register in the Register of Beneficial Owners (point (d)); bankruptcy debts, whose size “is assessed in relation to the full-time equivalent workforce of the undertaking and in relation to its turnover for the three years preceding the bankruptcy” (point (e)); “any final conviction resulting in a criminal or correctional penalty for an offence connected with the activity carried on or to be carried on” (point (f)); and new points on the travel guarantee, unfiled tax returns and concealed liabilities (points (g) to (i)).

Public debts: a separate condition

The debt requirement in Article 4, point 4 has its own history, which the Cour administrative set out in 2024 from the commentary on Article 3 of bill no. 6158 (projet de loi), the provision that became Article 4, point 4. The requirement derives from Article 2, fifth subparagraph, of the amended Law of 28 December 1988, under which the permit could already be refused or revoked for breach of professional, tax or social obligations; Article 46(1) of the 2011 Law repealed the Law of 28 December 1988 regulating access to the professions of craftsman, trader and industrialist and to certain liberal professions. The commentary describes managers who “abandoned the undertaking in good time before the bankruptcy, while immediately relaunching themselves with a new undertaking, leaving behind them empty shells crammed with debts”, and states that the new article deals with debts to public creditors “further upstream” than the integrity chapter (Cour administrative, 22 October 2024, no. 50470C, p. 7).

The current Law adds mechanisms that the courts did not apply. Article 7bis(1) sets thresholds below which no payment agreement with the authorities is needed (1% of the VAT or direct tax actually paid in the last five years, four months of social security contributions), with no threshold for withholding taxes. Article 28(1), second subparagraph makes a new permit after a change of manager conditional on the undertaking having no social and tax debts above those thresholds and being up to date with tax returns, RCS filings and the beneficial owner register. Article 7 obliges the Minister to grant a “second chance” permit to an undertaking that engages a former manager of a bankrupt undertaking, by way of derogation from Article 6(4)(e), if the bankruptcy was directly caused by one of seven listed events. Articles 32bis, 32ter and 32quater require the AED, the Joint Social Security Centre (CCSS) and the ACD to inform the Minister of missing returns, non-payment or failed recovery.

The manager’s departure and the front person

Under Article 29, “where the manager leaves, the Minister must be informed within one month”, and a provisional permit may be granted while a new manager is found; the 2025 judgment quotes the first sentence in the same terms as our current text. Any change of managers requires a new permit (Article 28(4)(b)). Acting as a front person is also a criminal offence: Article 39(3)(c) punishes those who “have acted as a front person by making their professional qualification and integrity available to a third party while leaving the actual management of the undertaking to that third party”, with imprisonment of eight days to three years and a fine of €251 to €125,000; the Tribunal administratif quoted this provision in its 2025 judgment (p. 10, footnote 3).

Judicial review

In every case the Tribunal declined jurisdiction over the request for reformation (recours en réformation), because neither the 2011 Law nor any other provision provides for a full appeal on the merits in this field, and heard only the action for annulment (recours en annulation). On annulment the court examines whether the material facts are established and whether the established grounds legally justify the decision, and checks for lack of competence, excess or misuse of power and breach of the law or of procedural safeguards (Tribunal administratif, 7 December 2020, no. 42677, pp. 5–6). Procedural complaints were raised under Article 6 of the Grand-Ducal Regulation of 8 June 1979 on the procedure to be followed by State and municipal administrations, which requires administrative decisions to rest on legal grounds and certain categories of decisions to state them at least summarily; that Regulation is not in our translated selection.

Revocation after a conviction unrelated to the business: company (AB) and Madame (A)

The facts

Company (AB), a société à responsabilité limitée, held three business permits issued on 15 and 23 September 2017 for real estate activities: property manager and managing agent of co-owned properties, property developer and estate agent (see the definitions in Article 2, points 1°, 32°, 29° and 2°). Its manager was Madame (A). By a judgment of the Cour d’appel (court of appeal), criminal chamber, of 13 February 2018, she had been convicted, as manager of a cabaret, of human trafficking committed by coercion, threat of force and use of force, of procuring and of money laundering, for facts between 2010 and 2012. The sentence was three years’ imprisonment, wholly suspended, a fine of €20,000, a five-year ban on running or working in a drinking establishment and a five-year deprivation of the rights listed in Article 11 of the Criminal Code (Cour administrative, 4 May 2021, no. 45507C, pp. 4 and 8). The ministerial letter of 22 November 2018 also referred to a conviction for procuring concerning another cabaret, by a judgment of 16 January 2018.

On 11 April 2018 the Minister of the Economy wrote to the company that Madame (A)’s integrity was affected and that he intended to revoke the permits. A meeting followed on 11 July 2018 and the company sent further material on 24 July 2018. On 22 November 2018 the Minister announced his intention to revoke, finding the facts so serious that her professional integrity was affected to a point “that, in the interest of the economic actors concerned, she can no longer be allowed to carry on or continue to carry on the activity of manager of an undertaking”, and gave eight days for observations. On 21 January 2019 the Minister for the Middle Classes revoked the three permits under Articles 28(3) and 6, stating that under Article 4 integrity is “an essential criterion for maintaining the business permit”.

The Tribunal administratif

The company and Madame (A) brought proceedings on 16 April 2019. In its judgment of 7 December 2020 (no. 42677), the Tribunal rejected four lines of argument.

First, the decision had been sent to the company’s former registered office, which had moved with effect from 1 June 2018 as published in the electronic register of companies on 7 June 2018, and the letter came back on 25 January 2019 marked “no box under this name”. The decision had, however, also been sent on 21 January 2019 to the company’s counsel. The Tribunal held that notification lies downstream of adoption of a decision: failure to notify does not affect its legality but only its enforceability against the addressee, and the appropriate sanction is that time limits for bringing proceedings are suspended. Since the applicants had brought proceedings in time, the ground failed (pp. 4–5).

Second, the statement of reasons was sufficient: the decision cited the conviction of 13 February 2018, its effect on integrity and the relevant articles, and contrary to the applicants’ reading both the letter of 22 November 2018 and the decision referred to Article 6(2) (p. 5).

Third, on the merits, the Minister had relied on Article 6(2), not on Article 6(4)(e), which makes a conviction “connected with the activity carried on” a failing of its own force. Unlike point (e), paragraph (2) does not require the manager’s record to be linked to the activity, so the argument that trafficking and procuring had nothing to do with real estate was irrelevant (p. 7). The Tribunal added that a criminal conviction does not “necessarily and peremptorily” remove integrity, “on pain of making automatic the application of an administrative sanction with serious consequences”; the facts must be assessed in each case, in particular in relation to the activities authorised (pp. 7–8). As to time, although the facts dated from 2010 to 2012, the conviction became final only on 13 February 2018, so the Minister could not be criticised for starting the revocation procedure on 11 April 2018 (p. 8).

Fourth, on gravity, the Tribunal rejected as “essentially hypothetical” the government’s claim that Madame (A) might keep links with procuring networks and put her real estate activity at the service of ill-intentioned clients. It nevertheless held:

It is the particular gravity of the facts in question, which consisted, in order to maximise turnover, in pressuring women to have sexual relations with clients under the threat of beatings and dismissal, that leads the tribunal to hold that in this case a single criminal conviction is sufficient to constitute a risk for the safety of the profession concerned, or for future customers or contracting parties.

Neither her irreproachable life since then, nor the involvement of notaries in real estate transactions, nor the company’s employees, nor the fact that it had no more debts to public creditors changed that conclusion; as to the notaries, integrity is assessed “solely in the person of the manager”. The grounds of a breach of Article 6 and of proportionality were rejected and the applicants were ordered to pay the costs (frais et dépens).

The appeal and the grounds

The appeal was lodged on 13 January 2021 and limited to the rejection of the action for annulment. The appellants argued that the decision was insufficiently reasoned, that the real estate activities had nothing to do with the cabaret, that Madame (A) had voluntarily surrendered the cabaret permit in 2012 before any prosecution, had paid off the tax debts of the cabaret and changed the company’s object, and that the Minister had failed to make an individual assessment taking account of the age of the facts, her irreproachable conduct since 2012 and her wish to “resocialise”. They added that the facts, though less than ten years old, were close to the limit, that the law does not create an automatic mechanism of refusal or revocation, and that the revocation was disproportionate (pp. 3–5).

The Cour administrative

In its judgment of 4 May 2021 (no. 45507C) the Court first held that the respondent State, unlike an appellant, may refer back to its first-instance submissions, which had in any event been supplemented and attached to the rejoinder (p. 5).

On reasons, the Court held that the ground “proceeds from the mistaken view” that the legality of a revocation depends on exhaustive reasoning: a lack of stated reasons affects only the time limits for bringing proceedings, not legality. Article 6 of the 1979 Regulation is satisfied if the written decision states concrete grounds; their merits are a matter for the substantive review. Here the decision gave Articles 4 and 6(2) as its legal basis and the conviction as the reason, and referred to the letter of 22 November 2018, which the government delegate had further developed in the proceedings (pp. 5–6).

On the merits, after reading Articles 3, 4 and 28(3) together, the Court analysed Article 6:

The Minister is thus called upon to take his decision on the possible loss of professional integrity on the basis of a complete examination of the manager’s record and of all the information provided by the administrative investigation in so far as it concerns facts dating back no more than ten years. It is thus not required that the manager’s record be connected with the activities for which the business permit was granted.

The Minister therefore has “in principle a wide margin of appreciation”, save where the specific cases of paragraph (4), the failings d’office, apply, where he has none (p. 8). Because the decision rested on paragraph (2) and not paragraph (4), the argument that the convictions had no link with real estate “lacks relevance”. The facts (2010 to 2012) were within ten years; the offences were “particularly serious, of such a nature as to make her lose her professional integrity”; and the claim that she had broken with her former life could not, “in view of the gravity of the offences committed”, lead to the conclusion that she again met the condition. The Minister had stayed within his margin of appreciation, and the appellants had not shown that revocation was disproportionate to the legislature’s aim of ensuring that undertakings are managed by persons of integrity (p. 8). The appeal was dismissed, the judgment confirmed and the appellants ordered to pay the costs of the appeal (p. 9).

Refusal after a conviction for fraud and forgery: Monsieur (K)

The facts and the decisions

On 16 July 2020 Monsieur (K) applied for a permit to carry on, on his own account, road haulage with vehicles under 3.5 tonnes, taxi and car rental, installation of electronic equipment and a craft activity working minerals. On appeal he explained that he intended in particular to deliver meals through a delivery platform, and that because of his criminal record he had been turned down for several salaried jobs, so that self-employment was one of his few ways back into work (Cour administrative, 17 January 2023, no. 47858C, pp. 2–3).

The Minister refused on 30 September 2020, finding his integrity compromised under Article 6(3) because of a judgment of the tribunal d’arrondissement (district court) of Luxembourg, sitting in criminal matters, of 20 June 2019. After Monsieur (K) asked for a review on 4 May 2021, the Minister confirmed the refusal on 11 May 2021: the conviction “so seriously affects your professional integrity that a business permit can no longer be granted to you in the interest of the economic actors concerned”.

The Tribunal administratif

Monsieur (K) sued on 10 August 2021. His application left the external legality of the decision to the court’s discretion (se rapporte à prudence de justice); the Tribunal held that, although such a statement amounts to a challenge, the ground must still be developed, and rejected it (Tribunal administratif, 18 July 2022, no. 46347, p. 4). On the merits he argued that his conviction was not one “connected with the activity carried on” under Article 6(4)(e), which must be read strictly, and invoked non bis in idem, the freedom to choose an occupation and the freedom to conduct a business (Articles 15 and 16 of the Charter of Fundamental Rights), equality (Article 14 ECHR and the Constitution) and freedom of trade and industry (Article 11(6) of the Constitution). He also relied on the Chamber of Commerce’s regret, in its opinion on a bill amending the 2011 Law, that the integrity conditions had not been changed (p. 3).

The Tribunal held that Article 6(3) confers a wide discretion and that falling outside paragraph (4) does not prevent the Minister from refusing a permit where he finds conduct seriously affecting integrity (p. 5). The Minister had relied on paragraph (3), which, unlike point (4)(e), does not require any link with the activity (p. 6). The criminal judgment itself was not in the file, but the criminal record extract of 19 June 2020 showed convictions for facts of 8, 20 and 22 September 2016, qualified as forgery of private documents, use of forgeries, fraud and attempted fraud and money laundering, theft, and forgery of public documents, use of forgeries and money laundering, and a sentence of 24 months’ imprisonment, 12 of them suspended. These offences were of “undeniable gravity” and revealed “an attitude at the very least disrespectful of the law in general”; the conviction sufficed to treat him as a risk for the safety of the profession and for future customers (p. 6).

On non bis in idem, the Tribunal held that the Minister, as an administrative authority acting within his own sphere, is not bound by the criminal court’s assessment: the criminal judge punishes a specific offence, whereas the Minister, applying the precautionary principle, ensures that the applicant is not a risk for the profession or for future customers; nor is the Minister bound by whether or not the criminal court imposed a ban on trading (p. 7). On the Charter, it read Article 15(2) with Article 52(2) and Articles 45 and 49 TFEU, and held that a refusal based on public order considerations, with its legal basis in Articles 4, point 1 and 6(3), does not breach Articles 15 or 16; in any event Monsieur (K) had not been barred from paid work in general (pp. 7–8). A discretionary power does not in itself breach equality, only its concrete application can, and no concrete discrimination was shown; Article 11(6) of the Constitution permits restrictions, though not the suppression of the freedom; and Article 14 ECHR was not engaged because no Convention right was invoked (pp. 8–9). The Tribunal recalled that under Article 6 of the amended Law of 27 July 1997 a court need not refer a constitutional question to the Cour constitutionnelle where, among other cases, the question is devoid of any foundation, and rejected the constitutional grounds as lacking any foundation (pp. 8–9). The action was dismissed with costs.

The appeal

The appeal, lodged on 25 August 2022, raised a new ground of insufficient reasoning, argued that Article 6(3) did not define the conduct it covers or a threshold of seriousness and so left the Minister an arbitrary power contrary to Article 10bis of the Constitution, Article 14 ECHR, Article 1 of Protocol No. 12 and Article 21 of the Charter, and repeated the non bis in idem and economic freedom grounds. Monsieur (K) also pointed to his training and diplomas (pp. 3–4).

The Cour administrative

In its judgment of 17 January 2023 (no. 47858C), the Court rejected the reasoning ground: even if justified, a failure to state reasons does not lead to annulment but only prevents time limits from running, and reasons may be supplied later, including in the litigation; here the decision, the State’s additions and the documents had allowed him to defend himself without misunderstanding the scope of the refusal (p. 4).

On the substance, the Court restated the reading of Article 6 adopted in 2021, word for word on the key points: no link with the activity is required; the Minister has a wide margin under paragraph (3), save for the paragraph (4) cases; and falling outside paragraph (4) does not deprive the Minister of the right to refuse. It then added the limit:

While the Minister’s power under Article 6(3) of the Law of 2 September 2011 is admittedly discretionary, it is not for all that removed from all judicial review, in the sense that, on pain of establishing an arbitrary power, the administrative judge hearing an action for annulment must examine the existence and accuracy of the material facts on which the contested decision is based and verify whether the duly established grounds are such as to justify the contested decision in law.

The facts dated from September 2016 and so fell within the ten-year window; the claim that they were almost seven years old was irrelevant, since at the date of the decision they were “only 5 years old” (p. 6). The Court endorsed the Tribunal’s statement that a conviction does not necessarily entail a lack of integrity and that the facts must be assessed case by case, in particular in relation to the activities applied for. Although neither party had produced the criminal judgment, and the State appeared to have relied only on the criminal record extract, so that “the exact circumstances of the offences … remain unknown”, the offences listed constituted “by their nature and their undeniable gravity” a failing that deprived him of integrity (pp. 6–7). Taking into account the size of the sentence, the nature of the offences, the fact that the facts and the conviction were “still relatively recent” and the purpose of the integrity check, which is to ensure the safety of the profession, to avoid the failure of future activities and to protect future customers and contracting parties, the Minister had not exceeded his margin of appreciation (p. 7).

On non bis in idem the Court went further than the Tribunal:

The contested refusal decision therefore does not constitute a penalty, but an administrative police measure intended to reserve access to a regulated profession to persons who meet the condition of professional integrity. The non bis in idem principle cannot therefore apply in this case …

The freedoms under Articles 15 and 16 of the Charter and Article 11(6) of the Constitution are “freedoms of balance, not absolute” that the legislature may restrict, in particular for reasons of public order; Monsieur (K) had not been barred from paid work in general (p. 7). A discretionary power does not breach Article 10bis ipso facto, only its concrete application could, and no difference in treatment of persons in an identical situation had been shown. Article 6(3) merely frames, and does not suppress, the freedom of trade. The Tribunal had therefore rightly refused to refer a question to the Cour constitutionnelle under Article 6, second subparagraph, point b) of the amended Law of 27 July 1997, and the appellant had in any event not formulated a precise question (p. 8). The appeal was dismissed, the claim for a procedural indemnity (indemnité de procédure) rejected and the appellant ordered to pay the costs of the appeal (p. 8). According to the Court, the Tribunal had likewise rejected his claim for a procedural indemnity (pp. 2–3).

Unpaid debts of a former company as a separate bar: company (A) S.A. and Monsieur (B)

The facts

The Cour administrative and the Tribunal pseudonymise the parties differently; this section uses the Cour administrative’s names. On 20 September 2022 Monsieur (B) applied for a permit to carry on, in the name and for the account of company (A) S.A., the activities of real estate agency, property development, managing agent and general trade. The Minister refused on 14 November 2022: the CCSS, the AED and the ACD had reported that Monsieur (B) was “not up to date with the payment of social and tax contributions as last manager” of company (D) S.A. The decision cited Article 4, point 4, required a certificate that all arrears had been paid or “proof of a settlement arrangement determining a repayment plan” (“transfers, payments or bank statements are not accepted”), noted that “the majority of the arrears arose during the effective management” of Monsieur (B) and stated that no new permit could be issued before payment. After an informal appeal (recours gracieux) of 20 January 2023, the Minister confirmed on 26 January 2023, adding that the deed of sale of the business (fonds de commerce) “is not relevant and in no way discharges” his responsibility (Cour administrative, 22 October 2024, no. 50470C, pp. 2–3).

According to the applicant, company (D), created in 2008 to run a restaurant, had been dormant until 2015 while up to date with its tax and social contributions, then took premises to open a nightclub. Monsieur (B) became managing director (administrateur-délégué) and holder of the trade permit; he resigned on 1 June 2018, the ministry acknowledged his resignation by letter of 11 July 2018, and on 4 July 2018 the business was sold to company (J) s.à r.l., through which one of the other directors acquired it and which undertook to take over company (D)’s debts, “including those owed to the State”. Company (D) was declared bankrupt on 20 March 2019. Monsieur (B) said he learned of the bankruptcy by chance and never received information from the trustee (pp. 3–5).

The Tribunal administratif

Company (A) argued that the Minister had added a condition not provided for by the Law, since Article 6 does not make integrity depend on the debts of a former company, and disputed each debt: the CCSS debt had been taken over by the buyer of the business, the AED debt rested on an ex officio assessment for 2015 although accounts and explanations had been filed, and there had been a VAT credit of €8,000 on the day of the bankruptcy, while the ACD debt of €1,464.90 had been settled by an agreement with the Ettelbruck tax collection office, confirmed by its letter of 26 October 2022, and paid in two transfers of €750 on 16 November 2022 and €714.90 on 2 December 2022 (Tribunal administratif, 18 April 2024, no. 48858, p. 4). The government delegate maintained that Monsieur (B) had remained director until 14 February 2019 and that the AED and CCSS claims had existed since 2015 (p. 5).

The Tribunal held that Article 4 sets four cumulative conditions and that compliance with tax and social obligations in point 4 and integrity in point 1 are “distinct requirements” (p. 7). Drawing on the commentary to bill no. 6158, it held that Article 4, point 4 allows the Minister to make a new permit conditional on prior payment of debts accumulated by the manager personally or through a company he runs or ran, “independently of the question of a possible challenge to the professional integrity of the person concerned”; the argument that the Minister had added a condition not in the Law failed (p. 8).

On the facts, the State had produced no evidence for the date of 14 February 2019, whereas the file contained Monsieur (B)’s letter of 1 June 2018 transmitting his resignation as managing director and the ministry’s acknowledgment of 11 July 2018. He had therefore been manager from 2015 to 1 June 2018, and debts falling due after that date could not be attributed to him (p. 8). But an AED letter of 28 October 2022 showed a VAT debit balance of €50,497.57, constant since 2018, so that most of it arose during his term; and a CCSS letter of 2 January 2023 showed a debt of €8,818.83, of which €5,460.09 had already accrued by the end of May 2018. Regardless of the ACD amount and its settlement, he did not “a priori” meet Article 4, point 4 (p. 9). He could not claim ignorance: he was the managing director, and the permits stated that they were valid “only if the company is effectively managed by” him. The sale contract bound only its parties, and in any event listed debts to the ACD and the CCSS but not to the AED (p. 9). The action was dismissed with costs.

The Cour administrative

The appeal of 21 May 2024 repeated the first-instance arguments; the government delegate added that Monsieur (B)’s resignation had been published in the RCS only on 14 February 2019. In its judgment of 22 October 2024 (no. 50470C), decided on the written submissions, the Court confirmed the lack of jurisdiction to reform and applied Articles 3 and 4 “in their version applicable at the time” and Article 6 “in its version applicable to the dispute” (pp. 5–6). It quoted the commentary to bill no. 6158 at length, including the passage on the Minister’s former dilemma:

On the one hand, he could not make the issue of the new business permit conditional on payment of the debts generated by the manager in the abandoned company. On the other hand, the situation in the case was often not enough to decide that the former manager’s professional integrity was affected.

The commentary also explains that if public creditors raise reservations, issue of the permit is suspended until all debts are paid, whereas if they agree despite the debts, for example by reference to an amicable arrangement, the permit may be issued; and that the article concerns refusal or revocation for debts to public creditors, not integrity (pp. 7–8). From this the Court drew its central holding:

… in principle, on the basis of Article 4, point 4, of the Law of 2 September 2011, the Minister may, outside any considerations of professional integrity, make the issue of a business permit to a natural person conditional on the prior payment of the public debts of the company that he manages or has managed, or on a settlement arrangement determining a detailed repayment plan with the public creditors concerned.

On the cut-off date, the Court accepted that a director’s resignation is generally effective against third parties only from its publication in the RCS, but held that this was not so here: the ministry had acknowledged the resignation as of 1 June 2018, and the debts were all owed to State administrations (CCSS, AED, ACD) to which the ministry “should normally have passed on the information”. In the absence of other evidence, Monsieur (B) could not be held responsible for public debts of company (D) after 1 June 2018 (pp. 8–9). The ACD arrears had been settled; but the VAT debit, constant since 2018, and the CCSS debt as it stood at the end of May 2018 had arisen mostly during his term. The sale contract bound only its signatories and did not allow him to shift his obligations towards public creditors, the more so since the list of debts to be taken over named only ACD and CCSS amounts and not the AED (p. 9). Monsieur (B) had therefore evaded tax and social charges through company (D) until 1 June 2018, and the permit was rightly refused “as long as the debts in question have not been paid”. The appeal was dismissed and company (A) ordered to pay the costs of the appeal (pp. 9–10).

Bankruptcy debts and the front person: company (AA) SARL and Monsieur (A)

The facts

Pseudonyms are assigned decision by decision, so Monsieur (A) and Monsieur (B) in this case have nothing to do with the persons given the same letters above. Company (AA) SARL held four business permits issued on 3 October 2016 that relied on Monsieur (A). He had also been one of the directors of company (BB) SA (formerly (BA) SA), which was declared bankrupt by a judgment of 6 August 2021. According to the applicant, the ACD and the AED filed claims with the trustee on 9 and 16 September 2021: the ACD for wage tax for 2020 and 2021, a penalty payment and Chamber of Commerce contributions, the AED for amounts for 2019 to 2021 that it had partly estimated on a flat-rate basis; for lack of assets, neither claim was verified by the trustee or the supervising judge (Tribunal administratif, 15 September 2025, no. 49587, p. 4).

On 21 January 2022 the Minister wrote that Monsieur (A)’s integrity was “compromised” because the bankruptcy was characterised by debts to the AED and the ACD, but that he would reconsider it under “Articles 4.4 and 6(3) and (4)” if, within one month, Monsieur (A) produced a certificate of payment or proof of a settlement arrangement; otherwise he would revoke the permits. After counsel’s letters of 28 January and 4 February 2022, the Minister replied on 7 February 2022 that Monsieur (A) had never notified the ministry of his resignation from company (BB) or of a transfer of shares, so that in the ministry’s system he had been manager of company (BB) until the bankruptcy, and gave a further month. Counsel answered by letters of 17 February and 21 March 2022 and an email of 30 March 2022. On 1 August 2023 the Minister revoked the four permits under Articles 28(3) and 6, stating that the letter of 7 February 2022 “remained unanswered” and that Monsieur (A) therefore did not wish to take “this last chance” (pp. 2–4).

The grounds

Company (AA) sued on 19 October 2023. It explained that all the shares in company (BB) had been sold on 30 April 2019 to Monsieur (B), that Monsieur (A) had resigned as director with immediate effect on the same date, that the general meeting had granted discharge to the outgoing directors and appointed Monsieur (B) sole director, and that all of this had been published in the RCS on 10 May 2019. The accounts at 30 September 2018 and AED account extracts of 9 October 2018 showed no tax debts; company (BB) had no employees before the sale, so there was no wage tax to withhold; and the claims related exclusively to the period after the sale (pp. 4–5). The applicant argued that the RCS publications were effective against third parties, including the ministry; that the change of director was not among the matters to be notified to the Minister within one month under Article 28(5); that under Article 28(4) it was for the new director to inform the Minister; and that Article 29, even if it applied, said neither who must inform the Minister nor what happens if the Minister is not informed (pp. 5–6). Against the State’s argument that Monsieur (A) had acted as a front person from May 2019, it argued that the burden of proof lay on the State, that he did not know Monsieur (B) personally and had no commercial relationship with him beyond the share sale, and that the sale had not been lucrative (p. 7). It also disputed that the debts were “substantial” within Article 6(4)(d) and challenged the AED claim, which rested on ex officio assessments based on earlier turnover although no VAT could have arisen after the sale (p. 7).

The Tribunal administratif

The Tribunal took the grounds in the order it saw fit. It quoted Article 4 “in its version applicable at the time the contested decision was taken”, Article 6 including point (4)(f), and Article 28(3) “in its wording applicable in this case”, and noted that for the paragraph (4) failings, including acting as a front person and the accumulation of substantial debts to public creditors in a bankruptcy, the Minister has no margin of appreciation (pp. 8–9). It recorded that the government delegate had supplemented the grounds of the decision in his reply: because Monsieur (A) had remained holder of company (BB)’s permit without notifying his resignation under Article 29, he had acted as a front person within Article 6(4)(a) until the bankruptcy (p. 9).

It was common ground that Monsieur (A) had resigned on 30 April 2019, that the resignation was published on 10 May 2019 and that he had not informed the Minister under Article 29. The Tribunal held that the resignation and its publication did not release him from the obligation to ensure the day-to-day management, because under the law of establishment that obligation fell on him not as director but as holder of the permits, the person the undertaking had designated as manager under Article 4. The manager so designated is not necessarily the legal representative; it is enough to have a genuine link as owner, partner, shareholder or employee, and the status of manager does not depend on a corporate mandate. The requirement serves to prevent the permit procedure being circumvented by persons who lack the qualification or integrity, by making the qualified person also the one who personally runs the business day to day (citing Tribunal administratif, 1 February 2018, no. 38849). It continued:

… he cannot simply resign from his corporate mandate and have his resignation published in the RCS when he wishes to be released from the obligation to ensure actually and permanently the day-to-day management of the undertaking incumbent on him as holder of the business permit; in such a case he must notify, or have notified, his departure to the Minister under Article 29 of the Law of 2 September 2011, so that the Minister is able, where appropriate, to revoke the permit in question …

Since he never did so, he remained holder of company (BB)’s permits until the bankruptcy judgment of 6 August 2021. By allowing company (BB) to keep the permits it needed, and so making his qualification and integrity available to it without ensuring its day-to-day management, he had acted as a front person within the meaning of Article 39(3) in the management of an undertaking subject to the Law (p. 10). Under Article 6(4)(a) that is a failing that affects integrity of its own force, without any margin of appreciation for the Minister. The explanations that he did not know Monsieur (B) and had no interest in lending him his qualification were, even if true, irrelevant, because they did not change the fact that he had failed to notify the Minister in time (p. 11).

Because the lack of integrity on that ground alone justified the revocation under Articles 3 and 4, the Tribunal did not examine the other grounds put forward by the State, “this examination becoming superfluous” (p. 11). It therefore did not decide whether the bankruptcy debts were attributable to Monsieur (A) or were substantial. It declined jurisdiction over reformation, dismissed the action for annulment and ordered company (AA) to pay the costs.

How the judgments fit together

Three routes, not one. The judgments distinguish three legal routes to the same result. Under the general clause, Article 6(2) and (3) in its earlier wording, the Minister has a wide margin of appreciation and the conduct need not be related to the authorised activity (2021 and 2023). Under the failings listed in Article 6(4), the Minister has no margin at all (2025, and stated in 2021 and 2023). Under Article 4, point 4, the Minister may hold back a permit until public debts are paid “outside any considerations of professional integrity” (2024). The ministerial decisions do not always choose cleanly: in the 2025 case the Minister cited “Articles 4.4 and 6(3) and (4)” and then revoked under Articles 28(3) and 6, and the Tribunal upheld the revocation on a front person ground that the State had first articulated in its reply.

No link with the activity, but relevance in the weighing. The Cour administrative twice held that the manager’s record need not relate to the authorised activity. In 2023 it also endorsed the Tribunal’s statement that the facts must be assessed “in particular in relation to the activities” applied for. The two statements are reconciled in the judgments by the gravity of the facts: human trafficking and procuring in one case, forgery, fraud and money laundering in the other, were serious enough that no link was needed. A minor conviction unconnected with the business, or one for which the criminal file shows mitigating circumstances, is not covered by these judgments.

Time. The ten-year window in Article 6(2) was applied to the date of the facts, not of the conviction, and the courts treated it as an outer limit rather than a sliding scale: facts of 2010 to 2012 still counted in 2019. The Tribunal added in 2020 that the Minister cannot be faulted for acting soon after the conviction becomes final, even when the facts are older. In 2023 the recency of the facts was one factor in favour of refusal.

What the debt condition does and does not require. The 2024 judgments limit the debt condition in two ways. Only debts that arose during the manager’s term count, and the term ended when the ministry acknowledged his resignation, even though the RCS publication came later. And the manager’s settlement of one creditor (the ACD) did not help him with the others (the AED and the CCSS). Neither court required proof of fault or knowledge beyond the manager’s position: the Tribunal treated knowledge as following from his role as managing director named on the permits. The commentary to bill no. 6158 also shows that the condition was designed to be lifted by payment or an arrangement accepted by the public creditors, and the Minister’s letters in both debt cases offered exactly that.

The ministry, not the RCS, is the relevant addressee. Read together, the 2024 and 2025 judgments make notice to the ministry decisive. In 2024 the ministry’s acknowledgment of a resignation fixed the end of the manager’s responsibility, ahead of the RCS publication. In 2025 a resignation that had been duly published in the RCS, but never notified to the Minister under Article 29, left the former director in place as permit holder, and so a front person, for more than two years until the bankruptcy. The Tribunal’s reasoning rests on the distinction between the corporate mandate and the status of designated manager under Article 4, which in the wording applied could rest on a link as owner, partner, shareholder or employee. Our current text of Article 4, point 3 instead requires a manager of a company to be entered in the RCS as an agent of the undertaking; whether that change affects the Tribunal’s analysis is not addressed in any of the judgments.

Not a penalty. The 2023 judgment classifies a refusal for lack of integrity as a preventive administrative police measure, not a sanction, so that non bis in idem does not apply; the Tribunal had added in 2022 that the Minister is not bound by the criminal court’s choice not to impose a trading ban. The Tribunal in 2020 nevertheless spoke of avoiding an automatic “administrative sanction with serious consequences”. The 2023 analysis concerned a refusal; the 2021 judgment does not discuss whether the same reasoning applies to the revocation of permits already held, although it applied the same tests.

Reasons and procedure. The 2021 and 2023 appeal judgments hold that a lack of reasons in the decision does not lead to annulment but suspends time limits for bringing proceedings, and that the State may complete the reasons in the litigation. The 2025 judgment goes a step further in practice, upholding the revocation on a ground added in the government delegate’s reply. In the same case the decision stated that the letter of 7 February 2022 had “remained unanswered”, although the judgment records that counsel responded to it by letters of 17 February and 21 March 2022 and an email of 30 March 2022; the Tribunal did not need to deal with that point.

What it means in practice

• Check the manager’s record before applying. The manager, and in the wording applied the majority shareholder and persons with significant influence, must meet the integrity condition. A conviction need not relate to the business to count, and facts up to ten years old are taken into account. Under our current Article 32quinquies, prosecutors may inform the Minister of final convictions for listed offences, including fraud, theft, breach of trust, money laundering and misuse of company assets.
• Explain, with documents. In the 2023 case neither side produced the criminal judgment and the courts worked from the criminal record extract alone. An applicant who wants the circumstances weighed needs to put the judgment and evidence of what has changed in the file at the administrative stage. In 2021 a reformed life did not outweigh offences of particular gravity.
• Clear public debts of every company you have run. A new permit can be held back under Article 4, point 4 until debts to the ACD, the AED and the CCSS from a former company are paid or covered by a repayment plan accepted by those creditors. In the 2024 case the Minister required a certificate from the creditors and stated that transfers, payments or bank statements are not accepted. Settling one creditor is not enough. Under the current Law, small arrears below the Article 7bis(1) thresholds need no payment agreement, except for withholding taxes.
• A buyer’s promise does not bind the State. A clause in a sale of the business by which the buyer takes over tax and social debts binds only the parties. It does not release the former manager from the debt condition, and both courts noted that the clause in question did not even list the VAT debt.
• Notify the Minister when you leave. Resigning as director and publishing the resignation in the RCS is not enough. Under Article 29 the Minister must be informed within one month of the manager’s departure. In 2024 the ministry’s acknowledgment of a resignation fixed the end of the manager’s responsibility for later debts; in 2025 the lack of a notification turned a former director into a front person until the bankruptcy, which cost him the permits of another company. Acting as a front person is also an offence under Article 39(3)(c).
• Look at every permit that relies on the same person. Revocation is directed at all the permits “relying on” the manager: three in the 2021 case and four in the 2025 case, where the failing arose in a different company from the one that lost its permits.
• Use the pre-decision letters. In both revocation cases the Minister first announced his intention by letter, and where debts were in issue he offered time to pay or agree a plan. Those letters are the moment to produce evidence; the courts review only legality on an action for annulment and cannot substitute their own assessment.
• Documents to keep. The resignation letter to the ministry and its acknowledgment; RCS filings; the creditors’ certificates or the signed repayment plan; correspondence with the bankruptcy trustee; the criminal judgment, not only the record extract; and copies of every letter answering the Minister, with proof of dispatch.

A different gatekeeping test, in which tax compliance and reliability govern access to an administrative status, is discussed in our review of Dutch recognised sponsors and fines.

Status

The three appeal judgments (nos. 45507C, 47858C and 50470C) confirmed the first-instance judgments in full and end those proceedings; none referred a question to the Cour constitutionnelle or the Court of Justice. For the judgment of 15 September 2025 (no. 49587), no appeal judgment is among our sources. The questions it left open, whether the bankruptcy debts of company (BB) could be attributed to Monsieur (A) and whether they were substantial within Article 6(4), were not decided.

The Law has changed since the ministerial decisions in these cases, all of which predate the consolidation applicable from 1 September 2023 that our translation follows. Article 4 and Article 28 are marked as amended by the Law of 26 July 2023, and the text of Article 6 now differs from the wording quoted by the courts: the general clause in paragraph (3) refers to conduct contrary to a law, a regulation or an administrative measure, paragraph (4) no longer opens “by way of derogation from paragraph (3)”, the bankruptcy-debt failing in point (e) now comes with criteria for assessing the size of the debts, and the conviction failing in point (f) is reworded. The Law now also contains the thresholds in Article 7bis, the debt conditions on a change of manager in Article 28(1) and the second chance in Article 7. None of the judgments reviewed here applies those provisions, and the extent to which the case law on the earlier wording carries over remains to be seen in later decisions.

Provisions discussed

• Business Permit Law: Art. 3, Art. 4, Art. 6, Art. 28, Art. 29, Art. 39

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How to cite

Case law review by BCA EU, for information. Quotations from the judgments are our translations; only the original texts published by the courts are authoritative. Judgments checked on the official sources on 30 October 2026. This page is not legal or tax advice.