All of French Company Law: ordinary law of companies and specific regime for different types of companies

Company Law (en cours)

The following composite securities (valeurs mobilières composées) were governed by the provisions of the Commercial Code in force before the 2004 reform. Previously, they were distinguished by their issuance rules and specific regimes. Now, they still exist but with common issuance rules and a common regime.

1) Bonds with stock warrants (OBSA)

Share warrants give the right to subscribe to shares …

Composite securities

The following composite securities (valeurs mobilières composées) were governed by the provisions of the Commercial Code in force before the 2004 reform. Previously, they were distinguished by their issuance rules and specific regimes. Now, they still exist but with common issuance rules and a common regime.

Share warrants give the right to subscribe to shares to be issued by the company at one or more prices and under the conditions and timeframes set by the issuance contract.

It is the extraordinary general meeting, based on the report of the board of directors or the executive board, as the case may be, and on the special report of the statutory auditors, that authorizes the issuance of bonds with one or more stock warrants . A request for annulment of the issuance of bonds with stock warrants can only target all the rights that the single security encompasses at the time of this issuance, even if subsequently, the stock warrants attached to the OBSA can be transferred or traded independently of the bonds themselves .

The issuance of bonds convertible into shares allows bondholders to convert their bonds into shares. Consequently, they become shareholders. The right to subscribe to convertible bonds belongs to shareholders under the conditions provided for the subscription of new shares . Furthermore, it is the extraordinary general meeting, based on the report of the board of directors or the executive board, as the case may be, and on the special report of the statutory auditors regarding the proposed conversion bases, that authorizes the issuance of bonds convertible into shares . To determine the normal sale price of shares and share subscription warrants referred to in a sales promise, it is necessary to simulate an exit from the private equity operation, as if 100% of the company's securities were sold to value in the same way all those giving access to its capital .

Convertible bonds issued by a professional partnership limited by shares of retail pharmacists do not constitute shares until they have been converted. Therefore, before this conversion, they do not need to be considered when assessing compliance with the condition that more than half of the capital of these companies must be held by the pharmacist who owns the pharmacy operated by this company, as they do not grant their holder ownership of a corresponding fraction of the capital .

OEA are bonds that can be exchanged for shares already issued and held by third parties or for shares created during a simultaneous increase in share capital . Only companies whose shares are admitted to trading on a regulated market can issue bonds exchangeable for shares .

The 2004 legislator allowed issuers to create different categories of marketable securities giving access to capital or entitling holders to the allocation of debt securities. Among these are bonds convertible into shares with warrants (OCBSA), bonds convertible into and/or exchangeable for new or existing shares (OCEANE), bonds redeemable in shares (ORA) , bonds with warrants (OBSO), stand-alone warrants (BSA) , shares with warrants (ABSA) , or warrants for business creator shares (BSPCE) . All compound securities are now governed by the new regime of securities giving access to capital or entitling holders to the allocation of debt securities.

Commercial Code, former Art. L. 225-150, para. 1.

Cass. com., 15 July 1992, LawLex202200011506JBJ.

CA Paris, 7 February 2019, LawLex202200011607JBJ, holding that shares with warrants constitute marketable securities giving access to corporate capital, the consideration for which is fully recorded in capital accounts, with the amount received by the issuing company being in the nature of an additional contribution.

CGI, Art. 163 bis G, II, para. 1: “Joint stock companies may allocate warrants for business creator shares, which are non-transferable and issued under the conditions provided for in Articles L. 228-91 and L. 228-92 of the Commercial Code, to their salaried staff members, their executives subject to the tax regime for employees, and the members of their board of directors, supervisory board, or, in the case of simplified joint-stock companies, any equivalent statutory body."

Commercial Code, former Art. L. 225-161, para. 1.

Cass. com., 11 May 2017, LawLex202200007236JBJ.

Cass. com., 18 September 2024, LawLex202400006515JBJ.

Commercial Code, former Art. L. 225-169, para. 1.

Cons. d'Et., 3 December 2018, LawLex202200011612JBJ, specifying that the fact, for the administrative judge, of analyzing as an abuse of rights, the simultaneous execution of an exceptional dividend distribution and an issuance of ORA subscribed by the beneficiary of this distribution, insofar as they would have no other purpose than to deduct financial charges, does not infringe on the freedom of undertakings in choosing their financing methods.

Cons. d'Et., 21 November 2016, LawLex202200011512JBJ, considering that stand-alone warrants do not grant their holders any rights in the capital of the issuing company in the absence of exercise of the option with which they are associated.

Company Law (en cours)

126. Composite securities

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

126. Composite securities

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise