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

Company Law (en cours)

Pursuant to Article L. 228-91 of the Commercial Code, joint stock companies may issue securities giving access to capital or entitling the holder to the allocation of debt securities. The issuance contract may stipulate that these securities and the capital or debt securities to which they give entitlement can only be transferred and traded together. In this case, if the originally issued security …

Principle

Pursuant to Article L. 228-91 of the Commercial Code, joint stock companies may issue securities giving access to capital or entitling the holder to the allocation of debt securities. The issuance contract may stipulate that these securities and the capital or debt securities to which they give entitlement can only be transferred and traded together. In this case, if the originally issued security is a capital security, it does not fall under a specific category within the meaning of Article L. 225-99 of the Commercial Code. Capital securities cannot be converted or transformed into securities representing a debt right. Any clause to the contrary is null and void  (deemed unwritten).

The issuance of securities giving access to capital or entitling the holder to the allocation of debt securities is authorized by the extraordinary general meeting of shareholders in accordance with Articles L. 225-129 to L. 225-129-6 relating to the increase of the share capital of joint stock companies. This meeting deliberates based on the report of the board of directors or the management board and the special report of the statutory auditor . In this case, shareholders have a preferential subscription right to these securities, proportional to the amount of their shares, which is governed by the provisions applicable to the preferential subscription right attached to equity securities in accordance with Articles L. 225-132 to L. 225-141 . Furthermore, these issuances are authorized by the board of directors, the management board, or the manager(s), unless the articles of association reserve this power to the general meeting or if the latter decides to exercise it, in the case of issuing bonds or participating securities, or in other cases, under the conditions determined by the issuing company in accordance with the provisions of Article L. 228-36-A .

In accordance with Article L. 228-97 of the Commercial Code, when issuing securities representing a debt claim on the issuing company, including those that grant the right to subscribe to or acquire a security, it may be stipulated in the issuance contract that these will only be reimbursed after the other creditors have been satisfied, excluding or including holders of participating loans and participating securities (subordination clause of subordinated securities. However, the stipulations of the issuance contract that provide for a subordination clause extending to the payment of bond interest must be deemed unwritten .

Commercial Code, Art. L. 228-92, para. 1.

Commercial Code, Art. L. 228-92, para. 2.

Commercial Code, Art. L. 228-92, para. 3.

CA Rennes, 20 October 2020, LawLex202300006176JBJ.

Company Law (en cours)

127. Principle

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127. Principle

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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