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

Company Law (en cours)

Equity securities (titres participatifs) are financial instruments representing, like bonds, a a right of claim , which can be issued by joint stock companies belonging to the public sector, cooperative companies constituted as a public limited company or a limited liability company, public limited companies for low-rent housing mentioned in Article L. 422-2 of the Construction and Housing Code, a …

Principle

Equity securities (titres participatifs) are financial instruments representing, like bonds, a a right of claim , which can be issued by joint stock companies belonging to the public sector, cooperative companies constituted as a public limited company or a limited liability company, public limited companies for low-rent housing mentioned in Article L. 422-2 of the Construction and Housing Code, and coordination companies as defined in Article L. 423-1-1 of the same code . They are only redeemable in the event of the company's liquidation or, at its initiative, upon the expiration of a period that cannot be less than seven years and under the conditions provided for in the issuance contract .

Equity securities are negotiable. Their remuneration includes a fixed part and a variable part calculated by reference to elements related to the company's activity or results and based on the nominal value of the security .

For the application of Article 26 of Law No 78-741 of 13 July 1978 , equity securities are only reimbursed after the full satisfaction of all other secured or unsecured creditors, excluding the holders of equity securities .

Pursuant to Article L. 228-37 of the Commercial Code, the issuing and redemption of equity securities must be authorized under the conditions provided for in the fifth paragraph of Article L. 225-100 and Articles L. 228-40 to L. 228-44. Furthermore, the body must meet at least once a year to hear the report of the corporate officers on the company's situation and activity during the past fiscal year and the report of the statutory auditors on the accounts of the fiscal year and on the elements used to determine the remuneration of the equity securities. The representatives of the body attend the meetings of shareholders or unit holders . They are consulted on all matters on the agenda, except those relating to the appointment or removal of members of the corporate bodies. They may intervene at any time during the meeting. Holders of equity securities may obtain communication of corporate documents under the same conditions as shareholders. Finally, in public enterprises without a general meeting, the board of directors exercises the powers conferred on the ordinary general meeting for the issuing of equity securities.

Commercial Code, Art. L. 228-36, para. 1; CA Chambéry, 22 January 2019, LawLex202200011353JBJ, considering that the company issuing equity securities is under a legal obligation to provide information on a merger project even to a single subscriber; furthermore, the summons served to a joint stock company by the representative of the body of holders of equity securities within the absorbing company constitutes an objection to the merger, as long as, in the absence of proper information and publicity, the objection period has not begun to run.

Commercial Code, Art. L. 228-36, paras. 2 and 3.

Law No 78-741 of 13 July 1978 concerning the orientation of savings towards the financing of undertakings, OJ of 14 July 1978.

Commercial Code, Art. L. 228-36, para. 4.

CA Chambéry, 22 January 2019, LawLex202200011353JBJ, holding that no legal provision excludes the existence of a representative of the body of bondholders in the case of a single bondholder, who, in this scenario, is by right the representative of the body.

Company Law (en cours)

124. Principle

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124. Principle

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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