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

Company Law (en cours)

The nominal value of a share corresponds to the portion of the capital represented by the share. In a company whose share capital amounts to EUR 1,000,000, divided into 100 shares, the nominal value of the share is thus EUR 10,000.

Any company may freely set the nominal value of its shares . Before the law of 2 July 1998 , the mention of the nominal value of shares was mandatory in the articles o …

Principle

The nominal value of a share corresponds to the portion of the capital represented by the share. In a company whose share capital amounts to EUR 1,000,000, divided into 100 shares, the nominal value of the share is thus EUR 10,000.

Any company may freely set the nominal value of its shares . Before the law of 2 July 1998 , the mention of the nominal value of shares was mandatory in the articles of association. To facilitate the conversion of companies' share capital into euros, this law, codified in the Monetary and Financial Code, removed, in its Article 17, I, the obligation for joint stock companies to mention in their articles of association the nominal amount of shares or share denominations. Consequently, there may exist since then shares without nominal value.

The nominal amount of shares or share denominations may, if the partners choose, be set by the articles of association . In this case, the latter must include, for each category of shares issued, the number of shares and the nature of the specific rights attached to them and, as the case may be, the portion of share capital it represents or the nominal value of the shares that comprise it . Furthermore, the option must apply to all share issuances .

Furthermore, when an issuance of new shares or securities giving access to capital is likely to result in a capital increase, shareholders must be informed of the issuance and its terms through a notice that must include the nominal value of the shares or securities giving access to capital to be subscribed in cash, whether or not this value is stated in the statutes, and, if applicable, the amount of the issue premium . Similarly, in the case of a company formation with a public offering other than those mentioned in 1° or 2° of Article L. 411-2 of the Monetary and Financial Code or Article L. 411-2-1 of the same code, the notice that must be published in the Bulletin of Mandatory Legal Announcements before the start of subscription operations and prior to any publicity measure must indicate the nominal value of the shares to be issued, whether or not it is stated in the statutes, with a distinction made between each category, as well as the special rights attached to preference shares .

Article L. 228-29-1 of the Commercial Code authorizes share consolidations for securities with a nominal value less than or equal to EUR 3.81 not admitted to trading on a regulated market notwithstanding any contrary legislative or statutory provision . Share consolidations allow companies to reduce the number of shares with relatively low values in circulation and thereby reduce the costs associated with their management. Share consolidations require shareholders to make the necessary purchases or sales of shares to complete the consolidation . The nominal value of consolidated shares cannot exceed EUR 15.25 . To facilitate operations, the company must, before the general meeting's decision, obtain from one or more shareholders the commitment to provide, for a period of two years, at the price set by the meeting, the counterpart both for purchase and sale of offers concerning odd lots or requests to complete the number of securities belonging to each of the interested shareholders .

The notion of nominal value of shares is distinct from that of market value and liquidation value. The market value of a share corresponds to its value on a financial market. The notion only refers to shares admitted to trading on a regulated market or on a multilateral trading system. The liquidation value corresponds to the mathematical value, after deduction of expenses that would occur in the event of liquidation (taxes, social charges, liquidator's remuneration etc.).

Commercial Code, Art. L. 228-8. - See, for an application, Cass. 1re civ., 22 September 2021, LawLex202200011500JBJ, the statutes of a Selas may provide that the transfer of shares of departing associates will be determined at their nominal value and not their real value.

Law No 98-546 of 2 July 1998 on various economic and financial provisions (known as DDOEF), Art. 17, I, OJ of 3 July 1998.

Commercial Code, Art. L. 228-29-1 and R. 228-27, para. 1.

Commercial Code, Art. L. 228-29-2, para. 1.

Commercial Code, Art. L. 228-29-2, para. 2 and R. 228-27, para. 2.

Company Law (en cours)

92. Principle

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92. Principle

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Les notions juridiques connexes

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