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. 239-1 of the Commercial Code, the statutes of a joint stock company may provide that its shares can be lent out, within the meaning of the provisions of Article 1709 of the Civil Code , to the benefit of a natural person. The lending of shares allows the natural person who wishes to acquire shares of the company to benefit from a form of trial period that would enable them t …

Regime

Pursuant to Article L. 239-1 of the Commercial Code, the statutes of a joint stock company may provide that its shares can be lent out, within the meaning of the provisions of Article 1709 of the Civil Code , to the benefit of a natural person. The lending of shares allows the natural person who wishes to acquire shares of the company to benefit from a form of trial period that would enable them to confirm their choice of a potential acquisition of the company's shares in question. A shareholder who wishes to finance a capital increase may also resort to lending the shares.

The lending of shares can only involve registered securities that are non-negotiable on a regulated market, not registered with a central depository's operations, and not subject to the retention obligation provided for in Article L. 225-197-1 of the Commercial Code or the unavailability periods provided for in Chapters II and III of Title IV of Book IV of the Labor Code.

The lease contract must be recorded by authentic deed or private agreement subject to the registration procedure . It must include the following information, as set out in Article R. 239-1: the nature, number, and identification of the shares; the duration of the contract and the notice period for termination; the amount, frequency, and, if applicable, the terms for rent revision; if the leased shares are transferable by the lessor during the contract, the terms of such transfer; the conditions for distributing the liquidation surplus, in compliance with the legal rules applicable to usufruct. In the absence of mentions regarding rent revision and the transfer of shares during the lease, the rent is deemed fixed and the shares non-transferable for the duration of the contract.

The loan agreement is made enforceable against the company in the forms provided for in Article 1690 of the Civil Code .

The delivery of shares is carried out on the date when the mention of the lease and the name of the tenant is recorded next to the shareholder's name in the register of registered shares of the joint-stock company . From this date, the company must send the tenant the information due to shareholders and provide for their participation and voting at meetings in accordance with the provisions of the second paragraph of Article L. 239-3, under which the voting right attached to the leased share belongs to the lessor in meetings that decide on statutory amendments or the change of nationality of the company, and to the tenant in other meetings. For the exercise of other rights attached to the leased shares, the lessor is considered the bare owner and the tenant the usufructuary. The legal or statutory provisions that provide for the approval of the transferee of shares apply under the same conditions to the tenant . In accordance with Article L. 239-4, the lease is renewed under the same conditions as the conclusion of the initial lease. In the event of non-renewal of the lease contract or termination, the more diligent party shall proceed with the removal of the mention recorded in the register of registered shares of the joint-stock company or in the articles of association of the limited liability company.

“The lending of things is a contract by which one of the parties undertakes to allow the other to enjoy a thing for a certain time, and for a certain price that the latter undertakes to pay.”

Company Law (en cours)

100. Regime

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Les notions juridiques connexes

100. Regime

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Les notions juridiques connexes

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