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

Company Law (en cours)

Even though the transformation of a company does not require any specific formal conditions, the Commercial Code imposes certain obligations on the company intending to transform.
Indeed, regarding the transformation of joint stock companies, Article L. 225-244 provides that the decision must be based on a report from the company's statutory auditor, certifying that the shareholders' equity is at  …

Publicity and enforceability

Even though the transformation of a company does not require any specific formal conditions, the Commercial Code imposes certain obligations on the company intending to transform.

Indeed, regarding the transformation of joint stock companies, Article L. 225-244 provides that the decision must be based on a report from the company's statutory auditor, certifying that the shareholders' equity is at least equal to the corporate capital. The formality of the report is imperative: a SA intending to transform into a SARL cannot rely on ignorance of its legal obligation to have its accounts audited to support a request for exemption from producing the report required by Article L. 225-244 .

Regarding the transformations of any other corporate form into a SA and all scenarios of transforming a SARL into another corporate form, Articles L. 224-3 and L. 223-43 provide for the preparation of two reports: the first on the situation of shareholders' equity in relation to the corporate capital; the second on the value of the assets that make up the corporate assets and special benefits. When these companies already have a statutory auditor, they can appoint them as the transformation auditor. In this case, they may prepare a single report for both matters. If, however, these companies do not have a statutory auditor, the appointment of a transformation auditor is mandatory . It is this auditor who prepares the report on shareholders' equity, in addition to the one on the evaluation of assets and benefits.

The requirement for these various reports aims to provide shareholders, who are called upon to assess the advisability of the transformation, with a clear picture of the company's financial health and its ability to meet its various commitments, as well as the consistency of its assets. Consequently, the invalidity of the transformation of an SARL into an SA must be declared when the minutes of the extraordinary general meeting only mention the prior reading of the auditor's report and not an express approval of the report on the value of the assets comprising the corporate assets and on the special benefits .

According to the Court of Cassation, only the report concerning the value of the assets and specific benefits is subject, in accordance with Article R. 123-105 of the Commercial Code, to filing with the registry at least eight days before the date of the general meeting called to decide on the company's restructuring operation . Such a requirement is not necessary for the auditor's report containing only information on the relationship between shareholders' equity and corporate capital . However, this report must be made available to the partners at the registered office at least fifteen days before the date of the meeting .

Finally, the decision to transform is subject, like all other statutory modifications, to the usual publicity measures such as the insertion of the decision in a legal announcements journal of the registered office's location and the filing at the registry of the commercial court of the following documents : a copy of the minutes of the meeting that pronounces the transformation, a copy of the one that designates the new corporate bodies, as well as a copy of the auditor's report when it exists; the insertion in the BODACC, at the diligence of the registrar... The transformation of the company is enforceable against third parties only after these formalities have been completed . In fact, only the publication of the transformation of an SCI into an SARL in the BODACC makes the operation immediately enforceable against third parties, unless the parties have provided, in addition to the publicity formalities, additional conditions of enforceability, such as personal notification .

CA Aix-en-Provence, 18 November 2010, LawLex202300002249JBJ.

Paris, 8 February 2002, LawLex202300002250JBJ, specifying that the obligation to appoint a transformation auditor, pursuant to Article L. 224-3 of the Commercial Code as amended by the law of 15 May 2001, applies on the date of the meeting deciding on the transformation of an SARL into an SAS and not on the date of the shareholders' convocation for this purpose.

Cass. com., 19 June 2024, LawLex202400004568JBJ.

Min. Resp. No 30656: JOAN 25 March 2014, p. 2852, D. Nachury.

Cass. com., 8 April 2008, LawLex202200009380JBJ, D. 2008, 1200, note LIENHARD; Banque et dr. 7-8/2008, 46, note RIASSETTO; BJS 2009, 21, note MICHEL-CORDIER and VAMPARYS; Dr. sociétés 2008, No 130, note HOVASSE; Dr. et proc. 2008, 288, note GIBIRILA; RJDA 2008, No 817, holding that the transformation of an SA into an SAS indeed requires a report from the statutory auditor certifying that the shareholders' equity is at least equal to the share capital, but it does not need to be filed with the registry of the commercial court at least eight days before the date of the general meeting called to decide on the company's restructuring operation.

CNCC information note, “Statutory auditors and the transformation of companies,” July 2018.

CE, 1 June 1988, LawLex202200009395JBJ, holding that the administration cannot, in the absence of filing with the registry of the decision to transform a SA into a SARL, rely on the tax consequences of this measure if it does not establish its reality by other means, such as the production of the minutes of the general meeting that decided on this transformation.

See, however, Cass. com., 2 December 2020, LawLex202200009499JBJ, considering that the transformation of an absorbing company, initially constituted as an SAS, into an SA, is enforceable against the shareholder of the absorbed company, even if the minutes of the general meeting of the absorbing company were filed after the one-month period prescribed by Article R. 123-105 of the Commercial Code, as long as the shareholder could not have been unaware of the new corporate form indicated in the merger agreement and in the notice of the merger project published, as well as in the first resolution submitted to the shareholders of the absorbed company during an extraordinary general meeting, and in various documents sent to them by registered letter.

Cass. com., 1 October 1996, LawLex202200007519JBJ, considering that the regular publication of the transformation of an SNC into an SARL is not sufficient to make the operation enforceable against the lease-financer if they have not been informed in accordance with the contractual stipulations.

Company Law (en cours)

211. Publicity and enforceability

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211. Publicity and enforceability

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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