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

Company Law (en cours)

The transformation of a company involves adopting a new corporate structure without the loss of its legal personality. The transformation of a joint stock company may occur due to the numerous constraints imposed on this type of company. While such an operation is governed by the general rules applicable to the transformation of all corporate forms, it also follows specific rules.
In fact, Article …

Change of corporate form

The transformation of a company involves adopting a new corporate structure without the loss of its legal personality. The transformation of a joint stock company may occur due to the numerous constraints imposed on this type of company. While such an operation is governed by the general rules applicable to the transformation of all corporate forms, it also follows specific rules.

In fact, Article L. 225-243 of the Commercial Code provides that any joint stock company may transform into a company of another form if, at the time of transformation, it has been in existence for at least two years and has prepared and had approved by the shareholders the balance sheet of its first two financial years. Article L. 225-244 also requires that the decision to transform be made based on the report of the company's statutory auditors, if any. This report certifies 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 . Similarly, the transformation is subject, if applicable, to the approval of the bondholders' meetings and the meeting of holders of beneficiary shares or founder's shares.

These conditions are not required, however, when the company is transformed into a general partnership . Indeed, Article L. 225-245, para. 1, only requires the unanimous agreement of all partners. Similarly, the transformation into a limited partnership or partnership limited by shares is decided under the conditions provided for the amendment of the articles of association and with the agreement of all partners who agree to be general partners. The usufructuary of shares who votes for the transformation of a public limited company into a partnership limited by shares does not commit an abuse of enjoyment as long as such a transformation does not "degrade" the asset on which the usufruct is based, in the absence of proof of the less advantageous nature of this choice of corporate form .

Furthermore, the transformation into a limited liability company must be decided under the conditions provided for the amendment of the articles of association of companies of this form. Case law specifies that no provision requires the full release of share capital before the transformation of a public limited company into a limited liability company .

Article L. 225-244 subjects the transformation of the joint stock company, like all other amendments to the statutes, to the completion of publicity measures.

The transformation of a SA into a company of another form entails the consequences attached to any transformation. Indeed, the powers of the chairman of the board of directors of a SA cannot continue after its transformation into a SNC . Jurisprudence finally considers that the legal advisor who serves as the statutory auditor of a public limited company and participates in its transformation into a limited liability company incurs liability if they know that the operation is carried out based on false declarations by the shareholders, in fraud of the rights of one of them .

Cass. com., 8 April 2008, LawLex202200009380JBJ, D. 2008, 1200, obs. LIENHARD; Banque et dr. 7-8/2008, 46, obs. RIASSETTO; BJS 2009, 21, obs. MICHEL-CORDIER et VAMPARYS; Dr. sociétés 2008, No 130, obs. HOVASSE; Dr. et proc. 2008, 288, obs. GIBIRILA; RJDA 2008, No 817.

Cass. com., 3 December 2002, LawLex202200009393JBJ, holding that a credit institution cannot be accused of failing in its duty to advise by agreeing, without reservation, to the legal arrangement that involves transforming a joint stock company into a general partnership to allow it to guarantee the commitments made by the borrowers and thus escape the prohibition of prohibited agreements, as long as the applicants are the beneficiaries of the operation.

CA Douai, 13 February 2013, LawLex202300005161JBJ.

CA Paris, 13 October 2009, LawLex202300011979JBJ.

Cass. crim., 3 January 1986, LawLex202200008962JBJ.

Cass. com., 8 December 1975, LawLex202300007952JBJ.

Company Law (en cours)

519. Change of corporate form

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Les décisions de justice citées dans ce paragraphe :

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519. Change of corporate form

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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