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

Company Law (en cours)

The extraordinary general meeting is solely competent, in accordance with Article L. 225-129 of the Commercial Code, to decide on a capital increase. Indeed, since the amount of capital is set in the articles of association, its increase implies a modification of these. If the operation no longer requires, as in the past, the holding of two separate meetings , once convened, the "single" extraordi …

Exclusive competence of the assembly

The extraordinary general meeting is solely competent, in accordance with Article L. 225-129 of the Commercial Code, to decide on a capital increase. Indeed, since the amount of capital is set in the articles of association, its increase implies a modification of these. If the operation no longer requires, as in the past, the holding of two separate meetings , once convened, the "single" extraordinary general meeting is required to successively vote on two resolutions:

- the first one rules on the very principle of the capital increase;

- the second deliberates on the proposal for the evaluation and remuneration of contributions, or the granting of any special benefits, under the conditions set out in Article L. 225-10 of the Commercial Code.

According to the Court of Justice, a shareholder may, without committing an abuse of rights, challenge the national measure that imposed a capital increase without the approval of the general meeting, even if this measure is likely to address the financial difficulties endangering the company and provide it with obvious economic benefits . Similarly, the national provision that authorizes the capital increase of a banking joint stock company by administrative means when it is in an exceptional situation of indebtedness is contrary to Article 25 of the Second Company Law Directive, which requires, for the protection of shareholders, a decision by the general meeting . However, once it is established that the decision to increase capital was indeed made by the extraordinary general meeting, the fact that it delegated to the board of directors the terms of its implementation, such as determining the amount of the issue premium, cannot be contested by a shareholder .

Article R. 225-113 provides that the board of directors or the executive board must include in its report all useful information on the reasons for the proposed capital increase as well as on the progress of the company's business since the beginning of the current fiscal year and, if the ordinary general meeting called to rule on the accounts has not yet been held, during the previous fiscal year. If applicable, the board of directors or the executive board must indicate the maximum amount of the capital increase. Therefore, the decision to increase capital made by the board of directors of a variable capital joint stock company is subject to invalidity if the maximum authorized capital amount is not mentioned in the articles of association, as in such a case, this type of decision must be made by the shareholders collectively under the required conditions . No provision stipulates that the finalization of a capital increase must be confirmed by a resolution of the board of directors. Consequently, the regularity of the operation is not likely to be affected by the meeting of this corporate body before the issuance of the certificate of deposit of funds .

Min. Rep. JOAN Q, 8 March 1969, 595, Rev. sociétés 1970, 169.

CJCE, 12 May 1998, LawLex200500008531JBJ, Europe 1998, No 225, obs. LAGONDET; JCP éd G 1998, I, 189, obs. BOUTARD-LABARDE; RTD com. 1998, 1000, obs. LUBY; Cah. dr. eur. 1999, 521, obs. KARAYANNIS.

CJCE, 12 March 1996, LawLex200500008534JBJ, Europe 1996, No 189 and 201, obs. LAGONDET. - See also CJCE, 12 November 1992, LawLex200800001336JBJ, considering that a national regulation cannot, in order to ensure the survival and continuation of the activity of undertakings that have particular importance from an economic and social point of view for the community and that find themselves, due to their over-indebtedness, in an exceptional situation, provide that it may be decided by administrative act to increase their corporate capital, without intervention of the general meeting; 24 March 1992, LawLex200800001335JBJ; 30 May 1991, LawLex200800001298JBJ.

Cass. com., 19 September 2006, LawLex202200011502JBJ.

Cass. com., 6 February 2007, LawLex202200006696JBJ.

CA Paris, 7 May 2019, LawLex202300002248JBJ.

Company Law (en cours)

478. Exclusive competence of the assembly

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478. Exclusive competence of the assembly

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Les décisions de justice citées dans ce paragraphe :

Sous parties

Les notions juridiques connexes

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