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

Company Law (en cours)

The reduction of capital, whether or not motivated by losses, must be authorized or decided by the extraordinary general meeting, which may delegate to the board of directors or the management board, as the case may be, all powers to carry it out . In no case may it affect the equality of shareholders. A report prepared by the statutory auditors, if any, on the proposed operation must be communica …

Terms.

The reduction of capital, whether or not motivated by losses, must be authorized or decided by the extraordinary general meeting, which may delegate to the board of directors or the management board, as the case may be, all powers to carry it out . In no case may it affect the equality of shareholders. A report prepared by the statutory auditors, if any, on the proposed operation must be communicated to the company's shareholders at least fifteen days before the general meeting . The meeting decides based on the auditors' report, which provides their assessment of the causes and conditions of the reduction. These provisions are not prescribed under penalty of nullity .

Frequently, the reduction of capital is associated with a subsequent increase. The operation, referred to as a "accordion maneuver," allows the company to erase losses and replenish its funds by providing liquidity. It is not excluded that dissatisfied shareholders may contest the operation. Nevertheless, the courts view the operation favorably, even if the reduction of capital to zero results in the cancellation of all corresponding shares and the exclusion of shareholders who did not subscribe to the subsequent capital increase, when it aims to avoid the dissolution of the company while the net assets have become significantly less than half of the share capital .

When the assembly approves a project for capital reduction not motivated by losses, the representative of the body of bondholders and creditors whose claims predate the filing date of the minutes of deliberation with the registry may oppose the reduction within twenty days from the date of this filing . A court decision rejects the opposition or orders either the repayment of the claims or the provision of guarantees if the company offers them and they are deemed sufficient. The capital reduction operations cannot begin during the opposition period nor, if applicable, before a first-instance ruling on this opposition. If the trial court upholds the opposition, the capital reduction procedure is immediately halted until sufficient guarantees are provided or until the claims are repaid. If the court rejects it, the reduction operations may begin.

Cass. com., 15 March 2017, LawLex202200005592JBJ.

Cass. com., 17 May 1994, LawLex202200008805JBJ.

Company Law (en cours)

487. Terms.

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

487. Terms.

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise