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

Company Law (en cours)

The simplified joint-stock company cannot, to attract new shareholders, make a public offer of financial securities or admit its shares to trading on a regulated market , under penalty of nullity of the contracts concluded or the securities issued . It is also prohibited, under the same penalties, from issuing negotiable securities  or making a public offer concerning the financial securities issu …

Regulation of public offers

The simplified joint-stock company cannot, to attract new shareholders, make a public offer of financial securities or admit its shares to trading on a regulated market , under penalty of nullity of the contracts concluded or the securities issued . It is also prohibited, under the same penalties, from issuing negotiable securities  or making a public offer concerning the financial securities issued by another person or entity that has not itself been authorized by law to make a public offer of its financial securities .

By way of derogation from this prohibition, a simplified joint-stock company may, in accordance with Article L. 227-2 of the Commercial Code, proceed with the following offers:

- any offer of marketable securities to directors or former or existing employees by their employer or by a related undertaking, provided that a document containing information on the number and nature of the securities as well as the reasons and terms of the offer or allocation is made available ;

- any offer of financial securities addressed exclusively to a limited circle of investors acting on their own account or to qualified investors . A qualified investor is a person defined in point e of Article 2 of the regulation of 14 June 2017 , while a limited circle of investors consists of persons, other than qualified investors, whose number is less than 150 ;

- any offer of financial securities and instruments admitted for crowdfunding purposes proposed by a crowdfunding service provider within the meaning of the regulation of 7 October 2020 , including for its activities mentioned in Article L. 547-4 of the Monetary and Financial Code, provided that it does not exceed the threshold set in Article 1, para. 2, point c, of said regulation ;

- any offer of equity securities exclusively addressed to persons or entities who are already shareholders of the issuing company of the offered equity securities ;

- any public offer where the beneficiaries acquire financial securities for a total amount of at least 100,000 euro or the equivalent of this amount in foreign currencies per investor and per distinct offer ;

- any public offer where the nominal value of each financial security is at least 100,000 euro or the equivalent amount in foreign currencies .

Formerly “public offering,” See, CMF, former Art. L. 411-1: “The public offering consists of one of the following operations: 1. The admission of a financial instrument to trading on a regulated market; 2. The issuance or sale of financial instruments to the public using either advertising, solicitation, or credit institutions or investment service providers.”

Commercial Code, Art. L. 227-2, para. 1; See, Cass. com., 13 March 2024, LawLex202400002241JBJ, specifying that the provisions applicable to joint stock companies, under which the irregularity of the procedure for verifying special benefits can only be remedied by a general meeting in which the beneficiary cannot participate, are not transposable to simplified joint-stock companies, which cannot make a public offer of financial securities.

CMF, Art. L. 411-2-1, 2° and AMF Reg., Art. 211-2, II.

CMF, Art. L. 411-2-1, 3° and AMF Reg., Art. 211-2, III.

CMF, Art. L. 411-1, para. 1. - See, for an illustration under the previous wording of the text, CA Versailles, 14 June 2022, LawLex202300007718JBJ and 16 September 2021, LawLex202300007719JBJ, holding that a public offering, prohibited in SAS, constitutes the offer to participate in a capital increase presented through credit institutions or investment service providers, to a public not proven to be limited to fewer than one hundred investors, contrary to the provisions of Articles L. 411-1 and L. 411-2 of the Monetary and Financial Code.

Regulation No 2017/1129 of 14 June 2017 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market, and repealing Directive No 2003/71/EC, Art. 1, 4°, i.

Paris, 8 December 2015, LawLex202300007720JBJ, emphasizing that while soliciting individuals to propose acquiring shares of a simplified joint-stock company is prohibited, offering them to qualified investors or a limited circle of investors is permitted.

Point (e) of Article 2 of the Regulation of 14 June 2017 specifies that qualified investors are, on the one hand, the persons or entities listed in Annex II, Section I, points 1) to 4), of Directive No 2014/65 of 15 May 2014 on markets in financial instruments and, on the other hand, the persons or entities treated at their own request as professional clients, in accordance with Section II of said annex, or who are recognized as eligible counterparties in accordance with Article 30 of Directive No 2014/65/EU, unless they have entered into an agreement to be treated as non-professional clients in accordance with Section I, fourth paragraph, of said annex.

Pursuant to Annex II, Section I, points 1) to 4) of the Directive of 15 May 2014, qualified investors are: 1) entities that are required to be authorized or regulated to operate in financial markets, including: credit institutions, investment firms, other authorized or regulated financial institutions, insurance companies, collective investment schemes and their management companies, pension funds and their management companies, persons dealing in commodities and commodity derivatives, local undertakings, other institutional investors; 2) large undertakings meeting two of the following criteria on an individual basis: a balance sheet total of EUR 20,000,000, a net turnover of EUR 40,000,000, shareholders' equity of EUR 2,000,000; 3) national and regional governments, including public bodies that manage public debt at the national or regional level, central banks, international and supranational institutions such as the World Bank, the IMF, the ECB, the EIB, and other similar international organizations; 4) other institutional investors whose main activity is to invest in financial instruments, including entities dedicated to the securitization of assets or other financing transactions.

Regulation No 2020/1503 of 7 October 2020 on European crowdfunding service providers for business, and amending Regulation No 2017/1129 and Directive No 2019/1937.

Company Law (en cours)

572. Regulation of public offers

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572. Regulation of public offers

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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