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

Company Law (en cours)

Real estate investment trusts (SCPI) are collective investment schemes that take the form of unlisted companies, governed by Articles L. 214-86 to L. 214-118 and R. 214-130 to R. 214-160 of the Monetary and Financial Code. Their corporate purpose is the acquisition and management of rental real estate assets through the issuance of shares to the public. In accordance with Article L. 214-86, para. 2, of the same code, they are authorized to make a public offering of their shares, even if not reserved for their partners, a limited circle of investors, or qualified investors. The management of SCPI is carried out by a portfolio management company, pursuant to Article L. 214-98, para. 1, of the same code, which must have obtained approval from the AMF. The management company invests in properties whose rents are distributed to investors in proportion to their participation in the share capital. Consequently, investors acquire shares in a real estate portfolio, which, under Article L. 211-14 of the Monetary and Financial Code, are not negotiable. The Court of Cassation concludes that SCPI shares do not constitute marketable securities subject to seizure according to the procedures provided by Article R. 232-3 of the Code of Civil Enforcement Procedures .

SCPI have specific characteristics that justify several exemptions from the common rules applicable to civil companies, particularly regarding their formation, control bodies, and the rights and obligations of partners. The founders are required to subscribe and fully pay up the entire share capital, with a minimum amount of EUR 760,000, before any public offering other than an offer reserved for a limited circle of investors or qualified investors. Furthermore, the share capital must be divided into shares with a nominal value of at least EUR 150, in accordance with Articles L. 214-87 and L. 214-88 of the Monetary and Financial Code. Additionally, to ensure the stability of their commitment to savers, Article L. 214-86, paras. 3 and 4, of the same code, provides for the inalienability of shares held by the founders for three years from the issuance of the AMF visa. A supervisory board responsible for assisting the management company must be appointed by the ordinary general meeting, pursuant to Article L. 214-99 of the Monetary and Financial Code. Moreover, the portfolio management company is obliged to appoint a statutory auditor . The AMF is responsible for ensuring the regularity of operations carried out on financial instruments and ensures compliance with the professional obligations of SCPI and their management companies, in accordance with Article L. 621-9, I and II, of the same code. Finally, Article L. 214-89 of the Monetary and Financial Code limits the liability of partners to twice the fraction of the share capital they hold, but the statutes may establish liability limited to the share held in the share capital.

Cass. 2e civ., 8 December 2022, LawLex202200011480JBJ, JCP G 2023, No 201, obs. BARBIERI.

679. Real estate investment in the form of shares