Introduction

Matrix organization

Mergers by absorption

Risks related to the expansion of the scope of criminal liability of legal entities

Validity conditions

Proof of delegation

Exemption from individual liability of delegator

Attribution of offense to legal entity

Delegations of authority

Criminal risk management within business organizations

Complicity in crimes against humanity

Breaches of secrecy

Personal data breaches

Theft

Extortion

Blackmail

Fraud

Misappropriation

Receiving/concealment of unlawfully obtained property (recel)

Attacks on automated data processing systems

Money laundering

Misappropriation by public official (concussion)

Corruption and influence peddling

Unlawful acquisition of an interest

Favoritism

Forgery and use of forgeries

Violation of Criminal Code

Offenses under the Monetary and Financial Code

Offenses under the Commercial Code

Environmental Code violations

Offenses arising from other codes

Types of offenses

Offenses under the Criminal Code, the Commercial Code, or the Environmental Code, Criminal procedure

White Collar Crime (en cours)

The offense of distributing fictitious dividends involves the directors of capital companies distributing fictitious dividends among shareholders, in the absence of an inventory or by means of fraudulent inventories (Art. L. 241-3, 2° Commercial Code). The Law of 17 July 1856  first criminalized this offense for partnerships limited by shares (SCAs). It was subsequently extended to public limited  …

Definition

The offense of distributing fictitious dividends involves the directors of capital companies distributing fictitious dividends among shareholders, in the absence of an inventory or by means of fraudulent inventories (Art. L. 241-3, 2° Commercial Code). The Law of 17 July 1856  first criminalized this offense for partnerships limited by shares (SCAs). It was subsequently extended to public limited companies (SA) by the law of 24 July 1867  and to limited liability companies (SARLs) by the law of 24 July 1966 . The ordinance of 18 September 2000  codified it within the Commercial Code in the current Articles L. 241-3, 2° for SARLs, L. 242-6, 1° for SAs, L. 243-1 for SCAs, L. 244-1 for simplified joint-stock companies (SAS), and L. 244-5 for European companies (SE).

The offense of distributing fictitious dividends requires defining the concept of distributable profit. By establishing a company, the shareholders, under Article 1832 of the Civil Code, aim to share the profit or benefit from the resulting savings. This profit, if it exists, is nevertheless limited as it cannot be drawn from the share capital, which is intangible  and constitutes, in companies with limited liability, the creditors' guarantee. Indeed, the distributable profit among shareholders can only be drawn from the available corporate funds, that is, from the profit of the fiscal year, reduced by previous losses and the amounts to be reserved according to the law  or the statutes, and increased by the retained earnings (Art. L. 232-11, para. 1, Commercial Code): no distribution can therefore occur when the equity is or would become, as a result, less than the amount of the share capital (Art. L. 232-11, para. 3, Commercial Code).

The general meeting may, when the distributable profit is insufficient, decide to distribute amounts taken from reserves that are not assimilated to the share capital and which it has at its disposal (Art. L. 232-11, para. 2, Commercial Code). However, dividends must be taken primarily from the distributable profit of the fiscal year. In the total absence of distributable profit or when it remains insufficient despite authorized withdrawals from available reserves, any distribution of dividends will necessarily infringe upon the principle of the inviolability of the share capital and will constitute the offense of distributing fictitious dividends. The question arose as to whether hidden reserves, which result from the undervaluation of certain company assets, could be distributed. This possibility, which had been accepted by the Court of Cassation in an old ruling , is excluded by Article L. 232-11 of the Commercial Code, which requires the general meeting to expressly indicate the reserve items from which withdrawals are made. The revaluation surplus is also not distributable and may be incorporated in whole or in part into the capital (Art. L. 232-11, para. 4, Commercial Code).

Law of 17 July 1856 concerning partnerships limited by shares (SCAs).

Art. 15 of the Law of 24 July 1867 on commercial companies.

Art. 425, 2° L. 66-537 of 24 July 1966 on commercial companies, OJ 26 July 1966.

Ordinance No 2000-912 of 18 September 2000 on the legislative part of the Commercial Code.

Except in the case of a capital reduction, no distribution may be made to shareholders when the equity is or would become as a result of such distribution less than the amount of the capital increased by the reserves that the law or the articles of association do not allow to be distributed (Art. L. 232-11, para. 3, Commercial Code).

See Article L. 232-10 of the Commercial Code, which defines the legal reserve, with the partners being required to allocate 5% of the profits as long as the reserve does not equal 10% of the share capital.

Cass. crim., 17 June 1942, Moreau, D. S. 1944, I, 144.

White Collar Crime (en cours)

205. Definition

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Les notions juridiques connexes

205. Definition

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Les notions juridiques connexes

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