FRANCE Law and Practice Contributed by: Sophie Vermeille, Vermeille & Co
In listed companies, French case law has added a judicial “necessity” requirement, under which share- holders must demonstrate a legitimate and pressing reason, such as evidence of governance malfunction; a mere disagreement with management’s strategic direction is insufficient. In the Lagardere case, the court has even refused requests to convene a meeting by shareholders holding more than 40% of the voting rights, considering that the AGM already provides a forum for shareholder oversight. Given the restrictive case law, it is often strategically preferable to wait until the next AGM to challenge management or launch a proxy fight. Attempting to force an early meeting exposes shareholders to a high risk of judicial rejection, even with significant share- holding levels. 2.4 Information and Documents Relating to the Meeting Notice of General Meetings All shareholders are entitled to receive notice of a gen- eral meeting. • Unlisted companies: notice must be sent directly to shareholders in accordance with the articles of association. • Listed companies: (a) shareholders whose shares are recorded in registered form ( nominatif pur or nominatif administré ) receive a direct convening notice; and (b) all other shareholders, including the vast majority of foreign institutional investors – who almost never register their shares in nominatif form – are legally deemed to have been notified through the publication of a notice in the BALO. Information Rights Under French law, shareholders’ information rights can be understood at three distinct levels. • Statutory minimum for SAs and SAS: limited to access to annual accounts, management and statutory auditors’ reports, and general meeting documents (agenda, draft resolutions, supporting explanations, and information on board nominees).
• Contractual enhancement (unlisted companies): in SAS and other private companies, shareholder agreements often grant broader information rights (eg, periodic financial reports, access to budgets, inspection rights). • Regulatory enhancement (listed companies): in listed SAs, shareholders benefit from a compre- hensive disclosure regime under the French Com- mercial Code, the Monetary and Financial Code and the General Regulation of the French Financial Markets Authority (AMF). Shareholders’ Right to Inspection In SAs, shareholders benefit from statutory rights of access to certain documents. Before each general meeting, they may obtain the annual accounts, man- agement and statutory auditors’ reports, the text and explanatory notes of draft resolutions, and information relating to board nominees. They are also entitled to receive the list of shareholders notified (within the 15 days preceding the meeting) and to obtain copies of the minutes and attendance sheets for the past three years. For activists, however, these rights have important limitations. They do not grant access to the complete register of beneficial owners with their contact details. The French Commercial Code deliberately restricts the scope of inspection rights, and the GDPR further prevents disclosure of personal data such as names and contact details of shareholders. Unlike certain EU member states that have implemented the Sharehold- ers’ Rights Directive to allow greater transparency for proxy solicitation, France has not made use of this option, preferring to prioritise data protection. This structural constraint means that proxy contests in France are conducted primarily through the offi- cial meeting process and public debate, rather than through direct shareholder solicitation. Activists must carefully time their initiatives and leverage disclosure obligations to place their proposals before the general meeting. Minority Shareholders’ Expert Investigation (Expertise de gestion) Shareholders holding at least 5% of the share capi- tal may petition the court to appoint an independent
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