FRANCE Law and Practice Contributed by: Sophie Vermeille, Vermeille & Co
2.13 Holding Through a Nominee In France, shareholders’ rights to receive information and to vote are formally the same whether they hold their shares directly (in registered form) or through a nominee ( au porteur via a financial intermediary). Beneficial owners holding through intermediaries are entitled to receive the same meeting materials and disclosures, subject to the intermediary’s legal obliga- tion to forward them. In practice, while the law guarantees equal rights, operational frictions remain: the reliance on interme- diaries, combined with GDPR restrictions on direct access to shareholder contact details, means that activists and institutional investors holding through nominees must generally use the company’s official communication channels to reach other shareholders. The main structural distinction lies in loyalty shares (double voting rights): under French law, these accrue automatically to shareholders who have held their shares in registered form ( nominatif pur or nominatif administré ) for at least two years, unless the compa- ny’s by-laws expressly opt out. Shares held in bearer form ( au porteur ), which is the standard form used by foreign investors through custodians, do not qualify. This asymmetry can significantly reduce long-term foreign investors’ relative voting power compared to controlling shareholders, including the French State in strategic companies. 2.14 Written Resolutions In SAs, French law does not permit written resolutions: shareholder decisions must be taken at a duly con- vened general meeting, whether ordinary or extraordi- nary. This rule is considered a matter of public policy and cannot be waived in the articles of association. In SAS, by contrast, the French Commercial Code provides broad contractual flexibility. The articles of association may freely determine whether shareholder decisions can be adopted by written resolutions, by unanimous consent, or through other forms of consul- tation (including electronic consultation), rather than convening a physical meeting. That said, the law imposes a mandatory core of mat- ters that must always be decided collectively in a for-
mal shareholders’ meeting, irrespective of what the by-laws provide. These include approval of the annual accounts, allocation of profits, capital increases or reductions, mergers and demergers, transformation into another legal form, and dissolution. In practice, shareholders’ agreements often supple- ment the statutory and by-law rules, for example by granting veto rights to particular categories of inves- tors or by defining specific procedures for strategic decisions. 3. Share Issues, Share Transfers and Disclosure of Shareholders’ Interests 3.1 Share Issues In French sociétés par actions (including SA and SAS), statutory pre-emption rights ( droit préférentiel de sou- scription ) are a matter of public policy. They cannot be waived in advance nor excluded by the company’s articles of association. These rights may only be set aside on a case-by-case basis, through a resolution of the shareholders’ meet- ing. Individual shareholders remain free to waive their own rights in relation to a specific issuance. A 2024 Cour de cassation ruling confirmed that these statutory rules also apply to SAS, thereby rejecting earlier case law that had suggested broader contrac- tual flexibility. In listed companies, the suppression of pre-emption rights requires prior authorisation by an EGM. In prac- tice, the shareholders’ meeting generally delegates this authority to the board of directors (or manage- ment board), which may then decide, on a case-by- case basis, whether to carry out an issuance with or without pre-emptive rights. Such delegations are subject to strict statutory limits – most commonly, issuances without pre-emptive rights cannot exceed 30% of the share capital for public offerings over a 12-month rolling period.
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