FRANCE LAW AND PRACTICE Contributed by: Michael Doumet, François-Xavier Naime, Guillaume Nataf, Léna Sersiron, Eléonore d’Anthonay, Nella Picou, Pauline Celeyron and Magalie Dansac Le Clerc, Baker McKenzie Paris
des Entreprises de France , or MEDEF) (the “AFEP/ MEDEF Code”). The most common corporate form for limited liability companies in France is the simplified stock corpora - tion ( société par actions simplifiée , or SAS), which is known for its flexibility. Small businesses often use the limited liability partnership ( société à responsa- bilité limitée , or SARL). Public companies are usually incorporated as public limited companies ( sociétés anonymes , or SAs), with either a one-tier (ie, board of directors and CEO) or a two-tier (ie, supervisory board and management board) structure. 4.2 Relationship Between Companies and Minority Investors French law and regulations grant several rights and remedies to minority shareholders, particularly in list - ed companies, as follows. • Right to information – before any annual sharehold - ers’ meeting, shareholders may consult the report of the executive corporate body, the standalone and consolidated financial statements (if any), the report of the statutory auditors on the financial statements, the report of the statutory auditors on the related party transactions, and the draft resolu - tions. • Right to ask written questions – prior to the share - holders’ meeting, shareholders may submit written questions to the management for additional infor - mation on specific matters. Shareholders, if holding a certain number of shares, can also propose draft resolutions to be included in the agenda. • Right to vote at any shareholders’ meeting – share - holders are entitled to vote on the approval of the annual accounts, the appointment and removal of the directors, the approval of the related party transactions and, in public companies, the remu - neration of the corporate officers (directors and CEO) through ordinary shareholders’ meetings that approve resolutions subject to simple majority vote of the shares present or represented. Share - holders are also entitled to vote on amendments to the by-laws and on capital increases, mergers, and demergers through extraordinary sharehold - ers’ meetings that approve resolutions subject to
a two-thirds majority vote of the shares present or represented. • Right to distribution – once the annual accounts are approved and if the ordinary shareholders’ meeting has approved the distribution of the annual profit (if any), the shareholders are entitled to receive a portion of the annual profit in the form of dividends pro rata their percentage of the share capital (unless the by-laws provide otherwise). 4.3 Disclosure and Reporting Obligations French law and regulations provide that any person – acting alone or in concert – whose ownership of outstanding shares or voting rights in an issuer listed on Euronext Paris crosses upwards or downwards the threshold of 5%, 10%, 15%, 20%, 25%, 30%, 33⅓%, 50%, 66⅔%, 90% or 95% of the total number of shares and voting rights of a public company must notify both the public company and the AMF, specify - ing the number of shares it holds and the number of corresponding voting rights. The AMF publishes dis - closures on its website, making them publicly acces - sible. An issuer may also impose more stringent notification requirements in its by-laws for holdings of less than 5%, in increments as small as 0.5%. In practice, the by-laws of many French issuers impose disclosure requirements set at small increments, generally from 0.5% to 2% of the capital or voting rights. These threshold crossing disclosure requirements apply in addition to those mentioned in 3.2 Regula- tion of Domestic M&A Transactions . Where FDI regulations apply, a mandatory request for clearance must be filed by the foreign investor with the French FDI authorities and must include compre - hensive information and documentation regarding the following: • the foreign investor and its group, its management, shareholders, activities, markets, competitors and links with foreign states; • the French target company or business, its activi - ties, products and services, markets, competitors, employees, customers, involvement in EU projects and programmes, and IP rights; and
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