FRANCE Law and Practice Contributed by: Bertrand Barrier, Anne Toupenay-Schueller and Cyril Deniaud, Jeantet
5.4 Timing and Tax Authority Ruling Corporate reorganisations including spin-offs have different levels of legal constraints and imply different timings. Consequently, the timing of such a transac- tion depends primarily on the preparation of legal and tax documentation, as well as the completion of the various necessary legal and tax steps and formalities. From a legal standpoint, it may be necessary, for example, to consult the works council before com- mitting to the transaction, which can cause a delay of one to two months. Other formalities, such as the filing of legal documentation with the commercial court and its validation by such court, are in practice subject to longer delays of three, to up to five months. Regarding tax rulings, since January 2018, cross-bor- der spin-offs involving a complete and autonomous branch of activity are automatically eligible for the favourable tax regime, without requiring prior approval from the French tax authorities. However, when the transferred assets do not represent a complete line of business, an advance ruling from the French tax authorities is still required. When a tax ruling is requested, the French tax authori- ties must respond within six months of submission. If no formal answer is received within six months, the transaction is deemed valid, and the favourable tax regime can no longer be challenged. 6. Acquisitions of Public (Exchange- Listed) Technology Companies 6.1 Stakebuilding Stakebuilding before making an offer is customary in specific situations, particularly when aligned with strategic goals that are well documented and commu- nicated to regulatory bodies, if necessary. It is advis- able for companies to seek legal advice to navigate through the complexities of Market Abuse Regulation (MAR) and ensure their stakebuilding strategies com- ply with all the relevant legal and regulatory standards.
Reporting Obligations Notification of threshold crossing
Reporting obligations may be triggered as a result of stakebuilding. In France, individuals or entities acting independently or in concert must disclose their hold- ings in any company listed on the regulated market of Euronext Paris: (i) to the company; and (ii) to the AMF, within four trading days of crossing certain thresholds of share capital or voting rights. These thresholds are set at 5%, 10%, 15%, 20%, 25%, 30%, one third, 50%, two thirds, 90% and 95%. The disclosure must include details such as the number of shares and vot- ing rights held. The AMF will subsequently make this information public. To determine whether a threshold has been crossed, specific rules for calculation and aggregation apply. These include: • adding shares and voting rights held by entities acting in concert or controlled by the disclosing party; • including shares and voting rights that the disclos- ing party or its concert parties may acquire at their discretion through financial instruments or agree- ments; • taking into account the underlying instruments or agreements of shares and voting rights that pro- vide economic exposure similar to direct share- holding, whether settled physically or in cash; and • taking into account shares and voting rights held by any party with whom the disclosing entity has entered into a temporary sale agreement. Failure to comply with these disclosure requirements will result in the automatic suspension of voting rights for shares exceeding the relevant threshold until prop- er disclosures are made. In addition, voting rights may remain suspended for two years following compliance with this disclosure requirement. Other penalties may be imposed based on the specific circumstances of non-compliance. Notification of intent In addition to the notification of threshold crossing, when an investor or group of investors crosses the 10%, 15%, 20% and/or 25% threshold(s) upwards in the share capital or voting rights of any company
129 CHAMBERS.COM
Powered by FlippingBook