FRANCE Law and Practice Contributed by: Jean-Christophe Devouge and Kaïs Boussadia, Aurès
company’s internal regulation. As far as share - holders are concerned, this set of rules, mainly driven by applicable laws of the French Com - mercial Code, states their specific rights within the company. For instance, their right to vote, their right to receive dividends or their right to information about business and management matters. In SAS, the importance of the by-laws is even more significant since the relationship between the company and its shareholders mainly relies on them, the SAS corporate form being little regulated by law provisions. Public disclosure of shareholder information var - ies depending on the type of company. While SARL are required to disclose shareholder allo - cations in their by-laws, which can be accessed through public platforms, sociétés par actions – such as SAS and SA – do not have a public reg - ister of shareholders. Instead, share ownership is recorded internally in share transfer registries maintained by the company. However, for listed companies, the situation differs significantly. Shareholders exceeding certain thresholds must disclose their holdings to both the company and the French Financial Markets Authority (AMF), which then makes this information publicly avail - able. 5.2 Role of Shareholders in Company Management Shareholders’ Involvement As a general principle, shareholders are not meant to be in charge of the day-to-day man - agement of the company, which is delegated to the corporate officers. That being said, shareholders are entitled to have an important role in the making of certain decisions – ie, all matters attributed to the gen -
eral meeting by law and the by-laws. For exam - ple, the approval of the annual accounts, the appointment and removal of corporate officers and statutory auditors, the amendment of the by-laws or the dissolution of the company. Besides this “typical” involvement, sharehold- ers now play a more important role as they are increasingly solicited on the management of the company’s activity and administration. For example, shareholders are now consulted on the remuneration of executives (say-on-pay) and can also be consulted on the company’s action and influence on climate issues (say-on-climate). No Interference in the Exercise of Executive Functions Shareholders are not meant to have a direct role in the everyday management of the company, this being reserved to the executive officers who have broad powers to represent the company towards third parties. Therefore, shareholders must refrain from interfering in the executive officer’s area of responsibility, otherwise courts may consider such behaviour as a de facto exer - cise of executive functions and consider the shareholder as a de facto officer ( dirigeant de fait ) accountable like any legal officer ( dirigeant de droit ). At least once a year, within six months of the end of the financial year, an annual ordinary general meeting of shareholders must be convened in order to vote on the annual accounts and con - solidated accounts, the distribution of dividends and, in listed companies, the compensation of the board members and the executive offic - ers (please refer to 1.3 Corporate Governance Requirements for Companies with Publicly Traded Shares ). 5.3 Shareholder Meetings Ordinary General Meetings
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