All publications by Sophia El Makhoukhi

Sophia El Makhoukhi

Member of the Lyon Bar

28 December 2022

French Constitutional Council confirms that exclusion clauses included in the by-laws of French sociétés par actions simplifiées are compliant with the Constitution

Pursuant to the first paragraph of Article L. 227-16 of the French Commercial Code, “In accordance with the conditions which they so determine, the by-laws may specify that a shareholder may be required to sell the shares he/she/it holds in the company.”

The second paragraph of Article L. 227-19 of the French Commercial Code, in its version applicable since July 21, 2019, stipulates that the exclusion clauses referred to in Articles L.227-18 “can only be adopted or amended pursuant to a unanimous decision of the shareholders, in the manner and under the conditions provided for in the by-laws”.

In a recent decision issued on December 9, 2022, following four applications for a preliminary ruling on the issue of constitutionality, the Constitutional Council ruled on the conformity of these provisions with the French Constitution.

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28 October 2022

The new single register of security interests over moveable property and other related transactions will be up and running on January 1, 2023

As of January 1, 2023, the formalities for the registration, change and cancellation of liens and pledges over intangible movable property will have to be carried out in a single register called the “register of security interests over moveable property and other related transactions”.

This register was created by Decree dated December 29, 2021, with the aim of simplifying the rules governing the publication of security interests over moveable property, which until now varied according to the type of security interest concerned.

A chapter dedicated to this register has been incorporated into the French Commercial Code by the aforementioned Decree, and provides a number of clarifications.

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18 April 2022

Cross-border simplified mergers: The management bodies of the companies involved in the merger are required to prepare a written report

The Legal Committee of the Association Nationale des Sociétés par Actions (French association of joint stock companies, commonly referred to by its acronym “ANSA”) met on March 2, 2022 to express its opinion on the application, in the context of cross-border simplified mergers, of the exemption from the obligation to prepare a written report provided for in the context of domestic simplified mergers.

A brief reminder of the applicable rules in this area is necessary before presenting the issue at stake and the clarification given by ANSA.

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28 January 2022

The measures adopted to adapt the control of foreign investments in France during the health crisis are further extended until December 31, 2022

The principle under French law is that financial dealings between France and foreign countries are unrestricted.

However, some investors making certain types of investments in so-called “sensitive” business sectors must follow a prior authorization procedure with the French Minister of the Economy.

The control of foreign investments in these business sectors has been significantly reinforced in recent years, especially since the outbreak of the health crisis resulting from the emergence and spread of COVID-19.

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28 October 2021

Mismanagement by a manager who did not prompt the regularization of the shareholders’ equity: Further clarification from the French Supreme Court

The liability of the manager of a company placed in judicial liquidation is often sought on the basis of Article L. 651-2 of the French Commercial Code which allows the court, in the event of mismanagement having contributed to the company’s shortfall of assets, to decide that the amount of this shortfall shall be borne, in whole or in part, by said manager.

In a decision issued on September 8, 2021, the Cour de Cassation (French Supreme Court) has clarified the application of this Article to a manager who did not convene the shareholders to regularize the situation of the company, the shareholders’ equity of which had fallen below half of the share capital.

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30 June 2021

Recognition of the existence of a manifestly unlawful disturbance resulting from the failure to file annual accounts and statute of limitations applicable to actions based on ordinary law provisions

While many company managers fail to comply with their obligation to file annual accounts, the Cour de cassation (French Supreme Court) has decided to reinforce the applicable sanction mechanism in an unprecedented decision issued on March 3, 2021.

Recognizing for the first time the non-exclusive nature of the special provisions of the French Commercial Code allowing a third party to obtain the forced filing of a company’s annual accounts, the Cour de Cassation held that the failure to file annual accounts constituted a manifestly unlawful disturbance that justified the initiation of summary proceedings with a view to putting an end to such disturbance.

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