The Bill on business growth and transformation and the Bill for the modernization of business transfers are important items on the Minister of Economy and Finance’s end-of-year agenda. While one Bill is promoted by the government and the other by the Parliament, both aim at simplifying the internal operation of companies.
This article focuses on two measures intended to remedy the shortcoming of previously implemented schemes that have been sometimes contested.
Expanding internationally is most of the time critical for businesses wishing to break into other markets. However, international expansion is not without posing a number of risks, in particular legal and financial ones, that need to be identified and addressed upstream when designing the overall expansion strategy.
While the choice of the most appropriate legal structure or export business model is essential, companies must also keep in mind other legal considerations. This article is a follow-up to the conference on “Successfully establishing a presence abroad: The legal and financial basics” organized by our Firm together with Banque Rhône-Alpes on May 31, 2018.
In the wake of the wave of modernization and transparency of the French economic life triggered by the so-called “Sapin II” Law, in particular as regards the financing of the economy, Ordinance n°2017-1432 of October 4, 2017 reshapes the legal framework for asset management and debt financing.
The objective is to respond to businesses’ needs for a more diverse set of funding sources, while ensuring investor protection.
In the wake of the large-scale program launched in France in 2013 to simplify the regulatory framework applicable to businesses, Decree n°2017-932 of May 10, 2017 introducing various simplification measures for businesses has streamlined the formalities that foreign companies must carry out to invest in France.
This simplification must not, however, mask the French government’s intention to maintain an effective screening of foreign investments in so-called sensitive sectors deemed crucial to France’s national interests in terms of public order, public security and national defense.
Ordinance n°2017-748 of May 4, 2017 adopted in furtherance of the so-called “Sapin II” Law on transparency, fight against corruption and modernization of the economy, adds a new element to the concept of Security Agent in the context of syndicated loans, thereby offering banks and other institutions an efficient and secure device comparable to what is known, in particular in Anglo-Saxon countries, as the “Security Trustee”.
This widely welcomed reform should contribute to improve the competitiveness of the French finance industry with respect to syndicated financing.
Countdown to Brexit started on March 29, 2017, date on which Theresa May officially notified the Chair of the European Council of the United Kingdom's intention to leave the EU. This notification launches two years of tough negotiations at the end of which the United Kingdom and the European Union must agree on the terms and conditions of UK’s withdrawal, unless this timeline is extended by unanimous agreement from all EU Member States.
The timetable for negotiations coincides with the entry into force in 2019 of a series of financial rules, one of the most important in the banking and financial sector being the Directive on markets in financial instruments, known as the MiFID Directive. The implementation of this Directive is essential to allow banks and investment firms to operate within the European Union.
In a decision dated January 31, 2017, the Commercial Chamber of the Cour de Cassation (French Supreme Court) held that “unless otherwise agreed upon between the parties, the first demand guarantee, that does not follow the guaranteed obligation, is not transferred in case of a split-up”.
This position has already triggered many comments and conflicting views. It deserves special attention given that, in particular, first demand guarantees are an essential issue for businesses and supposed to ensure legal certainty for their beneficiaries.
In a decision dated November 29, 2016, the Commercial Chamber of the Cour de Cassation (French Supreme Court) further specified the conditions for the implementation of Article L.631-1§1 of the French Commercial Code that addresses the rules according to which credit reserves or moratoria granted to a debtor company should be taken into account in the assessment of said debtor company’s possible state of cessation of payments.
This decision provides the opportunity to recall applicable rules and to stress that particular attention should be paid, in particular within corporate groups, to advances made to financially distressed group entities.
Adopted by the French Parliament on November 8, 2016, the Law on transparency, the fight against corruption and the modernization of the economy, commonly referred to as the “Sapin II Law” (the “Law”) “is intended [according to the French Government], more than 20 years after the Law no. 93- 122 of January 29, 1993 on the prevention of corruption and the transparency of business life and public procedures, to support further progress with regard to transparency and modernization of business life and the relationships between economic players and public decision-makers”.
This article focuses on measures that impact French corporate law.
Law n°2011-103 of January 27, 2011 on balanced representation of men and women on boards of directors and supervisory boards and on gender equality in the workplace, also known as the “Copé-Zimmermann” Law, provides for the phased introduction of a greater gender diversity in boards of directors of large French companies.
The last stage of implementation of this Law will start on January 1, 2017. This provides an opportunity to make a status report on this legislation that has already inspired many other countries.
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