A public limited company is a company whose capital is divided into shares and which is formed among members who shall bear any losses only up to the amount of their contributions. The public limited company shall be designated by its business name, in which may be incorporated the names of one or more members.

General principles

Shareholders : The public limited company must be formed of a minimum of seven shareholders. Law does not prescribe any maximum. Shareholders may be natural persons or legal entities, French or foreign citizens. They are not deemed to be traders.
A minor, represented by a legal representative (his father or mother), may be shareholder in a company.

The company's capital : The capital must be fully subscribed. The registered capital must be at least 37,000 euros.
The simplified joint-stock company may not ask for public offering, but its capital may be variable.

Shares : Shares representing contributions in cash must be paid in respect of at least fifty percent paid of their face value. The balance may be paid in one or more payments within a deadline which may not exceed five years with effect from registration of the company in the register of commerce and companies (“RCS ”). On the other hand, shares representing the contributions in kind must be paid in full at the time of their issue. The memorandum and articles of association may indicate the shares’ face value.

Contributions : All shareholders must make a contribution to the company. These contributions, which total makes up the company’s capital, may be made in cash or in kind. Contributions in the form of services are prohibited. The appointment of an auditor is mandatory in case of contributions in kind and the valuation of these contributions must be indicated in the memorandum and articles of association.

The legal entity's duration : The company’s term may not exceed 99 years. Its runs from its registration at the register of commerce and companies (“RCS”) and may be extended upon decision of the shareholders.

Annual accounts : The public limited company must file its annual accounts with the registry (“RCS”)a month maximum after their approval in a general meeting. This general meeting shall be held within a period of six months after the end of the financial year.
However, a request for time extension for holding of the general meeting ruling on the annual accounts may be made by sending a petition to the president of the Commercial Court.

In case of disapproval of the annual accounts, the minutes or an excerpt of the minutes of non-approval must be deposited at the registry (“RCS”).

Organisation

Direction : the public limited company might be directed by a board of directors (classical system) or directed by an executive board that exercises its functions under the control of a supervisory board (dualist system). The memorandum and articles of association must mention the mode of direction that will be adopted.

Classical system : Board of directors (“CA”)

Board of directors : It must be formed of a minimum of 3 directors and a maximum of 18. In the event of a merger, this maximum might be brought to 24 for a period of three years from the date of the merger.
Each director must own such number of shares in the company as is determined by the memorandum and articles of association. If, on the day of their appointment, a member does not own the requisite number of shares, they shall be deemed to have resigned their post, unless they shall have remedied the said situation within a period of three months. The first directors shall be appointed in the memorandum and articles of association for a term of office of three years. A legal entity appointed as a director must designate, within the board of directors, a natural person as its permanent representative.

- Missions and powers of the board of directors :
The board of directors determines the broad lines of the company’s business activities and ensures their implementation. Without prejudice to the powers expressly invested in meetings of the shareholders, and in so far as the memorandum and articles of association permit, it deals with all matters relating to the conduct of the company’s business and decides all pertinent issues through its deliberations. It shall carry out the inspections and verifications which it considers appropriate.
The board of directors can deliberate validly only if at least one half of its members are present and the decisions shall be taken on a simple majority of the members present or represented. The memorandum and articles of association may stipulate a larger majority.
The board of directors shall appoint a chairman who must be a natural person. The chairman shall be appointed for a term which may not exceed his term of office as a director.

- Missions of the chairman of the board of directors :
The chairman represents the board of directors. He organizes and oversees its work and reports to the general meeting thereon; sees to it that the company’s management structures function well and ensures, in particular, that the directors are able to accomplish their task.

General management of the company : selection between the chairman of the board of directors and the general manager
The general management of the company shall be assumed either by the chairman of the board of directors or by another natural person appointed as a general manager. The board of directors shall choose between theTwo forms of performance of the general management in accordance with the conditions defined by its memorandum and articles of association.
The chairman of the board of directors shall represent the company in relation to third parties only if he is also assuming the general management.
The general manager shall be appointed by the board of directors. He may or may not be a director. There cannot be more than one general manager. On proposal of the general manager, the board of directors may appoint one or more natural persons charged with assisting the general manager, with the title of assistant general manager. The board of directors may not appoint more than five assistant general managers.

- Powers of the general manager : the general manager shall be invested with the most extended powers to act on behalf of the company in all circumstances. In its dealings with third parties, the company shall be legally represented by the general manager.

- Power of the assistant general manager : his powers and duration mission are fixed by the board of directors. In its dealings with third parties, his power is the same as the general manager.

Dualist system : executive board and supervisory board

In this system, the management of the company is ensured by the executive board under the supervision of the supervisory board.

Executive board : The executive board must be formed of a maximum of five members. In public limited companies with a share capital of less than 150,000 euros, the functions conferred on the executive board may be exercised by a single person bearing the title of “sole managing director”.
Members of the executive board are appointed by the supervisory board. They must be natural persons and may or may not be shareholders.
One of the members of the executive board shall be appointed as the chairman of the executive board.

- Powers of the executive board :
The executive board shall have the widest powers to act on behalf of the company in any circumstances. It shall exercise its said powers within the limits of the company’s purpose and subject to the powers expressly attributed to the supervisory board and shareholders’ meetings.

- Chairman of the executive board :
He represents the company in dealings with third parties.
The supervisory board may appoint one or more members of the executive board as managing directors with the same power of representation than the chairman of the executive board.

Supervisory board : The supervisory board must be formed of a minimum of three members and a maximum of eighteen. In the event of a merger, this maximum might be brought toTwenty-four for a period of three years from the date of the merger.
A legal entity appointed as a member of the supervisory board must appoint a permanent representative (natural person).
The first members of the supervisory board shall be appointed in the memorandum and articles of association. Every member of the supervisory board must own such number of shares in the company as is determined by the memorandum and articles of association. If, on the day of their appointment, a member of the supervisory board does not own the requisite number of shares, they shall be deemed to have resigned their post, unless they shall have remedied the said situation within a period of three months.
A person may not at once be a member of the supervisory board and a member of the executive board.
The supervisory board shall appoint a chairman and a deputy chairman who must be natural persons. They shall be responsible for calling meetings and conducting its discussions.

Auditor : The appointment ofTwo auditors (natural persons or legal entities), one as incumbent and the other as deputy, is mandatory. The first auditors shall be appointed in the memorandum and articles of association.

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