Public limit company

A Public limit company (S.A.) is the legal shape of business firm in various countries.

Public limit company (S.A.) in France

The public limit company is defined in the Commercial law in the chapter V, title second.

A S.A. is a company whose main features are the following ones:

associates, or shareholders, are responsible only within the limit for their contributions,
it is made up of at least 7 shareholders,
the authorized capital must be completely subscribed.
the minimum capital is of 37.000 euros or 225.000 euros if SA makes a public call to the saving .
the variability of the capital is not possible without amending.
one or more auditors are appointed to control countable management of it,
the shareholders can yield their titles freely in theory (or actions ).

The public limit company was officially regulated for the first time in the commercial law of 1807, which came only to recognize the former practice rather little still attends, of companies only made up of nonresponsible shareholders. It is this same practice which has creates all the bodies of SA (general meetings, board of directors, concept of quorum, concept of qualified majority simple, nature of the assemblies, board of trustees, auditors). It is a law of May 1863 which finally comes to regulate and recognize by là-même these innovations of the regular commercial practices, in particular the exgigence of a minimal number of 7 associated. While taking again these provisions, the law of 1867 comes to release SA which, up to that point, were to obtain the authorization of the Council of State to exist (the law of 1863 had released only SA with the capital lower than 20 franc million), contrary to the limited partnerships with share capitals whose constitution was free. The law of 1867 will allow finally the notable rise of SA up to that point representing only one negligible portion of the number of the companies created in France. The need for the authorization of the Council of State was justified by the fear expressed by the mileiu of businesses and the public authorities, to see constituting great anonymous entities likely to put danger the saving of the public by a not controlled speculation. Its statute was founded in France in 1867 to make it possible to the savers to invest their capital without risking more than their setting and its operation must logically respect a certain formalism.

The separation of the personal capital of the investor of that invested in S.A. is a guarantee against " the law of the héritiers" (monopoly), i.e. will to prevent that only the heirs are not the owners of companies sources of creation of richnesses.

There exist 2 types of SA:

of the traditional type with a board of directors,
with a directory and a Board of trustees,

(Following the installation of the Law of Financial Safety, this deliberative body must constitute a committee of audit)

The second type, inspired of the German model, clearly separates the operational functions from the strategic functions of the direction. (In German Vorstand = Directory/Aufsichtsrat = Board of trustees)

The benefit of SA are subjected to the corporation tax. SA are brought to pour a dividend with their shareholders if necessary.

A action is a title of associated which represents part of the capital of the company. Its face value (given with the creation of the company) is different from its actual value which is determined by the last exchanges which took place, either Private, or on a stockmarket.

The constitution of SA

The law of July 24th, 1966 envisages 2 modes of constitution that with public call to the saving and that without public call to the épargne.

Basic conditions

the assent :

Negative image, exempts vice assent. The defects of the assent cannot involve the nullity of the company.

the capacity :

The shareholders do not acquire the quality of commerçant.
A minor émancipé can subscribe of the actions; it is the same for a minor not émancipé but the subscription must be done via a tutor, or of an administrator légal.
The major protected can souscrire.
For a foreigner, insofar as the quality of tradesman is not required, it did not require a chart of commerçant.
there To be Shareholder, no prohibition nor incompatibility are to be noted. A moral person can be actionnaire.

the object:

The Objet must be possible and licite.
Certain activities are prohibited with SA like the real estate companies of management reserved for the limited liability companies, as well as the pharmacies reserved for the SNC or SARL.
Other activities are reserved for SA: real estate company of investment, investment company in values mobilières.
Lastly, certain regulated activities require certain clauses in the statutes like the certified public accountants, the councils juridiques.

the number of shareholders :

The minimum number shareholders is of 7; there is no maximum. If the number becomes lower than 7:
there is no nullity even at the time of the constitution but action in regularization and action in damage and intérêts.
at the time of the social life, the President of the Bankruptcy court can at the request of any interested party to pronounce dissolution after the deadline of 1 an.

Authorized capital :

The Authorized capital must be of at least 225000€ if the company publicly makes call with the saving or of 37000€ at least in the case contraire.
For certain regulated activities, the necessary capital can be higher or lower than these limites.
The capital must be published in the Statut S and must appear in all the acts and documents emanating of the company and intended for the thirds.

the contributions :

It can be a question only of Apport S in kind or in cash. The contributions in industry are prohibited. The capital must be completely souscrit.
The cash subscriptions are released at the time of the subscription of half of their face value. The paid sums are versed to the founder; with load for him to give them under the 8 days to an agent. The funds will remain in the agent until the Immatriculation.
In the event of contributions in kind, the President of the Bankruptcy court indicates a Commissaire with the contributions charged to evaluate the goods apportés.
The value of the action S is freely fixed by the statutes. The actions cannot be emitted before the registration of the company to RCS.

Participation in the turnover :

This participation is not obligatorily proportional to the contributions. But the contribution of each shareholder to the losses cannot exceed its share in the authorized capital.

the duration:

The duration cannot exceed 99 years. This duration runs as from the Immatriculation. However, the duration can be extended to make perdurer the company.

Conditions of form and publicity

SA without public call to the saving

Project of statutes :

these projects of statutes establish by the founders are not obligatory in SA without public call to the saving. But they exist in the practice to justify the deposit of funds of the actionnaires.

Formation of the capital : A minimum capital of 37000 euros is obligatory with the formation of the company, moreover it must have a minimum of 7 associated.

- Formalities with respect to the administration
Prior approval of the ministry for Économie
Declaration preliminary to the ministry for Économie

The following stage is the registration with the Company and Trade register (RCS) follow-up of a publicity in the newspaper of legal advertisements (JAL) and BODACC.
In the event of non-observance of the rules of formality there are civil sanctions towards the founders in the event of damage caused with the thirds or the shareholders because of the cancellation of the company. But there can be also penal sanctions for the founders for issue of shares irrégulières.

- the contributions
The cash subscriptions must be released from half at least their face value. The remainder is released as from the registration within 5 year. The funds are versed at a notary, a bank, or with the Deposit and consignment office in the 8 following days the reception of the sums; a certificate is issued by the agent (one of the founders). Moreover a list of the subscribers is drawn up

Concerning the contributions in kind, there exist often provisions in the statutes (in particular on their description and their evaluation). One or more Commissaire with the contributions is named by decision of the courts on the request for one of the founders. He draws up a report/ratio on the evaluation of the contributions, report/ratio placed at the disposal of the shareholders before the date of signature of the statutes.

- Signature of the statutes
It is the most important stage: starting from the signature, the company is considered made up but the personality exists as from the registration. From now on the engagement of the shareholders is définitif.
The statutes must be written under private signature or by notarial act (known as also act authenticates, obligatory if there is a contribution of the real type). Must be mentioned there obligatorily: the face value of the actions, various classes of share, clauses of approval, identity and evaluation of the contributions in kind, identity of the recipients of particular advantages, the composition, operation, capacities of the bodies of management, identity of the first administrators and the first auditors. In appendix, one includes there the report/ratio of the police chief to the contributions, the state of the acts achieved on behalf of the company in formation.
The statutes must be signed by all the shareholders or agents acting within sight of special capacities.

SA with public call to the saving

A minimum capital of 225000 euros is obligatory. And a minimum number of associated shareholders of 7.
The contributions in industry are prohibited, being difficult to evaluate they were isolated. The recording of the company is made same manner as SA without public call to the saving. But of the preliminary rules must be respected:
The project of statute must be deposited at the clerk's office of the qualified bankruptcy court according to the seat of future the société
Then the presentation of the project intervenes which must be published in the BALO.
And finally the sending with the Authority of Financial markets (MFA) of a note of information describing the creation project which will be diffused with the publics.

The management of SA

Since the law of July 24th, 1966, there is the choice between 2 structures: the traditional structure (a chairman, a board of directors, general meetings) and the structure with allemande (a directory, a board of trustees, general meetings).

The traditional system of SA

The board of directors

SA is managed by a collegial body called Board of directors, represented by its president. The board of directors is at least made up of three and to the maximum of eighteen administrator S chosen among the Actionnaire S.

The administrator S

Within the Board of directors, they are 3 at least and 18 with the maximum.
To be appointed administrator of SA, it is necessary to hold a certain number of actions of the company statutairement.
With the creation of the company, the first administrators are named in the statutes. During the social life, they are it by the General meeting ordinaire.
The natural persons or representatives of moral persons who agree to be administrators are named by the shareholders following of the precise methods and by respecting certain formalities of publicité.
The quality of civil servant is incompatible with that of administrator (Council Decision of State of December 15th, 2000). The term of the office of administrator is fixed in the Statut S. Cependant, it cannot be higher than three years for the administrators named in the statutes at the time of the constitution. It is six years in all the other cases. However, the administrators are rééligibles.
In theory, a natural person cannot be an administrator in more than five boards of directors (or Board of trustees).
Except contrary mention in the statutes, the administrators of more than 70 years cannot represent any more of the third of the administrators in fonction.

The administrators can receive from another remuneration only the Attendance fees. Thus, an administrator cannot cumulate his function with a Work contract.

For more details: Board of directors

The operation of the Board of directors

The Board of directors is convened by the president. There is an assembly minimum in the année.
2 delegated Work's council are convened consultativement.
The council deliberates validly only if the half of administrators are present. Except contrary clause of the Statute S, the decisions are caught in the majority of the attending members.

The chairman of the board

It is the Board of directors which indicates it among one as of his. It must be necessarily a natural person who did not reach the 65 years age (except contrary provision of the Statut S).
It is indicated for the time of its mandate and can be re-eligible. Like the administrators, it can resign and is revocable AD nutum provided that is not carried out within the framework of an abuse droit.

The chairman is not Commerçant but has the paces of them. He is not either an employee but he will have on the social plan and tax the same advantages as the employees. Within the framework of its functions, it perceives a remuneration made up of fixed and/or a profit-sharing, advantages in kind, Attendance fees.
No law prohibits the office plurality of the functions of chairman with a work contract. Admittedly restrictive conditions are necessary: in particular an effective work and a subordination connection (difficult for a company whose chairman holds 80% of the actions). To also note that the chairman of the board can be a person different from the managing director.

Managing directors

The head office of the company is assumed either by the chairman of the board, or by another natural person named by the council of administration.
The managing director is a natural person chosen or not among the members of the Board of directors charged to assist the chairman. It is not necessary that he is shareholder. He has vocation to represent the company with regard to the tiers.

He is named on a proposal from the chairman by the Board of directors. The maximum number managing directors is fixed in the statutes but cannot exceed 5. Its capacities are fixed by the Board of directors in agreement with the chairman. He can have the same capacities which the chairman but remains to him subordinate.

The new structure

The directory

See Directory (undertaken)

The board of trustees

The action and the shareholder

Rights and duties of the shareholders

Classification of the actions

Subscription and inscription of the actions

to see Preferential duty of subscription

SA in Switzerland

The public limit company is that which is formed under a company name, whose share capitals given in advance, is divided into actions, and whose debts are guaranteed only by the assets of the company.

The Swiss public limit company (in German, AG for has ktien' g' esellschaft) differs slightly from its French equivalent. The legislative base of SA is in the Code of the obligations Swiss, Article 620 and S

the public limit company is a moral person, subject of rights and obligations, which only answers on its inheritance of the debts of the company
the shareholders and the participants jointly answer neither, nor subsidiarily of social engagements
the shareholders are responsible for the transmitting company only up to the value of their financial contribution (face value of the action)
It does not exist that only one type of SA
the foundation of SA requires three shareholders at least (a bill aiming at making legal the creation of SA to only one shareholder must be born soon)
the share capitals is in advance given like the actions of which it is composed
Its share capitals cannot be lower than 100.000 francs
the actions can be of two types:

personal: the owners of registered shares must inform the transmitting company when they wish to separate some. SA holds a list of these shareholders.
with the carrier: the bearer share can be exchanged without referring about it to the transmitting company

SA in Belgium

The public limit company is a company in which at least two shareholders are been willing to invest capital in the company. In Belgium S.A. is especially selected like forms company by the large companies. It is also chosen by SME (small and medium-size companies) insofar as the titles of these companies can be with the carrier (but one speaks to remove this kind of title) and that they are transferable. The personality of the shareholder does not play any paramount role in opposition to the partnership like the SNC, SPRL. In theory, it has one unlimited lifespan except contrary clause.

Characteristics:

the capital of a minimum amount of 61.500€ must be entirely subscribed and released to the amount of 1/4 with minimum 61.500 €
the number of administrator must be fixed at least 3 and their mandate cannot exceed 6 years but is renewable.
as it is a moral person distinct thus from the clean inheritance of those (responsibility for the associates limited to their contribution), obligation of a Financial plan (440 C.com), in the event of cash subscription opening of an account in the name of the company and in the event of contribution in kind, required of a report/ratio of a reviser of company (444 Ccom)
deposit of the authentic deed of partnership (because made in front of notary) to the clerk's office and publication with the Belgian Monitor
inscription at the clerk's office of the bankruptcy court in the register of the people morales*pour those which have an inscription marketing activity at the bank crossroads of the Companies

Various types of public limit companies

the SAOS: public limit company with sporting object
the EUSRL: sporting unipersonal company with limited responsibility
the SASP: professional sporting public limit company.

See too

Random links: