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08 December 2014
Crowdfunding, which allows businesses to raise finance from the public through internet platforms, has developed rapidly in France since the emergence of the first platforms in 2007. The government recently introduced legislation to regulate the activity and protect investors. Presidential Order 2014-559 and Ministerial Decree 2014-1053, which came into effect on October 1 2014, provide a framework for equity crowdfunding through the issuing of equity securities (titres de capital) and debt instruments (titres de créance). Among other things, the new legislation affects simplified joint stock companies (sociétés par actions simplifiées) – a type of company that is commonly used by small and medium-sized enterprises and start-ups, which now have recourse to crowdfunding.
If a simplified joint stock company offers securities to the public through crowdfunding, it must now comply with a number of rules that apply to public limited companies (sociétés anonymes). The changes are designed to give shareholders better information and more say over the company's affairs.
Proceedings of shareholder meetings
The order applies Articles L225-96 to L225-98, Article L225-105(3) and Articles L225-122 to 225-125 of the Commercial Code to simplified joint stock companies that have recourse to crowdfunding. Accordingly:
Convening shareholder meetings and shareholder information
The decree provides that the rules on convening shareholders for shareholder meetings, as set out in Articles R225-66 to R225-70 of the Commercial Code, now also apply to simplified joint stock companies.
The meeting notice containing set information must be published in a legal notice gazette. However, shareholders with registered shares must be convened for meetings by post or by electronic means.
Shareholders must be given at least 15 days' notice of a meeting or 10 days' notice of a second meeting (if there is no quorum at the first meeting).
Certain items of information and documents must be made available to shareholders before the meeting. This information includes:
For further information on this topic please contact Rhidian David or Cyrille Gaucher at Cabinet Hughes Hubbard & Reed by telephone (+33 1 44 05 80 00), fax (+33 1 44 05 80 54) or email (firstname.lastname@example.org or email@example.com). The Cabinet Hughes Hubbard & Reed website can be accessed at www.hugheshubbard.com).
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