New Law Requires Changes in French Corporate Business

Extract

---

New Law Requires Changes in French Corporate Business

By Noro-Lanto Ravisy, Thibault Delorme, Arnaud Bélisaire, Anne-Sophie Hebras & Philippe Reigné, Doctor in French law, legal consultant.

New law on economic regulations

French law no. 2001-420 of May 15, 2001 (the NRE law) is composed of three principle sections:

financial transactions;

competition; and

companies.

This article provides a brief overview of the main impact of this law on corporate practices.

Many provisions of company law are directly based on rules of corporate governance. The new regulations seek to ensure increased transparency within joint-stock companies (sociétés par actions) by improving the balance of power between the management entities. For French corporations (sociétés anonymes), this legislation increases the number of constraints and applicable mandatory provisions. It will undoubtedly lead to many companies now choosing the legal form of simplified joint-stock company (société par actions simplifiée).

This objective of increased transparency has led, in particular, to:

a redefinition of the organization of power within companies with a Board of Directors;

new limitations on the number of concurrent corporate offices that may be held by a corporate officer in all sociétés anonyme...

See the full content of this document

---