- The regulation n° 2020-320 adapting and simplifying the rules of meeting and of deliberation of the general meetings and governing bodies
Article 1 of the regulation refers to all legal entities governed by private law (in particular to commercial companies such as public limited liability companies (French sociétés par actions), simplified joint stock companies (French sociétés par actions simplifiée), private limited liability companies (French sociétés à responsabilité limitée) or the civil companies (sociétés civiles) but also to any groups or associations). This text, applicable to general meetings and meetings of governing bodies held from 12 March 2020 until 31 July 2020 is characterized by the 3 following measures:
Adjustment of the rules of convening and of the shareholders’ information
With respect to (listed) public limited liability companies (French sociétés par actions faisant appel public à l’épargne), article 2 of the regulation takes into consideration the difficulties arising from the convening of the shareholders by postal services and sets out that for the companies required to proceed to this convening “the fact that the convening could not be carried out by postal services due external circumstances of the company, provides no ground for the meeting’s nullity”. These circumstances cover in particular the situation where a company (or its providers) was prevented from accessing its premises or from preparing the necessary convening notices. Note, however, that this article does not refer to any other corporate forms other than the public limited liability companies. Nevertheless, article 3 which applies to all entities as covered by article 1 (so not solely to public limited liability companies, but also for instance to simplified joint stock companies or private limited liability companies) provides that the disclosure of information or of corporate documents required by a shareholder may be carried out by electronic mail. This implies, however, that the relevant shareholder indicates his/her email address in his/her request.
Adjustment of the rules of participation and of consultation
Without stating it clearly, article 4 of the regulation provides for the possibility to hold the general meetings in closed session (huis clos). Indeed, such article sets out that the meetings may be held, by virtue of a decision from the governing body (for instance the board of directors as far as the sociétés anonymes are concerned) “without the physical presence of the members or persons entitled to attend the meeting (i.e. the statutory auditors, the members of the employee representative bodies)”. The deliberations may be, thus, held by telephone or video conference or by correspondence vote. Core operations such as the approval of the accounts and the distribution of dividends will, thus, not have to be delayed. Note, however, that the use of closed session is not automatic and is subject to a condition: the general meeting must have been convened in a place decided at the date of the convening or of the meeting by “an administrative order limiting or prohibiting the collective gathering for sanitary reasons” (i.e. a place affected by the containment and the prohibition of the grouping of persons preventing the general meeting to be held physically).
In this light, article 5 of the regulation facilitates the use of the video conference and of other means of telecommunications by suppressing the requirement of a provision in the articles of association of the company to this effect. Indeed, the shareholders attending the general meeting through the use of such means will be deemed present for the calculation of the quorum and of the majority, provided that technical mean is available in the company to verify their identification in real time. Though well suited to small companies, such a condition might jeopardize the meeting to be held remotely in a company with numerous shareholders. The recourse to such means of remote connexion must be decided by the “competent governing body” (organe compétent) of the company.
The vote by written consultation (consultation écrite) is also exceptionally facilitated as the requirement of a provision in the articles of association (statuts) to this effect is suppressed.
Article 7 of the regulation provides that the companies which have already convened the shareholders, prior to the decision of the governing body to have recourse to the written consultation, should, if they are not listed companies, inform the shareholders at least 3 business days prior the date of the meeting without the need of a new convening. With respect to listed companies, the recourse to the holding of the meeting remotely may be regularised by way of a press release delivered by the company.
Adjustment provisions for collegial administrative, supervision and direction bodies
Article 8 of the regulation facilitates the recourse to telephone and video conferences for the meeting of such bodies by suppressing the requirement of a provision to this effect in the articles of association or in the internal regulation (règlement intérieur). The members located remotely will be deemed to be present for the calculation of the quorum and of the majority, provided that technical means enable “their identification” and ensure their “effective participation”.
As provided with regard to the general meetings, article 9 of the regulation extends the recourse to the vote by correspondence in the collegial management, supervision and direction bodies.
- Regulation n° 2020-318 adapting the rules relating to the establishment, closing, review, approval and filing of the accounts and other management documents of the companies
Article 1 of the regulation provides for a three months extension of the initial period set out by article L.225-68 of the French Commercial code (Code de commerce) (i.e., three months from the end of the financial year) to present the annual accounts, the consolidated accounts along with the management report and the corporate governance report to the supervisory board (conseil de surveillance). Note that this article does not apply if the statutory auditor of the company has issued its report before 12 March 2020. Even if the reference to the supervisory board and to article L. 225-68 of the Commercial code is intended to the public limited liability companies (SA) with a board of directors and a supervisory board, the text should apply to other corporate/entities forms since it also includes “legal persons with no legal capacity governed by private law” closing their accounts between 31 December 2019 and one month after the date of the cessation of the sanitary emergency (i.e. on 24 June 2020, the state of emergency ending up in theory on 24 May 2020). A clarification from the government on this point would be welcome to the extent a decree (décret) may complement such regulation.
Article 3 provides that the legal, regulatory or statutory time frames to approve the annual accounts (or to convene the meeting entitled to approve the accounts) and the documents which are attached to these latter are extended of three months.
For any commercial companies employing at least 300 employees and having a net turnover (chiffre d’affaires net) of at least 18 million euros at the closing of a considered financial year, article 4 of the regulation extends the time periods imposed on the board of directors, management boards (directoires) or the managers (gérants) of companies of two months to draw-up the forecast management documents (i.e. a statement of the realizable and current assets and of the current liability (situation de l’actif réalisable et disponible et du passif exigible), the forecasted profit and loss account (compte de résultat prévisionnel), financing table (tableau de financement) and a forecast financing plan (plan de financement prévisionnel)). Note that the text limits this extension to the documents relating to the accounts or semesters closed between 30 November 2019 and a month after the end of the state of emergency.
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Client Alert 2020-172
