French Commercial code
In forceIf, as a result of losses recorded in the accounting documents, the company's shareholders' equity falls below half of the share capital, the shareholders shall decide, within four months of the approval of the accounts that showed the loss, whether the company should be dissolved early.
If dissolution is not decided by the majority required to amend the Articles of Association, the company is required, no later than the close of the second financial year following that in which the losses were recognised, to reconstitute its shareholders' equity to a value at least equal to half of the share capital or to reduce its share capital by the amount necessary for the value of the shareholders' equity to be at least equal to half of its amount.
In both cases, the resolution adopted by the shareholders is published in accordance with the procedures laid down by decree in the Conseil d'Etat.
If, before the deadline referred to in the second paragraph of this article, the company's shareholders' equity has not been reconstituted to a value at least equal to half of the share capital while the company's share capital exceeds a threshold set by decree by the Conseil d'Etat depending on the size of its balance sheet, the company is required, no later than the close of the second financial year following this deadline, to reduce its share capital to a value less than or equal to this threshold.
When, in application of the fourth paragraph, the company has reduced its share capital without its equity having been reconstituted and subsequently carries out a capital increase, it must bring itself back into compliance with the provisions of the same fourth paragraph before the close of the second financial year following that in which the increase took place.
If the manager or the auditor fail to bring about a decision or if the partners have been unable to deliberate validly, any interested party may apply to the courts for the company to be dissolved. The same applies if the provisions of the said fourth paragraph have not been applied. In all cases, the court may grant the company a maximum period of six months to regularise its situation. The court may not order the dissolution of the company if, on the day on which it rules on the merits of the case, the situation has been regularised.
The provisions of this article do not apply to companies in safeguard or receivership proceedings or which benefit from a safeguard or receivership plan.
The provisions of this article do not apply to companies in safeguard or receivership proceedings or which benefit from a safeguard or receivership plan.The provisions of this article do not apply to companies in safeguard or receivership proceedings.
