New measures to facilitate decision-making and the participation of shareholders in public limited companies (SA), companies limited by shares (SCA) and limited liability companies (SARL) introduced by French Decree n° 2018-146 dated February 28, 2018 as per ruling n° 2017-747 dated May 4, 2017.
1. Shareholders’ Meetings held exclusively via remote, virtual means.
The Articles of Association of public limited companies (SA) and companies limited by shares (SCA) may provide for general meetings held exclusively via videoconference or means of telecommunication enabling the identification of its shareholders.
Nevertheless one or several shareholders, holding at least 5% of the capital, have the right to request that a physical meeting be convened. The Articles of Association must specify if this right to oppose is to be exercised before or after the formalities of convening the meeting.
– Right to oppose exercisable prior to the convening of the general meeting:
– The company must notify its shareholders of the meeting date at least 35 days prior to the former by sending the text of the draft resolutions and a reminder of the conditions for exercising the right to oppose.
– The opposition must be addressed to the company at least 25 days prior to the meeting date.
– Right to oppose exercisable after the convening of the general meeting:
– The company sends to its shareholders the notice of meeting reminding them of the right to oppose and the conditions for exercising that right as well as the location where the meeting is to be held if opposition is made to holding it exclusively via remote, virtual means.
– The opposition must be addressed to the company within 7 days following the publication or sending of the notice of meeting.
– In the event of opposition, the company notifies its shareholders, at the latest 48 hours before the meeting, that it will not be held exclusively via remote, virtual means.
2. Inclusion of items or draft resolutions on the agenda for the company’s (SARL) general meeting made by shareholder(s) holding at least 5% of the capital.
Any and all companies (SARL) are required to send a notice to one or several shareholders holding at least 5% of the capital if so requested, informing them of the date scheduled for the assembly meeting.
When shareholders seek to include an item or draft resolution on the agenda, they must justify their request, accompanied by the draft text if need be, and address it to the company at least 25 days prior to the meeting date. If the request is in compliance with the legal terms, management must include it on the agenda.
According to Article 155, IV of the French Tax Code, LMP status is granted to taxpayers:
– Whose annual income, derived from said activity by the members of their tax household, is over € 23,000 and exceeds their tax household’s professional revenues; and
– Whose tax household has one member registered in the Trade Register as a professional landlord.
As a relieving measure, the French tax authorities granted LMP status to individuals who were not registered in the Trade Register simply due to the Register’s refusal based on the non-commercial nature of the activity, so long as those individuals could provide proof of the reason for said refusal.
In ruling n°2017-689 QPC dated February 8, 2018, the Constitutional Council overturned the obligation for registration in the Trade Register, considering that the aforementioned obligation ignored the principle of equality of public burdens.
As such, only the conditions pertaining to income derived from the activity as a furnished rental property landlord remain necessary for qualifying the activity as professional in nature, or not.