Several measures designed to support transparency, modernise business activity and combat corruption are included in France’s new Sapin II Law (Law 2016-1691). Also, an abundance of new provisions are expected in forthcoming ministerial orders.
The new law dictates that pay and benefit packages for executives of public limited listed companies (sociétés anonymes) must now be approved by the annual general meeting.
Rhidian David, an associate at Hughes Hubbard & Reed, explained that this measure gives shareholders a say over the criteria used for setting and allocating the remuneration and any benefits which the chair, general managers, delegated general managers or members of the management or supervisory boards may be entitled to.
“Shareholder approval must be renewed each time any of these components changes or an executive is reappointed,” he added.
Where a public limited company has a management board, the need for the supervisory board to give prior authorisation for a total or partial disposal of a shareholding or granting of security is abolished, as are the administrative filing requirements for foreign investments outside specified sensitive sectors of activity.
The requirements for a limited liability company to appoint an auditor have been relaxed and the procedure for issuing bonds has been simplified; bondholder decisions may now be made in written or electronic form, instead of at a general meeting of bondholders.
Further expected measures to simplify company law, said David, include a reduction in the mandatory content of management reports of commercial companies; simplified requirements relating to filing reports and information at the Registry of Commerce and Companies; simplified rules on related party agreements in sole shareholder simplified joint-stock company; reinforced minority shareholder rights in limited liability companies; and simplified share transfers in simplified joint-stock company.