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Frequently Asked Questions

French Company Law :

Can a non French resident company have a bank account in France ?
Should I give a share option to my French (senior) employees ?
Are employees required to return shares if they leave the company ?
Can a director of a French company also be a salaried employee ?
What is my liability if I become a director of a French company ?
What is my liability if I become a shareholder of a French company ?
Do nominee shareholders exist in France ?
Do nominee Directors exist in France ?
May I reserve title to property which has not been paid for ?
What charges can be taken over a company or its assets ?
Do floating charges over assets exist ?
Can shares be held in trust ?






Can a non French resident company have a bank account in France ?

In general terms the answer would be "Yes" – but this is subject to a number of bureaucratic and regulatory hurdles, declarations and/or authorisations which are dependant on a number of factors, including nationality of the non-resident company by virtue of the place of its registered office.



Should I give a share option to my French (senior) employees ?

In general terms, share options are currently not part of the main stream business culture in other than the largest French corporate entities and more than a little caution should be exercised in this regard.



Are employees required to return shares if they leave the company ?

In general terms, the answer would be no. Thus a former employee holding shares would be entitled to obtain corporate and financial information regarding his former employer viz. in the same manner as that prescribed for any other similar shareholder.



Can a Director of a French company also be a salaried employee ?

In general terms the answer would be "Yes" – although his or her role as a Director (in French Administrateur and not Directeur) would be distinct from his or her separate salaried position in, say, a technical function. Great care should be taken before appointing Directors as employees and vice-versa.



What is my liability if I become a Director (Administrateur) of a French company ?

Except in specific and exceptional circumstances, such as wilful misconduct, negligence or the commission of a criminal offence, e.g. misappropriation of company funds, the liability of an Administrateur of an S.A.or an S.A.R.L. is limited to the amount of his shareholding in the company.



What is my liability if I become a shareholder of a French company?

In general terms, and this is subject to exception, the liability of any shareholder in a Société Anonyme or Société à Responsabilité Limitée is limited to the monetary amount of his initial shareholding therein.



Do nominee shareholders exist in France ?

No – viz. as compared directly to the habitual definition thereof and legal custom relating thereto in many common-law jurisdictions.



Do nominee Directors exist in France ?

No – viz. as compared directly to the habitual definition thereof and legal custom relating thereto in many common-law jurisdictions.



May I reserve title to property which has not been paid for ?

In theory the answer would be "Yes" in general terms - although inter alia the merchandise in question must still be identifiable, for instance not have been transformed, and moreover and for example it must be established that both parties clearly agreed in writing that title should only pass upon full payment being made.



What charges can be taken over a company or its assets?

Different types of charge or similar guarantees may be taken over shares, the business per se, fixed assets, real property etc. The undertaking thereof is nevertheless quite formal, but may be carried out by joint agreement by the parties or in certain circumstances by an ex-parte petition.



Do floating charges over assets exist ?

A floating charge as perceived in many common law jurisdictions does not exist in that form at French Law.



Can shares be held in trust ?

The concept of a trust, as perceived and construed in many common law jurisdictions does not exist at French Law.







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