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The minutes of general meetings for approval of the annual accounts of commercial companies

Once a year, the annual accounts for the last financial year, i.e., the balance sheet, the profit and loss statement and the notes, must be approved of the Annual General Meeting. More specifically, in most commercial companies (SA, SAS, SNC, SCS, SA, SARL etc. ), the members of the executive bodies are liable to heavy criminal and civil sanctions for management error, if they breach the obligation to submit annual accounts for approval by the partners or shareholders. For this reason, the members of these executive bodies must demonstrate that they have indeed submitted the company's annual accounts for the preceding financial year for approval by the partners or shareholders, who generally meet in Annual General Meeting, by drawing up minutes of the general meeting. The approval of the annual accounts is therefore strictly regulated. By approving these annual accounts, these partners or shareholders implicitly demonstrate that the documents concerned contain data that has been prepared on a true and sincere basis. They also presume that, as of the closing date of each financial year, these annual accounts reflect a faithful picture of the assets, the financial position and the book profit (or loss) for the companies' business. More generally, the approval of the annual accounts represent the indispensable tool to provide a minimum of information on the main accounting parameters, financial management and operations of commercial companies. They are therefore an essential decision making tool aiding the diverse interests of any interested person (directors; shareholders; investors; government authorities; creditors, such as bankers, suppliers; customers; competitors; commercial courts and potentially other judicial authorities, responsible for preventing and dealing with companies in difficulty) near or far, through access to the company's business data as well as by their financial, accounting and management position. For all these reasons, it is vital that the annual accounts must be approved in strict compliance with the statutory requirements.

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File : Transfer of a company registered office

Part 3

Transferring the registered office abroad

Transferring the registered office abroad

Transfer of the registered office of side French territory brings to an end the obligation by the company to subject itself to French law.

From a fiscal and legal viewpoint, transferring the registered office abroad is equivalent to a dissolution-liquidation of the company in France with the commercial court registry. The company is then created in the host country and becomes subject to the laws of that country. Because transfer of the registered office abroad results in change of the company's nationality, in theory it requires that the corresponding decision as well as that corresponding to modification of the articles of association are arrived at unanimously between the partners or shareholders.

Exceptionally, for limited companies (SA companies) and publicly traded partnerships (sociétés en commandite par actions) (SCA), the company's nationality can be modified by the extraordinary general assembly, on condition that France and the host country have drawn up a convention allowing acquisition of nationality, and the transfer the registered office to its territory and to maintain its legal entity status.

In the latter case, the transfer takes place in two phases:

  • Firstly the company performs a modifying inscription with the CFE (for example the commercial court registry) mentioning the plan to transfer the registered office abroad, along with a request to the judge assigned to monitoring the Trades and Business Register (RCS) requesting authorisation to perform transfer of the registered office, striking the company from the RCS, while maintaining legal entity status.
  • Secondly, the company along with recent documentary proof of its registration in a public register in the country, filed with the CFE, for example the commercial court registry, a request to be struck off from the RCS.

Special fiscal rules are applicable to transfer of the registered office of the company from France to a another member state of the European Union (EU): the fiscal consequences of a cessation of activity do not apply to companies transferred in this manner, even though, legally the transfer of the registered office amounts to a dissolution of the company in France followed by creation of the company in the host country. Only the added values attendant upon assets transferred or sold at the time of transfer of the registered office are immediately taxable if such assets are taken off the balance sheet of the company subject to French corporate tax law.
The transposition to French law of the specific legal status of a European limited company (SE), applicable throughout the European Union, has made possible the transfer of registered offices, without dissolving and then creating a new entity of this type of company, from any member state of the European Union towards any other member state. It is for this reason that article L. 229-2 for the commercial code makes provision that any regularly registered European company with the Trades and Companies Register may transfer its registered office to a another member state. This type of registered office transfer takes place as follows:
The company draws up transfer plans. Once the plans have been approved by the extraordinary general assembly of shareholders (where applicable, subject to ratification by the shareholders' special assembly) they are filed with the relevant commercial court registry; announcement of the registered office transfer is then published. Subsequently, a Notary delivers a certificate attesting that the deeds and formalities have been properly performed prior to the transfer of the registered office.
Good to know: similarly, the European cooperative society and the European economic interest grouping (GEIE) corresponding to other specific legal forms throughout the European union, may also be subjected to transfer of the registered office.

Good to know: transfer of the registered office to a department or an overseas territory does not give rise to change of the company's nationality, and therefore does not correspond to a transfer abroad.

Monitoring a request to transfer a registered office

  • If the new registered office is situated in the same territorial jurisdiction as the former registered office, the commercial court registry, as soon as it receives the complete dossier, carries out the modification to the Trades and Business Register.
  • If the new registered office is in the geographical jurisdiction of another registry, it is the task of the court registrar under which the new registered office falls to inform the court registrar under which the registered office formally fell. Upon reception of this notification, the registrar of the former registered office carries out cancellation as of right, and informs the registrar of the new court.
    Once this procedure has been performed, the company will receive a new SIRET number.

Good to know: the SIREN number of the company does not change when a registered office is transferred, including transfer to the territory of another registry.

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