Legal implications of non-compliance with deadline for deposit of bearer securities

In line with the wording of the 2014 Act, a possible solution could be the issue of new shares to non-compliant shareholders, subject to the above-mentioned distinction between companies in which shareholders can vote regularly and those whose capital is fully represented by non-compliant shares.

Thus, for the first type of company, one may wonder if a "non-compliant” bearer shareholder could, if agreed with the other voting shareholders, request the issuance of new shares in its favour by the latter. Indeed, in this case, the fate of bearer shareholders rests on the shareholders able to vote. They will be able to vote either for or against bearer shareholders remaining in the company, especially as not only will the quorum for such vote not include bearer shares, but also bearer shareholders “non-compliant” with the 2014 Act are denied any participation in general meetings[11]. This could be a possible solution if there’s agreement between the shareholders.

However, for companies whose capital is fully represented by bearer shares not registered in time, the question is much more delicate: if affected bearer shareholders can not participate in any meeting, then there are no shareholders to make decisions. So it seems that the only solution is an outright liquidation of such companies. Also, regardless of whether it happens before or after the cancellation of all the shares representing the capital, it seems that the inevitable company liquidation should be requested by the board before the State Prosecutor.

Conversion into registered shares

Finally, it seems that as long as the bearer shares are not cancelled, the request for conversion into registered shares could be a possible solution. Indeed, it is useful to recall that many bearer securities have been lost or stolen mainly because of their age and subsequent transmission over time, so such a conversion would make sense, especially since there are no required formalities under the 1915 Act, a simple request of the shareholder being sufficient[12]. However, reluctance to take such steps is understandable, given that the 2014 Act is not explicit about the practical procedures for its implementation.


[1] FATF Recommendation no. 24, dated 2012: http://www.fatf-gafi.org/media/fatf/documents/recommendations/Recommandations_GAFI.pdf
[2] A new article 171-2 was added to the 1915 Law, which provides for such sanctions.
[3] Article 67 of the 1915 Act providing quorum and majority for the amendment of articles of association applicable to SAs.
[4] Articles 69 (2) et seq. of the 1915 Act.
[5] Article 32 (2) of the 1915 Act.
[6] Article 32-1 (4) of the 1915 Act.
[7] See article by I. Charlier, L.- A. Takerkart-Wolf and L. Licata, Réforme du régime des actions au porteur (only in French), in ACE 2014/10, p.21.
[8] Article 26-2 of the 1915 Act provides for a minimum capital of EUR 31,000 for SAs.
[9] For instance, France and Belgium opted for the suppression of bearer shares regime, respectively in 1975 and 2005.
[10] Article 39 of the 1915 Act provides that: "At the Company’s registered office is held a register of registered shares to which each shareholder can have access which contains: [...] the accurate designation of each shareholder and the indication of the number of its shares [...]”.
[11] Article 6 (4) of the 2014 Act.
[12] Article 43, para. 3 of the 1915 Act provides that: "The owners of bearer shares or securities may, at any time, request the conversion, at their expense, in registered shares or securities".