minority shareholders who suffer an abuse by the majority can bring a civil action (there is an abuse of majority if the decision of the majority has been taken contrary to the general interests of the company and with the sole purpose of favoring the majority shareholders to the detriment of the minority shareholders). Where a disagreement arises between shareholders leading to paralysis of the company's operations, it is possible for a shareholder to ask the court to order the liquidation of the company. • The same rationale applies to the principle of abuse of minority rights, which can be defined as the fact that a minority shareholder prevents an essential decision by acting against the interests of the company, with the sole aim of favoring such shareholder's interests to the detriment of the other shareholders. • Any shareholder may ask the court to hold the corporate officers liable and to obtain damages for the losses suffered personally by the

• Duty to declare the “ultimate beneficial owner(s)” Every legal entity registered in France has an obligation to declare its “ultimate beneficial owner(s)” to the companies’ registry. The French legal entity has to declare the identity of any natural persons who (i) holds directly or indirectly more than 25% of the share capital or the voting rights of the company, or (ii) exercises control, by any other means, over the company. An amended declaration should be filed within 30 days of any fact or event which results in a modification or addition to such information. Only authorized persons may have access to this information. 4. Foreign Investment, Thin Capitalization, Residency and Material Visa Restrictions • Any significant barriers to entry for an offshore party • Access to certain regulated activities may be reserved to French or EU nationals or nationals of a country which has concluded a reciprocal treaty with France (e.g., architects, doctors, biologists, lawyers, statutory auditors, etc.). Exercising regulated activities may require conditions of holding a particular diploma or professional experience, or even the obtaining of an authorization issued by an administrative authority.

shareholder, as distinct from the losses suffered, as the case may be, by the company (Article L.225-252 of the French Commercial Code, action ut singuli ). the unanimous agreement of all of the shareholders (e.g., any decision which increases the current commitments of a shareholder, change of the nationality of acompany). Some decisions require

Furthermore, majority participation in companies active in certain regulated sectors may be reserved to professionals in that sector. For example:

For some regulated activities which can be exercised in France


ILN Corporate Group – Establishing a Business Entity Series

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