BOOK II: Commercial companies and economic interest groupings.

I.-The subscription by the company of its own shares, either directly or by a person acting in his own name but on behalf of the company, is prohibited. The founders or, in the case of an increase in capital, the members of the Board of Directors or the Management Board, as the case may be, are required, under the conditions set out in Article L. 225-251 and the first paragraph…

The General Meeting that has decided on a capital reduction not motivated by losses may authorise the Board of Directors or the Management Board, as the case may be, to purchase a specific number of shares in order to cancel them.

Companies which allow their employees to share in their results by allocating their shares, those which allocate their shares under the conditions provided for in articles L. 225-197-1 to L. 225-197-3 of this Code and those which grant options to purchase their shares under the conditions set out in articles L. 225-177 et seq. may, for this purpose, buy back their own shares. The shares must be allocated or the…

The Ordinary General Meeting may authorise the Board of Directors or the Management Board, as the case may be, to purchase the company’s shares, in order to offer them or allocate them: – in the year in which they are purchased, to the beneficiaries of a transaction mentioned in Article L. 225-208 of this code or intervening within the framework of articles L. 3332-1 et seq. of the French Labour…

The company may not own, directly or through a person acting in its own name but on behalf of the company, more than 10% of its total own shares, nor more than 10% of a given class. These shares must be held in registered form, with the exception of shares bought back to promote the liquidity of the company’s shares, and must be fully paid up at the time of…

Records of purchases and sales made pursuant to articles L. 225-208, L. 22-10-62, L. 225-209-2, L. 228-12 and L. 228-12-1 must be kept, under the conditions laid down by decree in the Conseil d’Etat, by the company or by the person responsible for servicing its securities. The Board of Directors or the Management Board, as the case may be, must indicate, in the report provided for in Article L. 225-100,…

The provisions of articles L. 225-209-2, L. 225-206 and L. 22-10-62 do not apply to fully paid-up shares acquired following a universal transfer of assets or following a court decision. However, shares must be sold within two years of the date of acquisition if the company owns more than 10% of its capital. On expiry of this period, they must be cancelled.

Shares owned in breach of articles L. 225-206 to L. 225-208 and L. 225-210 must be sold within one year of their subscription or acquisition. On expiry of this period, they must be cancelled.

A pledge by the company of its own shares, directly or through a person acting in his own name but on behalf of the company, is prohibited. Shares pledged by the company must be returned to their owner within one year. They may be returned within two years if the transfer of the pledge to the company results from a universal transfer of assets or a court decision. Failing this,…

A company may not advance funds, grant loans or give security with a view to the subscription or purchase of its own shares by a third party. The provisions of this article do not apply either to current transactions by credit institutions and finance companies or to transactions carried out with a view to the acquisition by employees of shares in the company, in one of its subsidiaries or in…