Chapter III: Limited liability companies.

Company shares may not be represented by negotiable securities. Any issue made in disregard of this rule is punishable under the conditions set out in the first paragraph of article L. 411-1 of the Monetary and Financial Code.

Shares are freely transferable by inheritance or in the event of the liquidation of community property between spouses and freely transferable between spouses and between ascendants and descendants. However, the Articles of Association may stipulate that a spouse, heir, ascendant or descendant may only become a partner after having been approved under the conditions set out in Article L. 223-14. On pain of nullity of the clause, the time limits…

Company shares may only be transferred to third parties outside the company with the consent of a majority of the members representing at least half of the company shares, unless the Articles of Association provide for a greater majority. Where the company has more than one member, the proposed transfer is notified to the company and to each of the members. If the company has not made its decision known…

If the company has given its consent to a proposed pledge of company shares under the conditions provided for in the first and second paragraphs of Article L. 223-14, such consent shall constitute approval of the transferee in the event of compulsory realisation of the pledged shares, unless the company prefers, after the transfer, to repurchase the shares without delay, with a view to reducing its capital. .

Shares are freely transferable between partners. If the articles of association contain a clause limiting transferability, the provisions of Article L. 223-14 are applicable. However, the Articles of Association may, in this case, reduce the majority or shorten the periods provided for in the said article.

The transfer of company shares is subject to the provisions of article L. 221-14.

The limited liability company is managed by one or more natural persons. The managers may be chosen from outside the partners. They are appointed by the partners, in the Articles of Association or by a subsequent deed, under the conditions provided for in Article L. 223-29. Under the same conditions, the mention of a manager’s name in the Articles of Association may, in the event that the manager’s duties are…

The Executive Chairman or, if there is one, the Statutory Auditor, presents to the General Meeting or attaches to the documents communicated to the shareholders in the event of written consultation, a report on the agreements entered into directly or through intermediaries between the company and one of its Executive Chairmen or shareholders. The General Meeting decides on this report. The manager or partner concerned may not take part in…

The provisions of Article L. 223-19 do not apply to agreements entered into in the ordinary course of business and on arm’s length terms.

Under penalty of nullity of the contract, managers or members other than legal entities are prohibited from contracting, in any form whatsoever, loans from the company, from being granted an overdraft by it, in a current account or otherwise, and from having their commitments to third parties guaranteed or endorsed by it. This prohibition applies to the legal representatives of associated legal entities. The prohibition also applies to the spouses,…