Increase in Share Capital Which has Been Reserved for Employees

Advantages of share capital include: Share capital is a source of permanent capital – Shareholders cannot have a refund on their shares. Instead, if they want to sell their shares, they must find someone else to sell them to.

The definition of an employee is one who works for someone else or a company in exchange for wages or some other agree-to compensation. An example of employee is an individual who is employed by McDonald’s and is paid a certain amount of money for each hour worked.

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The French Supreme Court related to private matters ruled as a ratio decidendi on 28 November 2018 that the single vote on the resolution related to an increase in share capital reserved to employees is considered satisfactory to regularise an increase in share capital not subject to a vote on a preceding general meeting.

This allows the possibility for a general meeting to ratify an increase in share capital reserved to employees and is in line with the spirit of company law to allow ratification as much as possible to ensure legal safety.

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