THE Shareholder
LexInter | February 19, 2002 | 0 Comments

THE Shareholder

Definition of shareholder The rights and powers   of shareholders  
The shareholder holds a security representing part of the company’s capital.

The share capital represents the total amount of the contributions made by the shareholders (in industry or in cash) and the possible integration, at the decision of the shareholders, of the profits put in reserve. The shareholder is the lender of last resort to the business, the one who takes the ultimate risk of the business.

The nominal value of the share is fixed by the articles of association, the stock market value of the balance between supply and demand on the market. The price multiplied by the number of shares represents the market capitalization of the company.

In corporate governance theories, one of the fundamental obligations of managers is to increase shareholder value

Shareholders can be natural or legal persons, they can be individually or through collective investment undertakings UCITS ( SICAV or FCP ) which are managed by fund managers

The shareholders can entrust the management of their portfolio to managers by virtue of a management mandate.


Case law on portfolio management



The shareholder is the owner in the contractual theory of the company. In theory, he has the power to dismiss directors that he can exercise in  general meetings.

The leaders have the power in the institutional theory which makes the social interest    the “compass of the company”. The shareholder’s sovereignty rights are only made effective by legal mechanisms (such as legal information), and civil sanctions ( civil liability of directors),    in particular in the event of corporate difficulties ( liability in the event of recovery judicial) and criminal sanctions (criminal liability of managers ) reflecting considerations of general interest.


Saver shareholders are expected to manage or control the companies in which they hold securities, shares or bonds, during general meetings, the rules of which have been strictly codified. This conception is a transposition of the rules of political power within commercial companies. The common will of the shareholders expressed at the meeting and the appointment of a board of directors which itself appoints a Chairman , who leads the policy of the company.

It is this approach which was incorporated into the French law on commercial companies dated July 24, 1966, in accordance with the themes of “corporate governance”.


The listing of the company involves, apart from company law, stock market law for the protection of the investor. Under the influence of market standards resulting from the globalization of markets, and because of what has been called the “shareholders’ revolt”, shareholder   rights become a real counter-power.


THE RIGHTS OF SHAREHOLDERS minimum percentage of capital required
Right to seek the appointment of a representative responsible for convening the meeting article L 225-103Decree of May 3, 2002 in case of emergency  an action
outside of an emergency 5%
Right to ask written questions article L 225-108 in the period preceding the holding of the meeting an action
article L 225 -232 twice a year, on any event likely to compromise the continuity of operations 5%
Right to request the inclusion of a question on the agenda of the meeting article L 225-105 and D 128 from 0.5% to 5% depending on the amount of capital
Right to collectively exercise social responsibility action against managers article D 200 from 0.5% to 5% depending on the amount of capital
Right to bring individual liability claims against the directors article L 225 -252 an action
Right to request the challenge or dismissal of the auditor article L 225-230 and L 225-233 5%
Right to request the appointment of a management expert article L 225-231 5%


The assembly has   a fundamental role in the exercise of shareholders’ rights in the company. Shareholders cannot be deprived of their right to vote and case law affirms the public order nature of the right to vote.

In fact, the institutional character of society, in the absence of the possibility of a conventional restriction on the rights of leaders and power of direction, corresponds more to the assertion of a theoretical sovereignty than to an effective ultimate power.

Moreover, the practice of blanket powers hinders the active participation of shareholders who are often unaware that they are in principle favorable to management decisions.

Moreover , given the importance of collective investment undertakings, the protection of shareholders ‘rights poses the problem of the managers’ voting policy. The AFG / ASFI code of ethics recommends active participation in assemblies.

Finally, the rules regarding the immobilization of securities also limit the possibility of voting. The American practice of the “record date” with the immobilization x day before the meeting the time to identify those who wish to participate in the meeting is more in line with a real possibility for the shareholder to exercise his right to vote.  

Personal damage to the shareholder and social damage

Shareholders and Control

The loss of control of a company is a personal loss of the partners, distinct from the only loss of the value of the social rights which is a corollary damage of the social damage, Court of Appeal of Douai, Assembly of the Chambers, judgment number 97 06832 , November 15, 1999, Consorts Game against SA Dassault Aviation, Daigre, Jean-Jacques, Bulletin Joly Sociétés, 04/01/2000, pp 409-415

Reflection actions

Reflection actions, a new financing technique, Faugérolas, Laurent; Boursican, Étienne, Option Finance, n ° 623, 02/01/2001, PAGE (S) 23-29


Reflections on babywearing conventions, Ba Badjang, Bakang, Les Petites Affiches, 01/19/2001, pp 4-6

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