CHAPTER II: Local semi-public companies

For operations other than the provision of services, the relationship between municipalities or their public establishments, on the one hand, and semi-public companies, on the other, is defined by a contract which provides, on pain of nullity:

1° The purpose of the contract, its duration and the conditions under which it may possibly be extended or renewed;

2° The conditions of repurchase, termination or forfeiture by the contracting local authority or public entity as well as, possibly, the conditions and procedures for compensating the company ;

3° The obligations of each of the parties and in particular, where applicable, the amount of their financial participation, the status of their contributions in kind and the conditions under which the contracting authority or public entity will advance the funds required to finance the assignment or reimburse the expenses incurred on its behalf and defined in advance;

4° The terms and conditions for remunerating the company or calculating the cost of its intervention: where the remuneration or the cost of the intervention is to be borne by the local authority or the public person, the amount is freely negotiated between the parties; where the company is remunerated by charges levied on users, the contract specifies the procedures for setting tariffs and reviewing them;

5° The penalties applicable in the event of default by the company or poor performance of the contract.

In the case of contracts providing for the acquisition of land, the execution of works and the construction of works and buildings of any kind, the contract shall also specify, and also on pain of nullity, the terms and conditions of the technical, financial and accounting control exercised by the contracting local authority or public entity; to this end, the company must provide each year a financial report including, in particular, as an appendix:

a) An updated forecast balance sheet for the activities covered by the contract, showing, on the one hand, the revenue and expenditure achieved and, on the other hand, the estimated revenue and expenditure still to be achieved and, where applicable, the resulting residual cost for its co-contractor;

b) The updated cash flow plan showing the schedule of income and expenditure;

c) A table of property acquisitions and disposals made during the financial year.

All of these documents are submitted for examination to the municipal council of the municipality concerned or to the deliberative body of the contracting public entity, which has the right to check the information provided, its accredited agents being able to be shown any accounting documents required for their verification.