French Monetary and Financial Code
In forceThe issue of bonds by an association entails the application of articles L. 612-1 and L. 612-3 of the French Commercial Code, regardless of the number of its employees, the amount of its turnover or resources or the total of its balance sheet.
The issue also requires the association to hold a general meeting of its members at least once a year within six months of the end of the financial year, in order to approve the annual accounts, which are published in accordance with the conditions laid down by decree.
If, as a result of the accumulated losses recorded in the accounting documents, the shareholders' equity has fallen by more than half compared with the amount at the end of the financial year preceding that of the issue, the general meeting must also be convened within four months of the approval of the accounts showing the losses, in order to decide whether to continue the association's activities or to dissolve it.
If it is not decided to dissolve the association, it must, by the end of the second financial year following that in which the accumulated losses were recorded, reconstitute its own funds.
In both cases, the resolution adopted by the General Meeting is published in the Trade and Companies Register.
If the General Meeting is not convened, or if it is unable to deliberate validly, the association loses the right to issue new shares and any holder of shares already issued may apply to the courts for immediate redemption of the entire issue. These provisions also apply in the event that an association which has not decided to dissolve fails to comply with the obligation to reconstitute its own funds within the period prescribed by the fifth paragraph of this article.
The court may grant the association a period of six months to regularise the situation; it may not order immediate repayment if, on the day it rules on the merits of the case, the situation has been regularised.
