French Monetary and Financial Code
In forceMutual guarantee companies may be set up between traders, industrialists, manufacturers, craftsmen, commercial companies and members of the liberal professions. Their purpose is to guarantee their members in respect of their professional transactions.
Mutual guarantee companies may also be set up between owners of buildings or property rights. Their purpose is to guarantee their members in respect of loans taken out for home ownership or the refurbishment and repair of their buildings.
The companies referred to in the first and second paragraphs are authorised to provide their members with the advice referred to in Article L. 311-2, I, 5, in connection with a guarantee transaction and in direct relation thereto, without however requiring the applicant for a guarantee to accept an advisory service.
The guarantee may be given by the guarantee or endorsement of commercial paper and notes created, subscribed or endorsed by the members of the companies or in any other form.
The capital of mutual guarantee companies is made up of registered shares, which may be of unequal value, but none of which may be less than 1.5 euros, and which may be subscribed by non-participating members who are entitled only to remuneration for their contributions, in addition to members who share in the benefits of the company.
Companies are not formed until one quarter of the subscribed capital has been paid in. Notwithstanding the provisions of article 12 of law no. 47-1775 of 10 September 1947 on the status of cooperation, the surplus is paid up by successive calls for the quarters not yet paid in as and when mutual guarantee operations increase, so as to enable the company to proportion the amount of the share capital to the volume of operations handled.
