Covid-19: Extension Of Deadlines For The Approval Of The Accounts Of Private Law Businesses

• Published date: 08 June 2020
• Author: Ms Florence Grangerat
• Subject Matter: Corporate/Commercial Law, Coronavirus (COVID-19), Corporate and Company Law, Corporate Governance, Operational Impacts and Strategy
• Law Firm: Soulier Avocats

Adopted in furtherance of the Emergency Law No. 2020-290 of March 23, 2020 to deal with the Covid-19 epidemic, Ordinance No. 2020-318 dated March 25, 2020 adapting the rules relating to the preparation, closing, audit, review, approval and publication of accounts and other documents and information that private law legal persons and entities without legal personality are required to file or publish in the context of the covid-19 epidemic has introduced temporary exceptional derogations, particularly with regard to the approval of accounts.

First of all, it should be recalled that the scope of application of Ordinance No. 2020-318 (the "Ordinance") is quite broad since it applies to all legal persons and groups without legal personality governed by private law (the "Concerned Entities"), in particular:

• civil and commercial companies (sociétés anonymes, i.e. joint stock companies sociétés par actions simplifiés, i.e simplified joint stock companies, société à responsabilité limitée, i.e. limited liability companies, sociétés en nom collectif, i.e. general partnerships, etc.),

• associations, foundations and endowment funds,

• economic interest groups and European economic interest groups,

• cooperatives,

• supplementary health insurance funds and groupings of supplementary health insurance funds, etc.

However, some provisions of Ordinance No. 2020-318, have a much narrower scope of application, such as Article 2 thereof which only applies to commercial companies in liquidation.

In our opinion, one of the key measures of the Ordinance is included in Article 3 which provides, in particular, that for Concerned Entities, the deadlines imposed by laws or regulations or by the by-laws for the approval of the accounts or the convening of the meeting of shareholders/members responsible for such approval, are extended by three (3) months.

The report to the President of the French Republic concerning the Ordinance specifies, with regard to Article 3 thereof, that "the purpose of these provisions is to take into account the situation of companies and entities for which the preparation/audit of the accounts was in progress at the time the administrative measures came into force and which could not be completed within a period of time compatible with the holding of the general meeting, insofar as the accounting documents may no longer be accessible".

This automatic extension implies, however, that two (2) conditions be met. These provisions are indeed only...