The BCCA streamlines business transfers

• The private limited liability company (SRL), which replaces the SPRL and the SCRL, becomes the benchmark legal form, offering shareholders broad freedom in its organization. The concept of capital has been removed and replaced by greater involvement from the founders.

• The public limited company (SA) is retained and primarily targets listed and large-scale companies, formalizing the possibility of dual governance through a management board and a supervisory board.

• The cooperative company (SC) is designed for entities with a genuine cooperative purpose.

• Finally, the simple company, which replaces the company under ordinary law, does not possess legal personality and primarily targets estate planning structures as alternatives to joint ownership.

Certain specific provisions of the BCCA directly impact business transfers. We will focus in particular on the situation of SRLs, which are set to become the most widespread legal form for modest-sized enterprises.

• The approval clause is generalized but is no longer mandatory. This clause provides that any transfer of shares is subject to approval by half of the shareholders owning 75% of the capital (excluding the shares to be transferred), unless the transferee is a shareholder, spouse, child, or parent.

  This restrictive clause, applicable to SPRLs, becomes the default regime for SRLs. Under the "former regime," approval could be tightened by the articles of association, but neither loosened nor eliminated. It is now possible for SRLs to agree in their articles of association on a more or less restrictive clause, or even to remove approval requirements entirely. The legislature aimed to offer greater flexibility to shareholders, who must nevertheless assume their choices in the event of a dispute. This approval clause impacts acquisition financing: if the articles of association do not provide for the free transfer of shares, pledging them becomes problematic, even though it is a standard security requested by banks financing the acquisition. However, this obstacle can be overcome through an amendment to the articles of association.

• Facilitation of multiple voting rights:

  The primary objective is to allow start-up founders to raise capital while retaining a higher proportion of voting rights. Double or multiple voting rights can also prove useful when structuring a family business transfer to maintain equity among descendants, while allowing the child running the business (the active manager) to retain operational control. It should be noted that the BCCA distinguishes between non-listed companies—where multiple voting shares are generally attached to the share itself and are therefore transferable—and listed companies, where double voting rights are attached to the shareholder's identity and lapse upon transfer.

• Flexible exclusion and withdrawal procedures:

  The exclusion or withdrawal procedure is maintained and streamlined. In cases of persistent disputes or severe conflict among shareholders, a party may petition the President of the Enterprise Court, sitting "as in summary proceedings," to order their own withdrawal or the squeeze-out of the recalcitrant shareholder, provided there are "just grounds." The legislature intended to significantly broaden judicial discretion: the judge may, for instance, set aside the approval clause or adjust a price fixed by the articles of association if it is manifestly unreasonable. The judge can also adjudicate related disputes, such as those involving share ownership or shareholder loans. The court can even initiate a non-compete covenant, reinforce an existing one, or release real and personal guarantees granted in favor of the company. This enhancement of judicial powers—guided solely by the corporate interest of the company—aims to prevent shareholder conflicts from bogging down to the detriment of the business and its workforce.

By implementing this major legal framework, the legislature intended to modernize and streamline corporate law while expanding its scope. Consequently, it is recommended more than ever to seek sound professional advice when forming a company and at every change in shareholding. Great care should be taken when drafting the articles of association to ensure they are clearly understood and reflect the true intent of the parties. Where multiple shareholder categories exist, implementing a shareholders' agreement is strongly recommended to supplement the public articles of association with a private document.