Investors in public M&A deals must notify the company and the market authorities of the identity of their ultimate shareholders when reaching specific thresholds. However, until recently, this obligation did not exist in private M&A transactions, where companies were not required to disclose the identity of their shareholders and confidentiality was maintained by shareholders' agreements.

The confidentiality of private M&A deals – in particular, the identity of new investors – is now at risk, following the introduction of Ordinance 2016-1635 on December 1 2016 and Decree 2017-1094 on June 12 2017, which have been adopted in the framework of the transposition of the 4th EU Anti-money Laundering Directive into French law.

Private companies' requirement

Non-listed companies which have their registered office in France must now disclose their beneficial owners. The owners must be identified not only when a company is set up, but also on a continuous basis following certain shareholder changes.

Disclosure of the beneficial owners is made through filings to the registry of the commercial court where the company is registered and must contain:

  • the identification elements and personal domicile of the beneficial owner;
  • the means of control that the beneficial owner exercises in the reporting company; and
  • the date on which he or she became the beneficial owner.

The disclosed information will not be made public and is accessible to only specific public administrations and authorities defined by law. However, the beneficial ownership register can be made accessible to any person who has a legitimate interest and has been authorised by a non-appealable court decision.

Failure to file the declaration on beneficial owners or filing inaccurate or incomplete information carries criminal penalties for the reporting company, as well as the legal representative who must complete the filing.

Incomplete definition of 'beneficial owners'

The definition of 'beneficial owners' remains incomplete. Pursuant to Ordinance 2016-1635 a 'beneficial owner' is the natural person who controls, directly or indirectly, a legal entity or for whose benefit a transaction is carried out. The ordinance states that a new decree will specify this definition (particularly the notion of control) and the means of determining who is a beneficial owner. The new decree is yet to be published.


In light of this change, investors in non-listed companies should adapt quickly. The legislation has been applicable since August 1 2017 and companies incorporated before this date must comply with the new filing obligations by April 1 2018. In the meantime, confidentiality provisions of shareholders' agreements should be revisited in order to provide that the parties undertake to supply the necessary information for the reporting company to carry out its legal disclosure duties.

This article was first published by the International Law Office, a premium online legal update service for major companies and law firms worldwide. Register for a free subscription.

For further information please contact Alain Levy, Gwenaëlle de Kerviler or Linda Erlandsson at AyacheSalama by telephone (+33 1 58 05 38 05) or email (, or The AyacheSalama website can be accessed at