(Cass. Com. 25 September 2012, no. 11-17.256)

A shareholders’ meeting of a société anonyme (SA) decided a capital increase reserved to its employees participating in a company savings plan and to suppress the preferential subscription rights, but without including such cancellation from the meeting’s agenda.

A minority shareholder who did not attend the meeting requested the cancellation of the share capital increase on that basis.

From the company’s point-of-view, the convening notice to a shareholders’ meeting deciding on a reserved share capital increase necessarily included a convening to decide on the suppression of preferential subscription rights without it being necessary to specifically include this point in the meeting’s agenda.

The French Supreme Court confirmed the Court of Appeal’s decision and recalls that, pursuant to provisions set forth under Articles L. 225-138 I. (share capital increase of an SA) and L. 225-105 subparagraph3 of the French Commercial Code, a shareholders’ meeting cannot validly deliberate on an item which has not been included in the agenda. As a result, the decision related to the litigious share capital increase shall be cancelled.