Usufruct, SCI companies, shareholder rights, civil real estate company, usufructuary, bare owner, management rights, political rights, Court of Cassation
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Abstract
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Abstract
The Court of Cassation rules on the rights of usufructuary shareholders in a civil real estate company, particularly regarding their ability to trigger a shareholders' meeting.
Extract
[...] Company contracts are sometimes quite broad to allow for exceptions, and the usufructuary could negotiate additional rights by contract. 5. A restrictive interpretation to avoid abuses The objective is to prevent a usufructuary, who does not have full control over the shares, from making management decisions that benefit him personally. This is therefore a protection of the stability of the company, by preventing "personal interests" from taking precedence over the collective management of the associates. If the usufructuary is allowed to intervene, this risks creating legal confusion, jeopardizing the very structure of the company. ? [...]
[...] The Court of Appeal therefore considered that Mr. J and Mrs. P. J., as usufructuaries, could not request the appointment of a representative to request a deliberation of the associates. Their request was inadmissible because it did not concern a question having a direct impact on their right to enjoy the shares. The court thus correctly applied the rule that the usufructuary does not have the same rights as a bare owner, unless the question specifically concerns his right to enjoyment. The limits of usufructuary rights. [...]
[...] A usufructuary may intervene in day-to-day management acts to protect his interests, but he may not convene a general meeting. It is the bare owner who, in the event of a disagreement, has the upper hand. ? Although he is not granted complete management rights, the usufructuary could claim an indirect right to management. If he has a significant share in the profits and wants the company to maximize its profits (for his own patrimonial interest), one could imagine a kind of right to participate or be consulted before certain strategic decisions. [...]
[...] Problématique : Does the usufructuary have the rights of an associate? The issue raised by this judgment is that of the political rights of the usufructuary of a shareholding. Can usufructuaries request a shareholders' meeting regarding matters related to the management of the company? In law, usufruct is a right that allows its holder to enjoy a property as the owner would, while being required to preserve the substance of that property (Article 578 of the CC). Regarding shares, the question is whether the usufructuary has the same prerogatives as a bare owner to intervene in the company's decisions, particularly by requesting a shareholders' meeting. [...]
[...] ? The usufructuary is not a true associate, and in this capacity, he cannot claim a right to management or deliberation on the management of the SCI, unless it directly affects his right to enjoy the shares. If the impact on his usufruct is not tangible, he has no right to interfere in social decisions. [...]
