Capital transactions

Special benefits auditor in France: role and legal requirement

When a company grants certain shareholders a privilege that the others do not share, that privilege must be assessed by a special benefits auditor (commissaire aux avantages particuliers) before it is put to a shareholder vote.

What is a special benefit?

A special benefit (avantage particulier) is a privilege granted to a shareholder or a third party which breaks equality between shareholders without being a contribution in kind. It may be financial (a priority right to dividends or to the liquidation surplus, for example) or political, such as an enhanced voting right, today organised mainly through the regime for preference shares (actions de préférence). Unlike a contribution in kind, a special benefit is not an asset contributed to the capital: it is a right that is granted, but its value must still be measured in order to protect the other shareholders.

When is an appointment mandatory?

• Incorporation of an SA (public limited company) in which special benefits are stipulated for certain founders or shareholders (article L.225-8 of the French Commercial Code (Code de commerce)).
• Issue of preference shares to one or more named persons, whether or not shareholders (article L.228-15).

How is the auditor appointed?

The special benefits auditor or auditors are appointed by unanimous decision of the shareholders or, failing unanimity, by court decision, under the conditions set out in article L.225-147. They assess the value of the benefit granted under their own responsibility and deliver a report whose content, delivery deadline and conditions of availability to shareholders are set by a Conseil d'État decree.

Strict independence: the incumbent statutory auditor is excluded

The special benefits auditor is subject to the incompatibility rules in article L.821-31, like the contribution auditor (commissaire aux apports) and the merger auditor (commissaire à la fusion). Where preference shares are issued to named persons, article L.228-15 also requires a statutory auditor (commissaire aux comptes) who has carried out no engagement at the company for the last three years, in order to avoid any risk of self-review.

Approval by the shareholders

The shareholders vote at a meeting on the valuation of the special benefit proposed by the auditor. Any reduction of this valuation compared with the auditor's report requires the express agreement of the beneficiary of the benefit; failing that, the transaction to which the special benefit is attached cannot go ahead.

Our approach at audit france

audit france carries out the valuation of special benefits with the same standard of independence as its contribution audit engagements, within timescales compatible with the timetable of the general meeting. The signing partner remains the single point of contact throughout the engagement.

Why choose audit france

A 100% digital firm dedicated solely to statutory audit, registered with the Haute Autorité de l'Audit (H2A) and a member of the Compagnie Nationale des Commissaires aux Comptes (CNCC) and working across mainland France and the French overseas territories.

This page is a practical guide in English, for information only. It is not legal advice, and only the French texts have legal force. Check the version in force for your own situation.