Transformation occurs when a company changes its legal form by means of a decision of its shareholders. The decision does not involve the creation of a new company and the existing company is consequently deemed to continue with the same legal personality. As a result, any rights and obligations of the company existing before its transformation remain fully valid and binding.
The transformation of a company in which the shareholders have limited liability into a company in which the liability becomes unlimited is subject to the unanimous decision of the shareholders.
Effects
A decision to transform the company cannot be retroactive but is effective as of the day on which it has been decided by the shareholders. Nevertheless, the decision will only be valid as against third parties once the legal formalities have been completed:
- That is publication in a legal journal;
- Filing of minutes with the commercial court;
- Modification of entries in the RCCM and of entries in the land registry if the company owns real estate.
Specific regulations concerning SAs and SARLs
An SA or SARL may be transformed into another form of company if, at the time of the decision, it has existed for at least two years and has drawn up and approved its first two financial statements, and if its net equity is at least equal to its share capital.
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