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Communications agency - Eliott & Markus
The so-called “Macron Law” dated August 6, 2015 allowed French corporations and limited liability companies whose accounts are audited to grant loans to companies with which they entertain economic relationships (section L511-6, 3bis of the French monetary and financial code).
These provisions came into force on April 25, 2016 with the publishing of Decree n°2016-501 dated April 22, 2016, which specified the terms and limits within which these loans may be granted.
Intercompany loans are now authorized where lenders and borrowers are linked by an economic relationship, which exists (Section R511-2-1-1, I of the French monetary and financial code):
1.Where both companies are members of a same economic interest grouping or a same grouping to which a government contract or a private agreement is awarded under decree n°2015-899 dated July 23, 2015 related to government contracts;
2. Where one of the two companies is currently the recipient of (or has received during the two previous fiscal years) a public subsidy in relation to a joint project involving these two companies and, as the case may be, additional companies. This joint project must meet one of the following criteria:
3. The borrower is a direct or indirect subcontractor of the lender or a member of its group acting as the main entrepreneur, a subcontractor or the project owner.
A company may also grant a loan to another company if the following conditions are met (Section R511-2-1-1, II of the French monetary and financial code):
A company cannot grant a loan to another company unless it meets the following conditions (Section R511-2-1-2 of the French monetary and financial code):
Statutory auditors must be apprised, on an annual basis, of any loan agreements granted in accordance with Section L511-6, 3bis of the French finance and monetary code.
March 22, 2016 | Banking Law, Business Law