Question 18060 — local authorities

Summary

Mr. Éric Ciotti draws the attention of the Minister of the Economy and Finance to Law No. 2018-1021 known as “ELAN” definitively promulgated on November 23, 2018. The application of the provisions of 1° of Article L. 423-2 of the Construction and Housing Code to mixed economy companies for the construction and management of approved social housing poses difficulties. In accordance with the provisions of article L. 481-1-2 of the code of construction and housing, and except for exceptions provided for in the said text, “a mixed economy company approved pursuant to article L. 481-1 which manages less than 12,000 social housing units belongs to a group of social housing organizations within the meaning of article L. 423-1-1”. Article L. 423-1-1 of the construction code resulting from the ELAN law n° 2018-1021 of November 23, 2018 provides: “The organizations mentioned in articles L. 411-2 and L. 481-1 may constitute among themselves, in order to improve the efficiency of their activity, a group of social housing organizations, according to one of the following methods: 1° Either by forming a group of companies comprising a majority of organizations mentioned in the same articles L. 411-2 and L. 481-1, when one of them or another company directly or indirectly controls the others, that this control is exercised alone within the meaning of I and II of article L. 233-3 of the commercial code or jointly within the meaning of III of the same article L. 233-3; 2° Or by forming a group consisting of a coordination company within the meaning of Article L. 423-1-2 of this code and the holders of its capital. […]”. Under these provisions, mixed economy companies for the construction and management of social housing referred to in Article L. 423-1 must belong to a group of social housing organizations according to one of the following methods: either by jointly forming a coordination company; either by forming a group of companies comprising a majority of low-rent organizations or mixed economy companies for the construction and management of approved social housing, one of which or another would directly or indirectly control the others within the meaning of Article L. 233-3 of the Code of trade. Control is defined by Article L. 233-3 of the Commercial Code as follows: “I.- Any person, natural or legal, is considered, for the application of sections 2 and 4 of this chapter, as controlling another: 1° When he directly or indirectly holds a fraction of the capital conferring on him the majority of voting rights in the general meetings of this company; 2° When it alone has the majority of voting rights in this company under an agreement concluded with other partners or shareholders and which is not contrary to the interest of the company; 3° When it actually determines, through the voting rights it has, the decisions in the general meetings of this company; 4° When it is a partner or shareholder of this company and has the power to appoint or dismiss the majority of the members of the administrative, management or supervisory bodies of this company. II.-It is presumed to exercise this control when it directly or indirectly has a fraction of the voting rights greater than 40% and no other partner or shareholder directly or indirectly holds a fraction greater than its own. III.-For the application of the same sections of this chapter, two or more persons acting in concert are considered to jointly control another when they in fact determine the decisions taken at the general meeting. In essence, a company must be considered legally as having control over another when, thanks to the voting rights it holds, directly or indirectly, within the company and it ultimately takes the decisions adopted at the general meeting of shareholders, it ultimately decides to the composition of the management bodies. However, the provisions of article L. 1521-1 of the general code of local authorities specify that: “The municipalities, departments, regions and their groups may, within the framework of the powers recognized to them by law, create local mixed economy companies which associate them with one or more private persons and, possibly, with other public persons to carry out development or construction operations, to operate public services of an industrial or commercial nature, or for any other activity of general interest. […]”. According to the provisions of article L. 1522-1 of the general code of local authorities, "The deliberative assemblies of municipalities, departments, regions and their groupings may, for the purpose of creating local mixed economy companies mentioned in Article L. 1521-1, acquire shares or receive, as royalty, contributed shares issued by these companies. Equity investments are subject to the following conditions: 1° The company takes the form of a limited company governed by Book II of the Commercial Code, subject to the provisions of this title; 2° Local authorities and their groups hold, separately or jointly, more than half of the capital of these companies and votes in the deliberative bodies. […]”. In other words, communities and their groups can constitute mixed economy companies if they directly hold more than half of the share capital of said company and the majority of voting rights, thus allowing decisions to be taken at shareholder meetings; they hold half of the votes of deliberative bodies (board of directors) thus allowing them to control the governance of the company. Under these conditions and in view of what has just been explained, he asks it to specify under what conditions the mixed economy companies referred to in article L. 423-1 of the construction and housing code can belong to a group of social housing organizations according to the terms set out in 1° of article L. 423-1-1 of said code and therefore be “controlled” within the meaning of the provisions of article L. 233-3 of the commercial code while respecting the provisions of article L. 1522-1 of the general code of local authorities.

Machine translation from French. The official text remains authoritative.

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