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Limited partnership

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Legal characteristics of French limited partnerships with shares

A French limited partnership with shares (société en commandite par actions – SCA) has two categories of partners:

• one or more general partners (associés commandités) – they are indefinitely liable for the Company’s liabilities;
• limited partners (associés commanditaires or shareholders) – their situation is the same as that of shareholders in a corporation (société anonyme). They are represented by a Supervisory Board.

A limited partnership with shares is managed by one or more managing partners (gérants), who may be individuals or corporate entities. They are selected from amongst the limited partners or third parties, but may not be shareholders. Because of the two categories of partners, corporate decisions are taken at two different levels: by the limited partners in general meetings, and by the general partners. Members of the Supervisory Board are appointed only by the limited partners. If a general partner is also a limited partner he cannot take part in the vote. Both French law and the specificities of its by-laws give Lagardère SCA, a French limited partnership with shares, a very modern structure that is perfectly suited to meet the demands of corporate Governance. It meets the two basic principles of establishing a clear distinction between management and control while associating very closely shareholders to the Company’s correct operations and progress. This structure is characterized as follows:

• It establishes a very clear distinction between the Managing Partners, who are responsible for the running of the business, and the Supervisory Board which represents the shareholders.
• The Supervisory Board is entitled to oppose the appointment of a Managing Partner or the renewal of his appointment by the General Partners. The final decision is vested in the shareholders.
• The two General Partners’ unlimited liability to the full extent of their assets is evidence of the proper balance between financial risk, power and responsibility.
• The Supervisory Board wields the same powers as the Statutory Auditors.