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1. The definition of the order of movement of securities
The transfer of shares is carried out by a transfer of shares from the transferor's account to that of the transferee. This transfer will be made through a document called Order of movement. It is a written document that materializes the transfer of ownership of titles. Through this movement, the account holder orders the account-keeping institution to proceed with the transfer of the securities.
This order is used in the context of transfers of shares in simplified joint stock companies (SAS), public limited companies (SA) or companies limited by shares (SCA).
Conversely, companies whose capital is divided into shares are not concerned by the materialization of a movement order.
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2. Completion of the sale of shares
The transfer of shares can be carried out:
- By bank transfer from account to account;
- By registering in a shared electronic recording device and in particular, a blockchain. This registration is possible if the shares are not admitted to the operations of a central depositary and provided that the company's articles of association do not oppose it.
Do you want to know more about this? Check out our article on the registration of financial securities on a Shared Electronic Registration Device (DEEP).
In principle, no regulatory or legislative text requires the presence of a written document in connection with a transfer of shares, unlike the transfer of shares. However, in practice, assignments are subject to a written contract in order to prove the transfer.
When the transfer is recorded by private document, as many copies of the act must be drawn up as there are parties with a distinct interest in the transfer (Article 1375 paragraph Civil Code), i.e. as many copies as there are transferors and assignees.
a. Transfer by bank transfer from account to account
When the transfer of shares is carried out by a transfer from account to account from the transferor to the transferee, the transfer is carried out by means of a movement order.
a.1 The form of the order of movement
The texts do not organize any formalism. It is accepted that the order of movement can be established in a simple letter, provided that it contains all the elements necessary to inform the company of the transaction carried out as well as clear and precise instructions from the transferor.
However, the AFNOR standard resulting from the version of October 17, 2008 has implemented a movement order model. These are only recommendations. So they don't have of a mandatory nature. (Afnor standard NF K12-500, version 17 Oct. 2008, order of movement of financial instruments not admitted to the operations of a central depositary)
In addition to this norm, the company's articles of association may provide that the establishment of movement orders will be subject to a specific norm providing in particular for the obligation of certain particulars.
Since the movement order is only signed by the assignor, it cannot, by itself, constitute a document evidencing the transfer. (CA Paris 11-1-2018 no. 16/10056).
On the other hand, it may constitute prima facie evidence of the transfer in writing. The recognition of such probative value to an order of movement is the sole discretion of the trial judges (Cass. com. 3-11-1983 no. 82-10.294)
In the same way, the legislation in force does not punish the failure to keep a register of movement orders. However, in order to make the sale of SAS shares valid, it is necessary that it be reported in a register of movements of shares. This is even if you have signed a transfer contract and/or a title movement order.
In order to facilitate this formality, Axiocap allows you to generate a pre-filled title movement order using the information known on our solution. (link to our DEMAT register)
a.2 The information contained in the order of movement of shares
Under the terms of the Afnor NF K12-500 standard (version dated October 17, 2008), the order of movement of securities must contain:
- The identity and shareholder number of the owner of the security, author of the transfer;
- The identity of the beneficiary of the transfer;
- The number of shares transferred;
- The identification of the company whose shares are being transferred and the nature of the transfer (transfer, donation, etc.);
- Transfer date;
- The signature of the transferee (this formality is the sole responsibility of the transferor, who thus fulfils his obligation to deliver the shares to the purchaser): Cass.com.24-5-2011 No. 10-12.163);
- The signature of the person who maintains the register of movements of securities.
Don't waste any more time! Axiocap provides you with a movement order template free to download.
Is the company refusing to execute the movement order? What to do?
In this case, the purchaser may request in summary judgment that the company be ordered to proceed with this transfer. For this, the purchaser can invoke an emergency case (Article 834 of the Code of Civil Procedure & Cass. 3rd civ. 16-9-2008)
If the dispute is serious, it will be possible to invoke the occurrence of imminent damage. (Article 835 paragraph 1 of the Code of Civil Procedure)
b. The sale of shares registered in a blockchain
Does your company consist of shares that are not admitted to the operations of a central depositary and do your articles of association not prevent this?
In this case, the transfer may be materialized by a modification registration in a shared electronic registration device. (Article L.228-1 paragraph 9 of the Commercial Code and Article L.211-15 of the Commercial Code)
The transfer of ownership of shares results from the registration of the shares in the name of the purchaser in the blockchain.
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3. The sale of shares: what are the tax consequences?
Following the sale of shares, the transferee must pay not only the price of the shares but also the registration fees associated with the transfer of shares. This is a mandatory tax formality. (Article 726 of the General Tax Code))
It is applicable both to the sale of shares and to the sale of shares.
How much are these rights?
- Sales of shares, listed or unlisted, are subject to a registration fee of 0.1% with no cap. However, some transfers are exempt.
- Transfers of shares (SNC, SARL, EURL) are subject to a 3% registration fee after an allowance of 23,000 euros. This allowance is pro ratised in proportion to the share of capital transferred.
