As of 1 May 2021, the Commercial Registry (CR) will proceed to the forced conversion of bearer shares of unlisted companies.
As a reminder, the forced conversion by the CR will have the following consequences:
- The CR will mention on the extract of the company concerned that there is a discrepancy between the articles of association and the registration.
- The CR will reject any requisition amending the company's articles of association as long as this adjustment has been made.
- Shareholders whose shares have been converted ex officio by the CR will no longer be able to register directly with the issuing company in order to exercise their rights and, subject to the company's prior consent, will have to apply to the Court (at their own expense) for registration in the shareholders' register before 31 October 2024 in order to be able to exercise their rights again. In the meantime, the corporate rights of shareholders who have not complied with the notification obligation are suspended and their property rights (e.g. dividend) are extinguished.
- If shareholders do not comply with the notification obligation by 1 November 2024, they will permanently lose their shareholder status and have their shares cancelled. Under certain conditions, they will retain a right to limited compensation for a period of ten years from the cancellation of the shares.
- Finally, the law provides for a fine for shareholders or companies that fail to notify beneficial owners or to maintain the share register or the list of beneficial owners of shares.
In order to avoid this eventuality and its consequences, it is necessary for the concerned companies to convert the bearer shares into registered shares as soon as possible (before 30 April 2021) and to adapt the articles of association accordingly.
We are at your disposal for any questions and to assist you in these steps.