Estimated reading time (in minutes)

Share valuation dynamics This new decision relating to the valuation of the  shares   of a partner in a professional non-trading company hardly deserves  comment  .

Evaluation of Actions in a Professional Civil Society : The Force of the Texts:-

A recent decision concerning the valuation of a partner’s shares in a professional civil partnership has elicited little comment because of its reliance on the underlying legal texts. The solution presented in the decision stems directly from the provisions of the relevant texts. Regarding the public order nature of Article 1843-4 of the Civil Code, numerous scholarly articles and abundant case law have long debated this issue. Therefore, it is clear that neither the articles of association nor the judge can impose specific requirements on the expert appointed under article 1843-4, even concerning the valuation date.

Fate of Profits and Heirs in Stock Valuation: A Unique Perspective:-

The importance of judgment lies primarily in the distinct circumstances arising from the death of a partner, versus the more common situations involving the withdrawal or exclusion of a partner. In the event of withdrawal or exclusion, the debate usually revolves around  determining  the date on which the associate loses its status, which determines its right to share in the profits for a specified period. However, when a partner dies, the situation becomes relatively simpler. The question of the date of loss of partner status does not arise, and the fate of the beneficiaries is expressly regulated by law no. 66-879 of November 29, 1966, governing professional civil companies.

The law distinguishes the fate of shares, which pass to the heirs according to their patrimonial value, and the quality of partner, an extra-patrimonial prerogative attached by nature to the partner who has disappeared because of his intuitu personae character. Article 24, paragraph 2, of the law confers on the beneficiaries the right to transfer the shares of the deceased partner, provided that they meet the necessary conditions or obtain the approval of the company. The text also specifies the procedure for this purpose, specifying that in the absence of transfer or approval within the time limit, the company or the partners must reimburse the value of the shares to the beneficiaries according to the conditions provided for in Article 21.

Above all, paragraph 4 emphasizes that during this period, the heirs cannot exercise any rights within the company. However, unless these rights are forfeited, they retain the right to participate in the profits under the conditions provided for in the articles of association. This key provision clarifies the solution presented in the particular case by illuminating the extent of the heirs’ involvement in the affairs of the company during the valuation process.