28th June 2018
In a ruling dated 13th June 2018 (CE plén. 13-6-2018 n° 395495), the Council of State has finally clarified the notion of an "active holding company,", MSI's French law member Schmidt Brunet Litzler provides an update.
In a ruling dated 13th June 2018 (CE plén. 13-6-2018 n° 395495), the Council of State has finally clarified the notion of an “active holding company,” which it defines as a company: “whose principal activity, in addition to managing a portfolio of investments, is to play an active role in the management of the group’s policy and the running of its subsidiaries and, where relevant and on a strictly internal basis, the provision of specific administrative, legal, accounting, financial and property services.”
Before the 13th June ruling, only the Cour of Cassation have issued a definition of active holding companies. The Council of State’s definition builds on the definition issued by the Cour of Cassation, adding that management must be the company’s “principal” activity.
As such, companies with non-controlling minority shares in businesses may qualify for “active holding company” status. Furthermore, the Council of State mentions a certain number of factual elements to be used to prove “active holding” status, notably including:
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Schmidt Brunet Litzler is a business law firm committed to supporting clients throughout their growth and success, and defending their interests.
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