Analysis of Changing Institutional Environments, New Accounting Policies, and Corporate Governance Practices in France
As in many European countries, French accounting principles and accounting rules are enacted by the national legislature. The primary source of this legislation is the Commercial Code (Code de Commerce), which includes provisions based on different laws and decrees (Règlements, Lois and Décrets.). Articles L.123-12 to L 123-28 of the code provide a framework of general accounting rules, which are applicable to all forms of business enterprises (Nobes and Parker 2008, 304). Another set of articles, L. 233-1 to L. 233-27, applies to groups’ consolidated accounts. Other important sources are ministerial orders (Ordonnances) and recommendations (Recommandations and Avis) prepared by different organizations, such as national standard setters (Conseil National de la Comptabilité [CNC] and Comité de la Réglementation Comptable [CRC], which merged into the Autorité des Normes Comptables [ANC] in 2009), the accounting profession (Ordre des experts comptables, Commissaires aux comptes), and the fi nancial market regulation authority (Autorité des marchés fi nanciers [AMF]) for listed companies. French accounting is also infl uenced by tax laws (Code Général des Impôts [CGI] and Lois de Finance). In 2007, there were a total of three million business enterprises, approximately 1.5 million of which have unlimited liability (sole proprietorships and general partnerships), with the other half composed of companies with limited liability. A limited liability company may take a form of a Société à responsabilité limitée (SARL), a Société Anonyme (SA), and, in rare cases, a Société en commandite par actions (SCA). Less than one thousand companies are publicly traded and, to be listed on the stock exchange, the company must take the form of either an SA with a minimum share capital of €275,000 (compared to €37,000 for the other companies) or an SCA. Only a minority of SAs are
listed on a stock exchange.1 At the beginning of 2007, the number of registered companies classifi ed by categories was 1,500,000 SARL and 133,000 SA, equal to 8 percent of the total number of limited liability companies (Bertrel et al. 2009, 716). The different forms of companies listed on the French stock exchange and their governance characteristics are presented in the second section of this chapter.