What is a Société Anonyme Monégasque (SAM)?

Features and benefits

A société anonyme monégasque (SAM) is a joint stock company, and the company objects may be commercial or non-trading.

The professions may thus be incorporated in the form of a non-trading SAM.

An SAM may be chosen by entrepreneurs   for several reasons:

• It facilitates the development of existing firms and the passing on of such firms. Unlike partnerships or the SARL, where sales or transfers of shares to persons outside the company are subject to authorisation, sales and transfers may take place freely
• It offers a reliable and sound image, sought in particular by firms generating part of their turnover in foreign markets
• Directors have a favourable social security status because they can be treated as employees and opt for the 'general regime'
• Shareholders' liability is limited to the amount of their contributions
• Directors are not considered as traders. Civil servants can thus be appointed as directors under the conditions laid down by the law relating to the status of civil servants and minors

Conditions

Shareholders

An SAM must have at least two shareholders. There is no maximum number of shareholders. They may be natural or legal persons.

Since commercial capacity is not required, minors, even those not yet able to vote, and adults under judicial protection, guardianship or curatorship may be shareholders.

Contributions

Contributions must be in cash or in kind.
Contributions in skills or services may also be made, but are not taken into account when calculating the share capital.

Share capital   

At least EUR 150,000 (Sovereign Ordinance n° 13.845 of 06/01/1999).
For certain activities such as finance, the share capital laid down by the law is of a higher amount.

Use of a Monegasque notary

A Monegasque notary must be used to:

• Draw up the Memorandum and Articles of Association as an official deed
• Declare subscription and payment of capital in a notarised instrument

Authorisation for incorporation

The Memorandum and Articles of Association of a société anonyme monégasque must be approved by an Order from the Minister of State, who issues the authorisation for incorporation.

Share capital

Share capital of a minimum of EUR 150,000 is divided into shares of equal value (art.41 du Code de Commerce) which are of registered form.

The share capital must be fully paid up.

In order that the firm be incorporated, cash contributions must be fully paid up to an extent of at least one quarter of the shares subscribed by each shareholder (Art. 3 de l’Ordonnance du 5 mars 1895).

Shares representing cash contributions can be traded once the firm has been definitively incorporated.
Shares representing contributions other than those in cash must be fully paid up when the company is incorporated. They may only be traded two years after the firm has been definitively incorporated.

The registered office

In principle, the registered office of an SAM must be established on commercial premises (commercial lease, short-term lease or temporary tenancy agreement).

However, it is possible to domicile the firm at the "private" offices of a domiciliation company.

See the factsheet: "Domiciling a business activity or establishing a company's registered office"

The management of an SAM

An SAM is managed by Directors chosen from among shareholders owning a number of shares defined by the Articles of Association.

In practice, an SAM is managed by a Board.

Directors may be natural or legal persons. If Directors are natural persons, they may have the status of employees. Directors may also decide to entrust the management of the company to a third party if the Articles of Association so provide.

Appointment and removal of Directors

The first Directors (at least two) are appointed either by the Articles of Association for a period of three years if it is stipulated that their appointment is not subject to approval by the General Meeting, or by the initial Shareholders' Meeting for a duration of six years.

Upon expiry of their mandate, Directors may be maintained in office by a resolution of a General Meeting.

Directors can be removed ad nutum. They may also resign by giving the company notice of their decision. No formalities are required.

Directors' liability

Directors are only held liable in respect of the mandate that they have received.

They do not incur personal, joint and several liability in respect of the company's undertakings. (art. 39 du Code de Commerce).

Their liability, as for all shareholders, is limited to the amount of their contributions.

However, when, following a judgment recording suspension of payments, it transpires that the company's assets are insufficient to settle liabilities, the Court may decide that the company's debts shall be borne in whole or in part, with or without joint and several liability, by the Directors, except where the latter can justify that they have managed the business with the appropriate due diligence (art. 560 du Code de Commerce).

Personal bankruptcy or a prohibition from directing or managing a commercial undertaking or firm may also be pronounced in the event of a sentence pursuant to Article 560 of the Code de Commerce (see Art. 577), and in all cases described in aux articles 574 à 576 du Code de Commerce.

Directors' obligations

In respect of shareholders

Holding meetings

The Directors must call two kinds of meeting: Ordinary General Meetings (OGMs) and Extraordinary General Meetings (EGMs).

• Ordinary General Meetings:

The annual accounts must be approved by an OGM. 

The Ordinary General Meeting may only pass a resolution if it is attended by a number of shareholders representing a quarter of the share capital. If this number is not reached following a first call, a second meeting is called in the form and within the periods laid down in the Articles of Association.

That meeting passes its resolution whatever share capital value is represented by the shareholders present.

• Extraordinary General Meetings:

EGMs have the purpose of ruling on any amendment to the Articles of Association such as a change in legal form, or a change in the company name, a capital increase, etc.

The Extraordinary General Meeting may only pass a resolution if attended by a number of shareholders representing half the share capital. If this number is not reached following a first call, a second meeting is called no sooner than one month after the first.

During this period, publication must be made in the Journal de Monaco each week and at least twice, 10 days apart, in one of the leading newspapers in the Alpes Maritimes area, announcing the date of the second meeting and indicating the items on the agenda.

That meeting may only pass a resolution if it achieves a majority of three-quarters of the shares represented, whatever the number thereof.

Directors must call an Extraordinary Meeting within one month upon request by shareholders representing one tenth of the share capital.

Voting on Resolutions and Minutes

At all meetings, resolutions are passed by a majority of votes.
Once resolutions have been put to the vote by the Meeting and the agenda completed, the minutes are drafted and signed by the members of the Management Committee. An attendance sheet is attached, giving the names and domiciles of the shareholders and the number of shares held by each of them.

Ensuring that shareholders are provided with information

When a meeting is called, the Directors must send them any and all documents enabling them to vote in full knowledge of the facts.

For the Ordinary General Meeting, Directors must make available to shareholders, or their proxies, at the registered office or in any other place indicated in the invitation, at least 15 days before the meeting, a list of shareholders, the balance sheet, the profit and loss account, the management report, the auditors' report and, generally all documents which, by law, must be communicated to the meeting.

Shareholders may take copies of these documents.

Regarding third parties

Any person may require that a certified copy of the Articles of Association be issued to them at the registered office of the company.

In order to render certain corporate instruments enforceable against third parties, Directors must fulfil publication formalities which vary according to the nature of the resolution.

In this regard, any amendments to the Articles of Association approved by Ministerial Order give rise to notice being published in the Journal de Monaco and must be deposited with the general registry. Changes to the Board are recorded on the Trade and Industry Registry.

Shareholders

Shareholders have a right of oversight regarding the management of the company insofar as they actively participate in corporate life by voting on resolutions pertaining to the functioning of the company.

Powers relating to management of the company

Participation at meetings and voting rights.

The Articles of Association determine how many shares are required in order to be admitted to the General Meeting, either as an owner or as a proxy, and the number of votes allocated to each shareholder with regard to the number of shares they hold.

Shareholders may group together in order to reach the number of shares required by the Articles of Association, and appoint one among them to represent them at the General Meeting (Art.11 of the Ordinance of 5 March 1895).

If the Articles of Association make no specific requirement, any shareholder is entitled to participate at meetings and to vote.

Right to information

Every shareholder has a twofold right to information:

• Prior to a meeting

Before any meeting is held, documents enabling shareholders to vote in full knowledge of the facts must be sent to them.

For the Ordinary General Meeting, a list of shareholders, the balance sheet, the profit and loss account, the management report, and the auditors' report must be made available to them.

• Ongoing communication

At any time during the year, any shareholder may examine, at the registered office, either in person or through a proxy, the minutes of all General Meetings held during the last three years as well as all documents submitted to such meetings.