"Value Sharing" Law of 29/11/2023: Softening of the rules governing the allocation of free shares



Law no. 2023-1107 of 29 November 2023 transposing the national interprofessional agreement (ANI) on value sharing within companies, signed in February 2023 by the social partners, was published in the Official Journal of 30 November 2023. As part of the measures designed to develop employee share ownership, Article 17 of this law softened and modified the rules governing the free allocation of shares (Articles L225-197-1 and L225-197-2 of the French Commercial Code).  

  • Increase in the overall ceiling for the allocation of free shares
    From now on, the number of free shares that may be awarded by the company may reach, on the date of the decision to award them:
    • 15% of the share capital (compared with 10% previously),
    • 20% of the share capital for companies qualifying as SMEs within the meaning of European Union law (compared with 15% previously),
    • 40% of the share capital, under certain conditions, when the allocation benefits all salaried employees of the company – so-called “democratic” allocation (compared with 30% previously).

The law creates an intermediate situation with a new ceiling of 30% when the free shares allocated benefit employees representing at least 25% of the payroll during the last financial year and at least 50% of the salaried workforce. 

  • Adjustment of the calculation of the individual ceiling for the allocation of free shares
    The individual ceiling according to which the beneficiary may not be allocated free shares if he/she holds more than 10% of the share capital or if the free allocation of these shares leads him/her to hold more than 10% of the share capital is now determined by taking into account only the shares in the issuing company held directly by the beneficiary for less than 7 years (and no longer, as previously, all the shares).
  • Extension of the scope of beneficiaries of free share allocations
    Unlisted companies may now allocate shares to officers of related companies, i.e. those in which they directly or indirectly hold at least 10% of the capital or voting rights. This option was previously only available to listed companies.

These new measures came into force on 1 December 2023.