WeCount Team
08 July 2021
Mainly used by companies listed on the stock exchange or entities carrying out large-scale projects, the regulations applicable to the public limited company are more restrictive than those of other corporate forms.
Suppose you wish to incorporate a public limited company (Société anonyme in French). In that case, it is essential to know the subtleties of this legal form distinguished by its rules of operation and governance.
What is an PLC? How to set it up? How does it work? What are its advantages and disadvantages? What is its tax regime? Why choose this company form when setting up a new business in Morocco? You will find below the answers to these questions and also more information.
The PLC, whatever its purpose, is a commercial company. Due to its form, it is suitable for large-scale projects or projects requiring a public offering. Its partners, known as shareholders, have limited liability in proportion to the amount of their contributions.
With a solid legal personality, the PLC is distinguished by particular management rules relating to the distribution of dividends and the appointment of its directors or management board members.
The PLC is also distinguished by its mode of governance, which is generally suitable for large-scale projects requiring a rigorous system of governance and easy access to financial markets.
The PLC's governance model is available in two formats: either with a board of directors and a general manager or with a management board and a supervisory board.
| Form | Commercial company by its form, whatever its purpose |
| Share capital |
300 000 MAD minimum. If the company makes a public call for savings 3 000 000 MAD |
| Shareholding |
At least five shareholders are required to form an PLC. They can be natural persons or legal entities and can be residents or non-residents of Morocco. The chairmen of the board of directors, the management board, and the supervisory board must be natural persons. |
| Control |
At least 1 auditor when the company does not go public. At least 2 auditors when there is a public offering. |
| Payment of the contributions | The share capital must be fully subscribed and paid up to at least a quarter. Shareholders must pay up the remainder within a maximum of three years. |
| Governance |
Two governance formats for the PLC:
|
| Taxation |
Corporate tax (IS) Local taxes (business tax and municipal services tax) |
| Incorporation formalities |
The formalities of incorporation consist of :
|
| Transfer of shares |
Except in the case of succession or transfer to a spouse or a relative up to and including the second degree, the transfer of shares to a third party may be subject to the company's approval by a clause in the articles of association.
The approval is deemed to be acquired in case of favorable answer or absence of answer in the 3 months following the approval request notification. |
Before discussing the constitution itself, a brief reminder of the different steps to create a PLC is necessary. To create a public limited company, one must go through a long series of administrative procedures and formalities.
Considering that you have already raised your share capital, you must then choose a corporate name that is the founding partners' responsibility.
A company name is a mandatory information mentioned in the company's articles of association.
Another important fact is that the founding partners must make sure that the name they have chosen does not correspond to any other name already in use at the level of OMPIC. To do so, they must obtain a negative certificate.
Finding a headquarter for a public limited company in Morocco is not a big deal.
If no contractual stipulation in the company's articles of association prohibits it a company can be domiciled at the domicile of its director. Suppose a special mention is present in the company's articles of association. In that case, the domiciliation at the director's place is valid only for a period of five years. You can also use the services of a domiciliation company that will take over many administrative tasks for you.
It is up to the founding partners to proceed with the drafting of the articles of association. They can call a professional for this task to ensure that there is no mistake or omission on it.
It is essential to underline that the articles of association of an PLC include a certain number of compulsory mentions written down. You must then draw up the subscription forms that, like the articles of association, are drawn up by law firms, accountants, or legal advisors. A subscription form signed by the subscribers is required as a supporting document.
Another critical step is the deposit of the amount of the paid-up capital. This fundamental step must be done within eight days as the reception of the funds by the company is sanctioned by a certificate of payment of the company's capital, delivered by a bank. To do this step, it is mandatory to open a new bank account.
To carry out this operation, the documents required are, among others, the articles of association, a negative certificate, the subscription forms as well as the identity documents. Please note that it is not the end of the process.
At this stage of the procedure, you still have to draw up the subscription or payment declarations, a specialty of trustees, legal advisors, accountants or notaries.
Then comes the filing of the deeds of creation and registration formality. It is done at the level of the Regional Direction of the taxes represented within the regional center of investment. The registration to the professional tax and obtaining a tax identifier is also done at the level of the Regional Direction of the taxes represented.
Before the official publication, the last step is to proceed to the application for registration in the trade register (fee: 350 MAD) and finally join the National Fund of Social Security of Morocco: the CNSS.
Let's talk about the functioning of the PLC and what it implies.
A company is made up of shareholders, and the minimum number is five for the PLC company. For a LLC that can be constituted from two partners or only one partner, the minimum number of shareholders to found a PLC is five because of its complex management, requiring a bigger group of people to represent the company.
Indeed, law 17-95 related to the limited liability companies foresees the acute conditions to which the limited liability companies must submit, holding the capital by at least five shareholders.
Suppose this number subsequently falls below this legal minimum. In that case, a judicial dissolution may be pronounced at the request of any interested party.
As in an LLC, the liability of the shareholders is limited. The latter only bear losses up to the amount of their contributions.
Divided into negotiable shares, the capital is fixed at 300,000 MAD without a public offering. It is higher in the case of a public offering, i.e. 3,000,000 MAD.
There are two types of shares: either shares of contribution in cash or in-kind, excluding any contribution in the industry. With a minimum value of 100MAD, the shares represent the share capital and can be registered or bearer.
The registered share is established in the name of the shareholder, who is registered in the share register. In contrast, the bearer share is said to be held anonymously by shareholders.
The public limited company can be established with a board of directors or with a management board and a supervisory board.
The board of directors must have at least three members, Moroccan or not, and can reach twelve persons for PLCs not making a public offering. And fifteen in the case of a public offering.
The directors are all shareholders. They must hold at least one share of the company. They are appointed for a term that cannot exceed six years unless otherwise stipulated in the company's articles of association. These directors may be legal entities; in this case, they must appoint a permanent representative to sit on their behalf.
The Board of Directors takes essential management decisions and commits the company. The chairman of the board of directors, appointed by the board, is necessarily a natural person and is vested with the broadest powers to act in the company's interest.
He can be dismissed at any time by the members of the board. As for the members of the board, they are dismissed by the general meeting.
The chairman of the board of directors can combine his function with the ones of the general manager. In this case, he is called Chairman and Chief Executive Officer (CEO).
This mode of operation of limited liability companies distinguishes management functions from control functions, even though the management board and its chairman have the same powers and responsibilities as the board of directors and its chairman.
The board of directors is a collegiate body; the articles of association determine the number of members. However, this number may not exceed five (or seven if the company makes a public offering).
The members of the board of directors may be taken from outside the shareholders.
This body is vested with the broadest powers to act in all circumstances on behalf of the company.
The supervisory board must be composed of at least three with a maximum of twelve members; this number is increased to 15 in companies whose shares are listed on the official stock exchange.
The members of the supervisory board must be shareholders and hold at least one share of the company.
The supervisory board elects from among its members a chairman and a vice-chairman who must be natural persons.
The supervisory board exercises permanent control over the management of the company.
Its decisions are taken by a majority of the members present or represented, unless the articles of association provide for a higher majority.
Due to its legal form, the PLC is subject to corporate income tax (CIT) according to the standard law regime through different grids:
It is 10% if the net profit is less than or equal to 300,000 MAD, 20% if the net profit is between 300,001 and 1,000,0000 MAD. For companies with a net profit between 1.000.0001 and 5.000.000 MAD, the tax is 30%. It is 31% for companies with a net profit of more than 5,000,000 MAD and 37% for credit institutions and insurance companies.
The advantages of a public limited company are various. Suppose you are a shareholder in an PLC. In that case, your liability for the company's debts is limited to the amount of your capital contribution.
Therefore, you do not have to bear the debts of the other shareholders. In addition to this security, the PLC offers the shareholder the possibility of withdrawing thanks to contractual flexibility quickly.
The PLC, a form adopted by companies with many shareholders, also provides solid guarantees to be used with investors and bankers.
Moreover, as we have already mentioned, a PLC can make a public call for savings if the capital is 3.000.000 MAD. Besides its numerous advantages, it is also necessary to note some disadvantages.
Despite its many advantages, the PLC, tailor-made only for large projects, excludes several categories of entrepreneurs.
The PLC is a complicated and cumbersome form of organization, requiring the appointment of an auditor and a large number of management bodies, which can make it difficult to operate.
The SAS is a corporate form for which two companies with a minimum capital of 2 million of Moroccan dirhams can opt to create or manage a common subsidiary or create a common parent company.
It is the most flexible form possible insofar as the shareholders freely agree on the articles of association' operating and organizational methods of the said company. Its president is designated in the articles of association. He commits the company even by his acts exceeding the corporate purpose, assuming that the third parties he has contracted were in good faith.
The capital fixed by the articles of association must be paid up in full as soon as the articles are signed.
A public limited company is made up of a minimum of five shareholders, unlike the LLC, which can be made up of two partners or a single partner.
The mode of governance of the PLC is declined in two formulas: a traditional format with a board of directors and a general manager or an alternative configuration with a management board and a supervisory board.
The capital of a PLC is fixed at 300.000 MAD without a public call for savings. It is more important in the case of a call for public savings, i.e. 3,000,000 MAD.
To create a public limited company, it is necessary to go through a long chain of steps and administrative formalities. Mainly used by companies listed on the stock exchange or entities carrying large-scale projects, the PLC offers increased security to its shareholders and more flexibility if they wish to withdraw.
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