- Issuing preference shares (actions de préférence) to named persons requires the appointment of a special benefits auditor (commissaire aux avantages particuliers) (Art. L.228-15 French Commercial Code).
- It must be a statutory auditor with no engagement in the company in the past three years, nor during its engagement: the statutory auditor in office cannot act.
- Its report is held at the registered office and filed with the registry at least eight days before the general meeting (Art. R.225-136).
- Beneficiaries do not vote on the resolution.
- Price from €1,040 excl. VAT.
Preference shares have become the standard tool for funding rounds and management arrangements: priority dividend, liquidation preference, double or no voting rights, enhanced information rights, performance shares convertible on set criteria. As soon as they are reserved to identified persons, the law requires an independent practitioner to describe and assess the benefit granted, under its own responsibility. That is the role of the special benefits auditor.
When is this report mandatory?
Article L.228-15 of the French Commercial Code applies the rules on special benefits (Art. L.225-8, L.225-14, L.225-147 and L.225-148) to the creation of preference shares where the shares are issued to one or more named shareholders. The beneficiaries may be existing shareholders or third parties. The rule applies to the SA (public limited company), the SCA (partnership limited by shares) and the SAS (simplified joint-stock company), including the SASU (single-shareholder SAS), by cross-reference in Article L.227-1.
Typical situations are:
- entry of an investor with preference shares carrying a liquidation preference;
- grant of performance preference shares to a manager or to a management team;
- conversion of ordinary shares held by certain shareholders into preference shares;
- creation of preference shares on incorporation, for a named founder.
For the SAS, the Cour de cassation held that the special benefits procedure already applied before Act no. 2019-744 of 19 July 2019 (Cass. com., 13 March 2024, no. 22-12.205): an earlier irregular issue may therefore still be challenged.
When the special benefits auditor is not involved
- Existing class: where the issue concerns preference shares of an existing class, the assessment of the benefits is included in the statutory auditor's special report provided for in Article L.228-12 (Art. L.228-15, last paragraph).
- Non-reserved issue: if the preference shares are offered to all shareholders without naming anyone, the special benefits procedure does not in principle apply. Your lawyer will check this against the wording of the resolutions.
- SARL (private limited company): it does not issue shares. A prior conversion into an SAS is required, with a conversion auditor (commissaire à la transformation).
What the special benefits auditor checks
The auditor assesses, under its own responsibility, the nature and value of the benefit. Its report:
- describes precisely the rights attached to the preference shares, based on the draft articles of association and resolutions;
- identifies the named beneficiaries;
- assesses the value of the benefit: dividend differential, liquidation preference, effect of a ratchet or a conversion, using appropriate methods and documented scenarios;
- measures the effect on the other shareholders, particularly in terms of dilution and allocation of the price on a sale;
- concludes on the presentation of the benefit and on its value.
The report does not give a view on whether the transaction is advisable: the decision belongs to the shareholders, who vote with full knowledge. If the general meeting reduces the benefit, the express approval of the beneficiaries is required.
The engagement, step by step
- Quote: you send the draft term sheet or articles of association. Written reply within 24 working hours.
- Engagement letter: we confirm the absence of any engagement in the company in the past three years, then the letter is signed.
- Appointment: by unanimous decision of the shareholders (sole shareholder's decision in an SASU) or, failing that, by order of the president of the competent commercial court or economic activities court.
- Documents: draft articles of association, resolutions, shareholders' agreement, agreed valuation.
- Procedures: legal analysis of the rights, modelling of the value of the benefit, discussions with your lawyer on drafting.
- Signed report: within 48 hours of receiving the complete file in most cases; 5 to 7 days for an SA or a complex file.
- Filing at the registered office and with the registry, at least eight days before the general meeting.
- EGM: vote without the beneficiaries, then formalities: articles of association, legal notice, INPI one-stop formalities portal.
Timeline and legal deadlines
| Step | Deadline | Legal basis |
|---|---|---|
| Appointment of the auditor | Before any work; unanimity or court order | Art. L.225-147 and L.228-15 French Commercial Code |
| Independence | No engagement in the company during the previous three years | Art. L.228-15 French Commercial Code |
| Report filed at the registered office and with the registry | At least 8 days before the EGM | Art. R.225-136 French Commercial Code |
| Notice of the EGM (SA) | At least 15 days on first notice | Art. R.225-69 French Commercial Code |
| Notice of the EGM (SAS) | Period set by the articles of association | Art. L.227-9 French Commercial Code |
| Amendment formalities | Within one month of the decision | INPI one-stop portal |
The eight-day period cannot be shortened, even where all shareholders agree. In practice, the report must therefore be signed no later than D-9 before the general meeting. For a timeline built back from your EGM date, see the timeline page or our guide on the timeline of share capital transactions.
Documents to provide
- Current articles of association, Kbis extract (company registration certificate) and capitalisation table.
- Draft amended articles of association describing the class of preference shares.
- Draft resolutions and report of the president or the board.
- Term sheet, shareholders' agreement and, where relevant, the management allocation plan.
- Latest annual financial statements and recent interim figures.
- Valuation agreed for the transaction (pre-money) and the underlying business plan.
- List of engagements entrusted to statutory auditors over the past three years.
How much does a special benefits auditor cost?
The engagement is offered from €1,040 excl. VAT. The price varies with:
- the number of classes of preference shares and of beneficiaries;
- the complexity of the rights: multiple liquidation preference, ratchet, conditional conversion;
- the legal form (SA or SAS) and any concurrent contribution in kind;
- the need for a report on the waiver of preferential subscription rights (from €380 excl. VAT).
The simulator on the pricing page gives an immediate estimate; the quote fixes the price before any commitment.
Your funding round includes reserved preference shares: appoint an independent special benefits auditor, written reply within 24 working hours.
Frequently asked questions
Can my company's statutory auditor act as special benefits auditor?
No. Article L.228-15 of the French Commercial Code requires a statutory auditor that has carried out no engagement for the company in the previous three years and carries out none during its engagement.
Can an SASU issue preference shares to a third party?
Yes. If the preference shares are issued to one or more named persons, whether or not they are already shareholders, the special benefits procedure applies, including in an SASU.
Is a special benefits auditor needed to issue shares of an existing class?
No. For a class that has already been created, the assessment of the special benefits is included in the statutory auditor's special report provided for in Article L.228-12 of the French Commercial Code.
Can the beneficiary of the preference shares vote on the resolution?
No. The beneficiary of the special benefit does not take part in the vote, and its shares are not counted for the quorum and majority.
Can an SARL issue preference shares?
No. An SARL issues membership interests (parts sociales), not shares. A company wishing to organise preferential rights through preference shares first converts into an SAS or SA.
Can the same auditor issue the report on the waiver of preferential subscription rights?
These are two separate reports. Depending on the circumstances, particularly if the company already has a statutory auditor, two different practitioners may be required. We check this at the diagnostic stage.
Registered statutory auditor (CRCC Paris), qualified French chartered accountant. He personally signs the firm's reports.
Sources and legal texts
- Lebouard Avocats – Special benefits auditor and preference shares
- Gazette du Palais, 11 June 2024 – Special benefits procedure and preference shares (Cass. com., 13 March 2024, no. 22-12.205)
- Lefebvre Dalloz Formation – How the PACTE Act modernises the preference share regime
- Registry of the Paris Economic Activities Court – Appointment of a contribution auditor
- Bulletin Joly Sociétés, 2025 – Revisiting the concept of special benefit in company law
Article up to date as at 8 October 2026, for general information only. It does not replace the review of your file by your lawyer or by the firm. Sources are in French.