Remedy your company's difficulties in time

Judicial safeguard procedure You are company director?

Have you noticed that your company is experiencing difficulties?

This newsflash is for you.

In fact, in order to protect yourself in advance, you can diagnose your difficulties early on, hoping for a more favorable outcome to the crisis by taking action as soon as the first signs of difficulty appear.

This prevention procedure, called judicial safeguard procedureThis involves presenting a draft rescue plan and taking initiatives to safeguard your business, enabling you to maintain your autonomy as a company director.

To qualify, the company director must file his or her application with the secretariat of the court clerk's office responsible for the location of the company's registered office.

The application must state the nature of the difficulties likely to jeopardize the company's continued operation, and must be accompanied by a number of supporting documents and a draft safeguard plan including all the commitments necessary to safeguard the company, the means of maintaining business, the arrangements for discharging liabilities and the guarantees granted for the execution of the said plan.

If the court decides to validate the safeguard plan, it sets a time limit for its implementation, which may not exceed five (5) years.

On the other hand, if the head of the company fails to meet the commitments set out in the plan, the court may, on its own initiative or at the request of an aggrieved creditor, and of course after hearing the head of the company and the trustee, decide to terminate the sauvegarde plan and consequently decide on either receivership or compulsory liquidation.

We will be happy to provide you with any further information you may require, or to assist you in carrying out this procedure.

Best regards,

Faithfully yours,

Ilham Taha-Bouamri
Chartered accountant and tax specialist

Share capital increase for a sarlau

Share capital increase for a SARLAU

In principle, a capital increase entails an amendment to the articles of association7. According to the first paragraph of article 77 of law no. 5-96, in the event of a capital increase, new shares may be paid up either: by contribution in cash or in kind; by set-off against liquid and due claims on the company; or by capitalization of reserves, profits or share premiums.

1. Capital increase through cash contribution :

A cash capital increase is an equity transaction whose purpose is to increase a company's share capital in exchange for a cash contribution from one or more individuals or legal entities (partners or third parties).

Cash capital increases in SARLs are governed primarily by articles 51 and 77 of Law 5-96. Under Moroccan law, the operation takes place in the following stages9:

➔ Check that the SARL's share capital has been paid up in full;

➔ Check that at least a quarter (or any proportion strengthened by the bylaws) of the amount of the capital increase is available from subscribers ;

➔ Analysis of the contractual documentation binding the company and associates (typically financing agreements and associates' pacts) to determine whether the capital increase operation does not require prior consents, which is not required in our case as it is a SARLAU.

➔ Valuation of the company in order to determine the terms of the capital increase (subscription price of newly-created shares, need for a share premium or not, etc.) ;

➔ Opening by the company of a blocked bank account ;

➔ Convocation of the Extraordinary General Meeting within the timeframe prescribed by the bylaws; ➔ Holding of the Extraordinary General Meeting to decide on and record the completion of the capital increase;

➔ Deposit of funds relating to the payment of new shares in the company's blocked bank account and obtain a certificate of blocking of funds ;

➔ Legalization of the minutes relating to the general meeting ;

➔ Complete tax registration formalities within 30 days ;

➔ Make the amending declaration to the trade register within 30 days; ➔ Publish the transaction in a legal gazette and the Bulletin officiel within 30 days.


2. Capital increase by offsetting liquid and due claims on the company:

From an economic point of view, the contribution of a receivable into a company's capital consists of "converting" a current account receivable into share capital. In accounting terms, the company's debt is thus transformed into equity (share capital), enabling it to post healthier accounts by raising its level of equity. For this to be possible, the current account receivable must be certain, liquid and due.

Law no. 5-96 requires only a statement of account for an increase by offsetting against debts, without any further clarification. For example, art. 77, para. 2 stipulates: "If the new shares are paid up by offsetting against the company's debts, these debts shall be the subject of a statement of account drawn up by the manager and certified as accurate by a chartered accountant or by the company's statutory auditor, as the case may be".

It should be noted, however, that under French law, the operation of increasing the share capital by offsetting it against receivables takes place in the following stages:

➔ the company's general meeting will decide on a cash capital increase, this decision will have to clearly state that the subscription can be made by offsetting against any existing debt ;

➔ The company director must draw up a statement of account for the receivable. This statement must be certified as accurate by the statutory auditor if there is one; (by a chartered accountant under Moroccan law).

➔ the partner concerned will sign a subscription form indicating that he is subscribing to the shares issued and that he is paying up the amount of his subscription by offsetting it against his receivable ;

➔ the paying-up of shares will be evidenced by a certificate drawn up, either by the company's statutory auditor, or by a notary (particularly if there is no statutory auditor) ;

➔ it may then be noted that the capital increase has been completed.

SHARE CAPITAL INCREASE FOR A SARLAU

3.combine the two increases on the EGM minutes No legal provision expressly regulates the cumulative use of the two means of capital increase, either in Moroccan law or in comparative law. It is assumed that opting for both means of capital increase will simply entail the obligation to deposit the funds in a blocked bank account and obtain a blocking certificate, and to have the receivables approved by a chartered accountant, so the procedure will be as follows:

➔ First: Provide proof of paid-up capital

◆ If in cash: Deposit the funds in a blocked bank account and obtain a blocking certificate ;

◆ If by offsetting receivables: Arrest the receivables by the management and have it certified by a chartered accountant (or the CAC if there is one) ;

➔ Secondly: Hold an Extraordinary General Meeting with a capital increase on the agenda;

➔ Then: sign, legalize and register the minutes of the EGM;

➔ After that: The minutes of the EGM are filed with the Clerk of the Commercial Court;

➔ In addition, Complete the amending declaration of the commercial register ;

➔ Next, Make the publication in a newspaper of legal announcements ;

➔ Finally, Make publication in the B.O ;

 

Our legal and tax team will be happy to provide you with any further information you may require on increasing the share capital of a SARLAU.

Faithfully yours,

Ilham Taha-Bouamri
Chartered accountant and tax specialist

Procedure for registering an immovable property

The procedure for registering real estate property is an administrative procedure that allows you to register your property in registers known as "titres fonciers". If your property, whether land or building, has not been registered, the law considers it to be land without a master.

The law on land registration gives as a privilege to the registration of a property, the effect of purge giving rise to the establishment of a land title which cancels all previous titles and/or rights not mentioned therein. The land register therefore acts as the identity of the title.

As mentioned in the definition, the procedure for registering a real estate property involves a series of formalities that must be completed:

 

1-Request deposit
The application for registration may only be filed by the owner or co-owner, the usufructuary, the long leaseholder or holder of a surface right, the beneficiary of land easements with the owner's consent, the creditor who has not paid when due and who may, with a court order, obtain a seizure of the property and apply for registration, and the legal representative of an incapable person or a minor.

The application must be accompanied by any document showing the right of ownership, and sent to the land registry according to the applicant's instructions and in the light of any other topographical document.

After reviewing and approving the application, and paying the land registry fee, the requisition is registered, and a summons is issued to the applicant setting the date and time of the demarcation operations..

 

2-Boundary marking operations
Boundary marking consists of delimiting the property of the person who has made the requisition request. It is carried out by a surveyor-topographer in the presence of the applicant or his representative and the interested parties at the date and time set.

They then draw up a report of their operations, signed by the claimant or his representative and the interested parties, on the date and at the time set. They then plant metal stakes or cement blocks to recognize the property.

 

3- Land surveying and mapping
The surveying operation consists in precisely determining the boundaries, the base and the consistency of the property.

This operation is completed with the drawing up of the final land plan, which is then sent to the land registry, together with the land registry slip.

4- Publication and posting of the boundary closure notice
On receipt of the boundary plan, the registrar publishes a notice of boundary closure in the official bulletin and posts it at the offices of the Court of First Instance, the Local Authority and the Communal Council, where the property concerned is located.

The notice stipulates that for a period of two (02) months from its publication in the official bulletin, objections to the registration will be received at the land registry of the authorities concerned.

5-Opposition to a registration procedure
Opposition to a registration procedure can take place :

- in the event of a dispute over the existence or extent of ownership rights,
- in the event of a dispute over property boundaries,
- in the event of a claim to the exercise of a real right, likely to be registered on the land title to be drawn up.

6-Curator's decision: Registration
Registration is the final step in the process of registering a property.

Having ensured that all the formalities required by law have been completed, that the application is in order, that the documents submitted are sufficient and that no objections have been lodged, the registrar can now register the property and draw up the land title in the owner's name.

Our team is at your disposal to help you carry out these operations.

 

Faithfully yours,

Ilham Taha-Bouamri
Independent chartered accountant and tax specialist