Appointment of a statutory Auditor at the head of a small group in the event of loss of control of its subsidiary.
The French National Statutory Auditors committee (Commission Nationale des Commissaires aux Comptes – “CNCC”) has issued an opinion on the obligation to appoint a statutory auditor in a “small group” when the parent company loses control of its subsidiary(ies) (CNCC, EJ 2020-17, September 2023).
The head of a “small group” is not required to appoint a statutory auditor when it loses control of its subsidiary before the closing date used to determine whether the legal thresholds have been exceeded. In fact, according to the CNCC, a parent company is still required to appoint a statutory auditor if it loses control of its subsidiary (bringing it below the thresholds) only after the closing date of the reference financial year. Thus, if at the closing date the parent company no longer qualifies as the “head of a small group” (within the meaning of Article L. 823-2-2 of the French Commercial Code), the criteria for the legal obligation to appoint an auditor are not met, and the subsequent Annual General Meeting is not required to appoint an auditor. On the other hand, if the loss of control occurs after the balance sheet date and even before the annual meeting approving the annual accounts, an auditor must be appointed.
The CNCC takes this opportunity to point out that a loss of control that occurs once the statutory auditor has been appointed, will not allow the mandate to be terminated before it expires.
The COJRL legal team

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