Annual Report 2017

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54 Rothschild & Co | Annual Report 2017
Information on the Company and share capital
1 Overview of the Company
1.1 Legal form
Rothschild & Co was converted into a French partnership limited by shares
(société en commandite par actions or SCA) by decisions of the General
Meeting of shareholders on 8 June 2012, which approved a reorganisation
of the Group(1) that constituted a major step forward in its ongoing
international expansion and in the simplification of its structure.
One of these reorganisation stages consisted of converting the Company’s
form of incorporation into a partnership limited by shares to ensure the
commitment and control of the Rothschild family over the long-term, leading
to changes in the Company’s structure and governance.
This legal form is based on two categories of partners: the General Partners,
with the status of “commerçant”, who have an active role in the Company’s
business and are jointly and severally liable for the Company’s debts,
and the Limited Partners (also called shareholders), who are not actively
engaged in the Company’s business and whose liability is limited to the
amount of their investment.
1.2 General Partners
1.2.1 General Partners designated by the articles
of association
The Company’s General Partners were designated in the articles of
association when the Company was converted into a partnership limited
by shares on 8 June 2012. They are controlled by members of the French
and English branches of the Rothschild family:
• Rothschild & Co Gestion, a French simplified joint-stock company (SAS)
with share capital of €60,000, and whose registered office is at 3 rue de
Messine, 75008 Paris (to which the articles of association also confer
the role of Managing Partner), and
• Rothschild & Co Commandité, a French simplified joint-stock company
(SAS) with share capital of €60,000, and whose registered office is at
3 rue de Messine, 75008 Paris.
The General Partners have unlimited joint and several liability for the
Company’s debts. However, they shall be held liable only if the creditors
have already issued the Company with a formal demand by extrajudicial
instrument to settle its debts.
Losses shall be divided between the General Partners in equal shares (50%
for Rothschild & Co Commandité and 50% for Rothschild & Co Gestion).
However, in the event of an annual distributable profit, a profit share
(dividende préciputaire) equal to 0.5% of the said annual distributable profit
is allocated automatically to the General Partners who held such position
during the year in question, and is distributed between them in the same
proportions as the distribution of losses specified above. However, in the
event that the status of General Partner is lost during the course of that
year, the remuneration of the Partner in question in respect of that year will
be calculated on a pro-rata basis and the remainder shall be distributed
between the other General Partners.
1.2.2 Powers of the General Partners
The General Partners have the power to appoint or revoke the Company’s
Managing Partner at any time, except for Managing Partners appointed
under the Company’s articles of association for which an approval from
the Extraordinary General Meeting of shareholders is also required.
In the event of a cessation of duties of the Company’s Managing Partner,
the General Partners shall manage the Company pending the appointment
of one or more new Managing Partners under the terms and conditions of
the articles of association.
Under the provisions of the law, no decision is valid unless approved by
both General Partners, except for the following decisions for which legal
provisions expressly exclude General Partners’ votes: vote on all resolutions
proposed to the General Meeting of shareholders, except the appointment
of members of the Supervisory Board, the appointment and dismissal of
the Statutory Auditors, the distribution of dividends for the year and the
approval of regulated agreements and commitments. Also, pursuant to
Article 11.3 of the Company’s articles of association, any transaction
whose purpose or effect could fundamentally call into question the Group’s
independence, tradition of excellence, links to the Rothschild family or
the role played by the Rothschild family, its use of the Rothschild name
or the fact that the Group’s main activities are financial activities must be
approved by the General Partners, including when such transactions do
not require authorisation from a General Meeting of shareholders.
1.2.3 Decision-making process
The General Partners take decisions at the Managing Partner’s discretion
at a General Meeting or by written consultation. Whenever a decision
requires the approval of the General Partners and the General Meeting
of shareholders, pursuant to the law or the memorandum and articles of
association, the Managing Partner collects the General Partners’ votes,
in principle, before the General Meeting of shareholders and, in any event,
no later than the close thereof.
Decisions or proposals that fall within the remit of the General Partners
shall be adopted unanimously, except if the Company is converted to a
French limited company (société anonyme) or a French limited liability
company (société à responsabilité limitée ) which only requires a majority
of the General Partners.
1.3 Limited Partners (shareholders)
1.3.1 General presentation
The Limited Partners contribute capital and have therefore the status
of “shareholders”.
They do not take an active part in the Company’s day-to-day operations
but take decisions including, but not limited to the:
• appointment of the Supervisory Board members, who must be selected
from among the Limited Partners, and the Statutory Auditors;
• vote on the accounts approved by the Managing Partner; and
appropriation of the income of the financial year (including the
distribution of dividends);
• approval of the regulated agreements;
• advisory opinion on the Managing Partner’s remuneration;
• modification of the articles of association; and
• delegation of authority relating only to a share capital increase.
(1) Detailed information on the Company’s reorganisation is provided in the Document E filed with the AMF on 16 May 2012 under registration No. E.12-019 and attached to the Executive Board’s report
presented to the General Meeting of shareholders on 8 June 2012. These documents are available on Rothschild & Co’s website .