This invalidity can not be set up against third parties by the members of the company.

ART. 8. When the company is rendered invalid in the terms of the preceding article, the members of the first committee of supervision may be declared liable, with the manager, for the damage resulting to the company or to third parties from the invalidation of the company.

The same liability may be declared as against those of the stockholders whose "apport" or special privileges have not been verified and approved in conformity with article 4 above quoted.

An action to invalidate a company or the acts and resolutions subsequent to its constitution is no longer admissible when before the action is instituted the ground for its invalidity has ceased to exist. The action for liability for the acts from which its invalidity resulted ceases to be admissible when before the institution of the action the ground of its invalidity has ceased to exist and in addition a period of 3 years has elapsed since the day when the invalidity was incurred.

If for the purpose of remedying the irregularity a general meeting should be called, the action to invalidate shall no longer be inadmissible from the date of the regular convening of this meeting.

These actions to invalidate the constitutive deeds of companies are statute barred by 10 years.

This limitation can not, however, be set up before the expiration of the 10 years which shall follow the promulgation of the present law.

(The last 4 paragraphs of this article were added by the law of August 1, 1893. ) ART. 9. The members of the committee of supervision incur no liability by reason of the acts of the management and of their consequences.

Each member of the committee of supervision is liable for his personal faults in the performance of his duties in conformity with the rules of common law.

ART. 10. The members of the committee of supervision verify the books, the cash, the securities and investments of the company.

They shall make a report every year to the general meeting, in which they shall point out the irregularities and inaccuracies which they have discovered in the inventories, and set forth in full the reasons which constitute objections to the distribution of dividends proposed by the manager.

No action for recovery of dividends can be directed against stockholders except in the case where distribution shall have been made without any inventory or independently of the results set forth in the inventory.

The action for recovery, in case it is competent, is statute barred by 5 years from the date fixed for the distribution of dividends.

The periods of limitation which have begun to run at the time of promulgation of the present law and which still require for their completion, in accordance with prior legislation, more than 5 years from the same period shall be completed by the lapse of this period.

ART. 11. The committee of supervision may convene the general meeting and, according to its advice, bring about the dissolution of the company.

ART. 12. Fifteen days at least before the general meeting every stockholder may inspect at the office of the company, either in person or through an attorney in fact, the balance sheet, the inventories, and the report of the committee of supervision. ART. 13. The issuing of shares or of coupons of shares of a company constituted in contravention of the provisions of articles 1, 2, and 3 of the present law shall be punished by a fine of from 500 to 10,000 francs.

The following persons shall incur a similar penalty:

The manager (gérant) who begins corporate business before the committee of supervision has entered upon its duty.

Those who, presenting themselves as owners of shares or of coupons of shares which do not belong to them, have fraudulently created a fictitious majority in a general meeting without prejudice of damages in case of need as toward the company or toward third parties.

Those who have delivered shares for the purpose of making a fraudulent use thereof. In the cases mentioned in the two preceding paragraphs, the penalty of imprisonment of 15 days to 6 months may also be pronounced.

ART. 14. Negotiations of shares or of coupons of shares the value or the form of which shall be contrary to the provisions of articles 1, 2, and 3 of the present law, or in regard to which payment of one-quarter shall not have been effected in conformity with article 2 of the present law, shall be punished by a fine of 500 to 10,000 francs. All participation in these negotiations and any publication of the value of the said shares shall be punished by the same penalty.

ART. 15. The following persons shall incur the penalties set forth in article 405 of

the penal code without prejudice to the application of this article to all the elements constitutive of the offense of obtaining money under false pretenses (escroquerie): Those who by simulation of subscriptions or payments or by publication, with intent to deceive, of subscriptions or payments which do not exist, or by any other false statement have obtained or endeavored to obtain subscriptions or payments.

Those who, in order to induce subscriptions or payments, publish with intent to deceive the names of persons designated, contrary to the truth, as being or about to be connected with the company in any capacity whatsoever.

Managers who in the absence of an inventory, or by means of a fraudulent inventory, have distributed among the shareholders fictitious dividends.

The members of the committee of supervision are not liable in damages for the offenses committed by the manager.

ART. 16. Article 463 of the penal code is applicable to the acts mentioned in the three articles which precede.

ART. 17. Stockholders representing one-twentieth at least of the stock capital may, in the common interest, appoint at their cost one or more attorneys in fact to sustain, either as plaintiffs or as defendants, an action against the managers or against the members of the committee of supervision, and to represent them in such case before the courts without prejudice to the action which each stockholder may bring individually in his own personal name.

ART. 18. Companies existing prior to the law of July 17, 1856, and which have not complied with article 15 of that law, shall be bound within a period of 6 months to constitute a committee of supervision in conformity with the foregoing provisions. In case the committee of supervision is not constituted within the period above fixed, any shareholder has the right to have the company dissolved.

ART. 19. Stock companies (commandite) prior to the present law, the by-laws of which permit of their being converted into a corporation authorized by the Government, may be converted into corporations (sociétés anonymes) according to the provisions laid down in Title II of the present law, by complying with the conditions stipulated in the by-laws for such conversion.

ART. 20. The law of July 17, 1856, is repealed.

II.—LIMITED LIABILITY COMPANIES (SOCIÉTÉS ANONYMES).

ART. 21. Henceforward limited liability companies may be formed without the authorization of the Government.

Whatever be the number of parties interested, they may be formed by a deed under private signature executed in duplicate original.

They are subject to the provisions of articles 29, 30, 32, 33, 34, and 36 of the code of commerce and to the provisions contained in the present title.

ART. 22. These companies are managed by one or several representatives (directors) appointed for a definite period revocable, salaried or not, chosen from among the stockholders.

These representatives may choose among themselves a manager, or, if the by-laws permit it, substitute for themselves a representative, not a member of the company, and for whose acts they are responsible toward it.

ART. 23. The company can not be formed if the number of shareholders is less than 7. ART. 24. The provisions of articles 1, 2, 3, and 4 of the present law are applicable to limited liability companies.

The declaration enjoined upon the manager by article 1 is made by the founders of a limited-liability company. It is submitted with documents in support thereof to the first general meeting, which verifies its accuracy.

ART. 25. A general meeting is in every case convened at the instance of the founders subsequent to the deed which sets forth the subscription of the share capital and the payment of one-quarter of the capital which consists of cash. This meeting appoints the first directors; it appoints also for the first year the auditors provided for by article 32 of the present law.

These directors can not be appointed for more than 6 years; they are reeligible unless otherwise provided.

They may, however, be appointed by the by-laws with a formal proviso that their appointment shall not be subject to the approval of the general meeting. In such case they can not be appointed for more than 3 years.

The minute of the meeting shall record the acceptance of the directors and of the auditors present at the meeting.

The company is constituted as from this acceptance.

ART. 26. The directors must be owners of a number of shares determined by the by-laws.

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These shares are appropriated in full to guarantee the acts of the management, even those acts which are exclusively personal to one of the directors.

They are registered in the name of the holder, inalienable and marked with a stamp indicating their inalienable character, and deposited in the company's safe. ART. 27. A general meeting is held at least once a year at a period fixed by the by-laws. The by-laws determine the number of shares which it is necessary to possess, either as owner or as proxy, to be admitted to the meeting, and the number of votes belonging to each shareholder by reference to the number of shares of which he is the holder.

All the owners of a number of shares below that prescribed for admission to the meeting may combine to form the necessary number and appoint a representative among their number.

Nevertheless, in general meetings held to verify the "apport," to appoint the first directors, and to verify the accuracy of the declaration of the founders of the company prescribed by the second paragraph of article 24, every shareholder, whatever the number of shares of which he is the holder, may take part in the proceedings with a number of votes determined by the by-laws, not exceeding 10.

ART. 28. In all the general meetings resolutions are voted by a majority of votes. A list of members present is drawn up, which contains the names and the residences of the shareholders and the number of shares of which each of them is holder.

This list, certified by the committee of the meeting, is placed on file at the company's offices and is open to inspection by anyone calling for it.

ART. 29. General meetings which are called to transact business in cases other than those provided for by the 2 articles which follow must be composed of a number of shareholders representing one-quarter at least of the share capital.

If the general meeting does not unite this number, a new meeting is convened in the forms and within the periods prescribed by the by-laws, and such meeting can proceed to the valid transaction of business, whatever be the proportion of capital represented by the shareholders present.

ART. 30. The meetings which are called to vote upon the verification of the "apports," the appointment of the first directors, the accuracy of the declaration made by the founders in the terms of paragraph 2 of article 24, must be composed of a number of shareholders representing one-half at least of the share capital. The share capital, one-half of which must be represented for the verification of the "apport," shall be composed only of shares not subject to verification.

If the general meeting does not comprise a number of shareholders representing one-half of the share capital, only a provisional vote can be taken. In such case a new general meeting is convened. Two notices published at 8 days' interval at least a month in advance in one of the journals appointed to receive legal announcements, acquaint the shareholders with the provisional resolutions adopted by the first meeting, and these resolutions become final if they are approved by the new meeting composed of a number of shareholders representing one-fifth at least of the share capital. ART. 31. Meetings which are called to vote upon changes in the by-laws or proposals for continuation of the company beyond the period fixed for its duration, or its dissolution before this period, are only validly constituted and can transact valid business only when they are composed of a number of shareholders representing one-half at least of the share capital.

ART. 32. The annual general meeting designates one or more auditors, whether shareholders or not, whose duty is to make a report to the general meeting of the following year, on the situation of the company, the balance sheet, and the accounts presented by the directors.

The resolution containing approval of the balance sheet and the accounts is void unless it has been preceded by the report of the auditors.

If the auditors shall not have been appointed by the general meeting, or in case one or more of the auditors appointed refuses or is unable to act, they are appointed or the vacancies in their numbers filled by an order of the president of the tribunal of commerce of the place where the company's officers are situated, upon the application of any interested party and with due notice to the directors.

ART. 33. During 3 months prior to the period fixed by the by-laws for the general meeting the auditors are entitled, whenever they think proper, in the interests of the company, to inspect the books and examine the transactions of the company. ART. 34. Every limited liability company shall draw up every 6 months a summary statement of its assets and liabilities. This statement is placed at the disposal of the auditors.

An inventory shall also be made every year in conformity with article 9 of the code of commerce, containing a list of the real and personal securities and the credits and debts of the company.

This inventory, balance sheet, and profit and loss account are placed at the dis

posal of the auditors on the fortieth day at latest before the general meeting. They are submitted to this meeting.

ART. 35. Fifteen days at least before the general meeting any shareholder may, at the offices of the company, inspect the inventory and the list of shareholders and obtain a copy of the balance sheet resuming the inventory, and of the report of the auditors.

ART. 36. An annual deduction of one-twentieth at least is made from the net profits and appropriated to the formation of the reserve fund.

This deduction ceases to be obligatory when the reserve fund reaches one-tenth of the share capital.

ART. 37. In case of loss of three-quarters of the share capital, the directors are bound to convene a general meeting of all the shareholders to vote upon the question whether the company shall be dissolved.

The resolution of the general meeting is in all cases made public.

In case the directors neglect to convene the general meeting, and also in case this meeting shall not have been regularly constituted, any interested party may apply to the court for the liquidation of the company.

ART. 38. The liquidation may be ordered upon the application of any interested party when one year has elapsed since the period when the number of shareholders has become reduced to less than seven.

ART. 39. Article 17 is applicable to limited liability companies.

ART. 40. It is forbidden to the directors to take or to preserve direct or indirect interest in an undertaking or contract made with the company or for its account unless they are authorized to do so by the general meeting.

Every year a special account is furnished to the general meeting of the execution of contracts or undertakings authorized by it within the terms of the preceding paragraph.

ART. 41. Any limited liability company in regard to which the articles 22, 23, 24, and 25 of this law have not been observed is void and of no effect.

ART. 42. When the company or its acts and resolutions have been declared void within the terms of the preceding article, the founders who are responsible for its invalidity and the directors in office at the time when is was incurred are jointly and severally liable toward third parties and toward shareholders for the damage resulting from this invalidity.

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The same joint and several liability may be declared against those of the shareholders whose apports," or special privileges, shall not have been verified and approved according to article 24.

The action to invalidate and the action for liability resulting therefrom are subject to the provisions of article 8 of this law.

ART. 43. The extent and the effects of the liability of the auditors toward the company are ascertained in accordance with the general principles of the contract of agency.

ART. 44. The directors are liable in conformity with the rules of common law, individually or jointly and severally according to circumstances, toward the company or toward third parties, either for infringements of the provisions of the present law or for acts of negligence committed by them in their management, and in particular in distributing, or permitting to be distributed without protest, fictitious dividends.

ART. 45. The provisions of articles 13, 14, 15, and 16 of the present law are applicable in the case of limited liability companies without distinction between those which are now in existence and those which shall be formed under the authority of the present law. The directors who, without an inventory or by means of a fraudulent inventory, have declared fictitious dividends shall be punished by the penalty enacted in such case by paragraph 3 of article 15 against the managers of " commandite" companies.

The provisions of the last three paragraphs of article 10 are also applicable as regards limited liability companies.

ART. 46. Limited liability companies now existing shall continue to be subject throughout their whole duration to the provisions which now govern them.

They may be converted into limited liability companies, according to the terms of the present law, by obtaining the authorization of the Government and observing the forms prescribed for changing their by-laws.

ART. 47. Companies with limited liability may convert themselves into "sociétés anonymes" (limited liability companies), within the terms of the present law, by complying with the conditions stipulated for the modification of their by-laws.

Articles 31, 37, and 40 of the code of commerce and the law of May 23, 1863, on limited liability companies are repealed.

III.-COMPANIES WITH VARIABLE CAPITAL.

ART. 48. It may be stipulated in the by-laws of any company that the share capital shall be susceptible of increase by successive payments made by the shareholders or the admission of new shareholders, or of reduction by the total or partial withdrawal of the sums contributed.

Companies whose by-laws contain the above stipulation shall be subject, independently of the general rules which govern them according to their special form, to the provisions of the following articles.

ART. 49. The share capital may not be fixed by the constitution of the company at a larger sum than 200,000 francs. It may be increased by resolutions of the general meeting voted from year to year; each increase shall not exceed 200,000 francs.

ART. 50. The shares or coupons of shares shall be inscribed with the names of the holders even after they are fully paid up. They shall be negotiable only after the final constitution of the company. Their negotiation can only take place by way of transfer on the registers of the company, and the by-laws may grant either to the board of directors or to the general meeting the right of objecting to a transfer. ART. 51. The by-laws shall fix a sum below which the capital may not be reduced by withdrawal of shares authorized by article 48.

This sum shall not be inferior to one-tenth of the share capital.

The company shall not be finally constituted until after payment of one-tenth. ART. 52. Any shareholder may withdraw from the company when he pleases in default of an agreement to the contrary, and subject to the operation of paragraph 1 of the preceding article.

It may be stipulated that a general meeting may have the right of deciding by the majority fixed for a modification of the by-laws that one or more of the shareholders shall cease to belong to the company.

The shareholder who shall cease to belong to the company shall, of his own accord or by a decision of the general meeting, be bound during 5 years toward the shareholders and toward third parties for all liabilities existing at the time of his withdrawal.

ART. 53. The company, whatever its form, shall be validly represented in courts of justice by its directors.

ART. 54. The company shall not be dissolved by death, withdrawal, lunacy, bankruptcy, or insolvency of any one of the shareholders. It shall continue as a matter of course between the other shareholders.

IV. PROVISIONS RELATING TO THE PUBLICATION OF COMPANY DEEDS.

ART. 55. Within a month from the constitution of every commercial company, a counterpart of the deed of constitution, if it is under private signature, or a certified copy, if it is notarial, shall be filed in the clerk's office of the justice of the peace of the tribunal of commerce at the place where the company is established.

There shall be annexed to the deed of constitution of "commandite" share companies and limited liability companies: (1) A certified copy of the notarial deed setting forth subscription of the share capital and the payment of one-quarter; (2) a certified copy of the resolutions voted by the general meeting in the cases provided for by articles 4 and 24.

Furthermore, in case the company is a limited liability company, there shall be annexed to the deed of constitution a list of names of the subscribers, duly certified, containing the names, surnames, Christian names, occupations, residence, and the number of shares belonging to each of them.

ART. 56. Within the same period of one month an extract from the deed of constitution and the annexed documents shall be published in one of the journals appointed to receive legal announcements.

This publication shall be proved by a copy of the journal, certified by the printer, legalized by the mayor, and registered within 3 months of its date.

If the formalities prescribed by the preceding article and by the present article are not observed, the company is void as regards the parties interested, but the inobservance of any one of them shall not be set up against third parties by the shareholders. ART. 57. The extract shall contain the names of the parties interested other than the shareholders (or "commanditaires"); the commercial name or denomination adopted by the company and its business address; the names of the shareholders authorized to manage, administer, and sign for the company; the amount of the share capital and the amount of property brought in or to be brought in by the shareholders (or "commanditaires"); the date when the company begins; the date when it ends, and the date of the publication made in the clerk's office of the justice of the peace in the tribunal of commerce.

ART, 58. The extract shall declare that the association is a private partnership or