The mixed economy public limited company (SAEM or SEM) holds a unique position in French law: it combines public and private capital within a public limited company whose purpose falls within the local public interest. Its creation is not limited to registering a classic SA. The legal framework imposes specific constraints on capital distribution, governance, and the control exercised by the shareholder local authorities.
Legal personality and single window: what has changed for establishing a SEM
Two recent developments concretely modify the establishment phase of a SEM. Since July 5, 2024, Article 1842 of the Civil Code specifies that companies enjoy legal personality from the moment of their registration in the trade and companies register. For a SEM established as an SA, this clarification secures the period between the signing of the bylaws and registration: the company can only enter into acts in its own name after registration.
Before this date, practice relied on the mechanism of “company in formation,” which created legal uncertainties regarding the validity of commitments made (loans, leases, service contracts). The amendment to Article 1842 makes this point indisputable.
Furthermore, since January 1, 2023, Article L123-33 of the Commercial Code imposes a logic of unique declaration via a centralized window. Any business creation, including a SEM, now goes through this window for registration, tax, and social declaration formalities.
This centralization reduces back-and-forth between registries, tax services, and social organizations. For local authorities wishing to create a mixed economy public limited company, the administrative procedure is thus simplified, even if the political and financial complexity of the setup remains intact.
Share capital and shareholder distribution of a SEM: the rules of the general code of local authorities
The SEM is an SA, which implies a minimum share capital of 37,000 euros divided into shares. In practice, projects for the development or management of local public services require a capital significantly higher to substantiate the business plan to banks and private partners.
The peculiarity lies in the distribution of capital. The general code of local authorities mandates that local authorities hold between 50% and 85% of the capital. This floor guarantees public control. The ceiling of 85% preserves the participation of private shareholders, a sine qua non condition for the “mixed” nature of the company.
The calibration of share capital constitutes one of the most sensitive negotiations prior to creation:
- A capital that is too low weakens the financial structure and complicates access to bank credit, especially for development or construction operations.
- A capital that is too high may deter private partners, especially if the projected profitability of the project remains uncertain.
- The allocation between cash contributions and contributions in kind (land, buildings, equipment) must be validated by a contribution auditor, as for any SA.
Preliminary financial studies (business plan, cash flow plan, financing plan) directly condition the amount retained. The Federation of Epl recommends conducting these studies in parallel with market analysis, rather than afterward.
Governance of a SEM: board of directors and control by local authorities
The SEM operates with a board of directors that includes representatives of the shareholder local authorities. These elected officials exercise direct control over strategic directions, budgets, and agreements made with the affiliated local authority.
This dual role (shareholder and ordering party) creates structural tension. The elected administrator must reconcile the social interest of the SEM with the public policy objectives of their local authority. Field feedback varies on this point: some SEMs operate with fluid governance, while others experience blockages due to disagreements between the local political majority and operational management.
Corporate purpose and scope of intervention
The corporate purpose of a SEM must characterize a mission of public interest at the territorial level. The most common areas of intervention are urban development, management of local public services (water, transportation, parking), economic development, and real estate.
The drafting of the corporate purpose in the bylaws conditions the future scope of action of the company. A purpose that is too broad exposes the SEM to challenges regarding the legitimacy of certain activities. A purpose that is too narrow limits its adaptability.
Feasibility studies and deliberations: the political steps before creation
Before any drafting of bylaws, the local authority must identify a local need, verify that it falls within the public interest, and demonstrate the economic viability of the project. This preliminary phase includes a strategic market analysis and the definition of an action plan.
The creation of a SEM requires a deliberation from the deliberative assembly of each shareholder local authority. This deliberation concerns participation in the capital, the amount of the contribution, and the designation of representatives on the board of directors. Without this vote, no subscription of shares is legally possible.
- The market study must demonstrate that the project meets an uncovered or poorly covered need by the private sector alone.
- The business plan must incorporate the constraints of public procurement (public contracts, public service delegations) to which the SEM remains subject for part of its activities.
- The constitution of the “shareholder roundtable,” which includes local authorities, public institutions, and private partners, often represents several months of negotiation.
The available data does not allow for an average duration to be set for the entire process, as situations vary depending on the size of the project and the number of local authorities involved.
Once the bylaws are signed and the capital deposited, registration in the trade register via the single window triggers the acquisition of legal personality. The SEM can then conclude its first contracts, recruit, and launch its operations. The transition from political idea to operational company rarely takes less than a year, including deliberations and studies.
