1. The shares that constitute "returnable shares" are redeemable and non-negotiable, therefore, not listed on the stock exchange.
The articles of association of the enterprise, known as "variable capital", as well as the diligence of the board of directors and the general management, govern the terms and conditions for the redemption of these shares and the permanent issuance of new shares. In some cases, the reimbursement only takes place once a year. In others, the time between the application and the actual repayment is very short, which makes this method of liquidation more convenient for the saver.
2. An investment in capital by returnable shares is deprived of the possibility of a capital gain.
The possibility of a capital gain generated by the sale of a share of the capital is inherent in negotiable shares (following proposal). Moreover, a capital gain or a capital loss on sale is certainly the result of an economic exchange – the sale of the transferred security – but it is also a transfer between the buyer and the seller70.
3. The deprivation of the possibility of a capital gain can be reconciled with protection against currency depreciation.
Discounting the exploited value per share and aligning the liquidation value with that exploited value can be used for this purpose. The distribution of free shares is also important. For 20 years, I have been a member of an enterprise with variable capital. In addition to the annual interest on my investment, the enterprise informed me every 3 to 5 years of the revalued amount of my shares or distributed free shares to me. These measures have reduced the exposure to monetary erosion of my investment.
4. No shareholder of an enterprise whose shares are all returnable holds more than a capped fraction of the capital.
Typically: the fraction of the capital that a member holds at most is limited to 5%, i.e. a member of at least 20 members. In addition, and as a general rule, the enterprise only remains well managed if it maintains the issuance of new shares and the opening to new members in order to compensate at least for the liquidations that have taken place. This is why French legislation uses the expression "with variable personnel and capital" to characterize this type of enterprise, the "variable personnel" being the number of members71.
5. By means of returnable shares, the increase in the capital of an undesirable member is completely controllable.
This is the case if the articles of association provide for a procedure for the approval of new members and the liquidation imposed on the member who contravenes the conditions of his approval. This makes it possible to reconcile the protection of the affectio societatis with the constant opening of the capital to a greater number of shareholders.
6. Historically, in terms of voting rights, the rule that has most often been associated with the practice of restitutable shares is "one man, one vote".
This rule replaces, where it is statutory, the rule of a number of votes equal to the number of shares PartSociale held. This replacement is nevertheless based on a denial of reality. In other words, a member who sticks to holding a very small number of shares, well below the ceiling set by the articles of association. He has the same power at the general meeting as another who contributes more to the permanent financing of the enterprise. We can say what we want, but this other is in reality more supportive.
7. The "one man, one vote" rule is more secondary than often considered.
It is secondary to the method of liquidation of the shares. It is also secondary in terms of the level of profit per share. Over the long term, the viability of the business model of the returnable joint stock enterprise essentially depends on three conditions: