Public Limited Company (SA) in Morocco: Comprehensive Guide to its Creation, Operation, and Regulations

The Public Limited Company (SA) in Morocco is a legal form of capital company, specifically governed by Law 17-95 relating to public limited companies. It is particularly suited for large-scale projects and companies wishing to be listed on the stock exchange. Due to its structure, it offers a secure and controlled framework for investments. In Morocco, the SA is one of the most common legal forms after the SARL, and its regulations are more demanding.

For certain strategic economic activities, the law also imposes the Public Limited Company form. This is notably the case for:

• Banking activities;
• Real estate credit companies;
• Investment companies.

Are you considering company formation? iHub assists you in choosing the most suitable legal status for your project.

Key Characteristics of a Public Limited Company in Morocco

The Public Limited Company in Morocco is, by nature, a commercial company, regardless of its purpose. Its success is explained by the guarantees it offers. Here are its main characteristics:

Types of Public Limited Companies

There are two main configurations for SAs:

• The Monistic SA (or classic): It has a single control and management body, the board of directors.
• The Dualistic SA: It consists of a management board responsible for management and a supervisory board responsible for control.

Other forms also exist, such as open and closed SAs, SAs making or not making public offerings, and listed or unlisted SAs.

Shareholders

In an SA, the owners are called shareholders. The law requires a minimum of five (5) shareholders for the incorporation of a Public Limited Company. Both natural and legal persons can participate in the capital, without restrictions on residency or nationality.

• In a monistic SA, at least one shareholder must be a natural person, as the chairman of the board of directors must be a natural person and a shareholder.
• In a dualistic SA, at least two shareholders must be natural persons, as the chairman and vice-chairman of the management board must be natural persons and shareholders.

Commercial Capacity and Liability

Commercial capacity is required only for the directors and founders of the SA. As for shareholders' liability, it is limited to the amount of their contributions, similar to an SARL.

Share Capital and Contributions

The minimum share capital for an SA in Morocco is set at:

• 3,000,000 dirhams (three million dirhams) for a company making a public offering.
• 300,000 dirhams (three hundred thousand dirhams) for a company not making a public offering.

This capital is divided into shares. Regarding contributions:

• Cash contributions must be fully subscribed and paid up for at least one quarter upon incorporation, with the remainder to be paid within three years of registration.
• In-kind contributions must be fully subscribed and paid up. They must be valued by an auditor.
• Contributions in industry are not permitted for an SA.

Statutory Auditor

The appointment of at least one statutory auditor is mandatory for every Public Limited Company in Morocco. Companies making a public offering must appoint at least two. This role is generally entrusted to accountants, whose training and experience ideally prepare them for this verification and certification function.

Company Securities and Purpose

SA securities are negotiable and freely transferable financial instruments, often eligible for listing on the stock exchange. An IPO can also qualify for a reduction in Corporate Income Tax (IS). Securities issued by SAs include shares, investment certificates, and bonds.

The nominal value of a share cannot be less than fifty (50) dirhams, except for listed companies where the minimum is ten (10) dirhams. The corporate purpose of an SA is not subject to any particular restrictions.

Company Name and Registered Office

The company name is freely chosen by the founders. The registered office, which determines the company's legal domicile, must be stipulated in the articles of association. iHub offers a domiciliation service to facilitate this step.

Operation and Formation of the SA in Morocco

Creating a Public Limited Company requires a good understanding of its operating and governance rules, which distinguish it from other legal forms.

Key Steps for the Formation of a Public Limited Company

For the creation of your SA in Morocco, the main steps are:

1. Definition of a registered office and a company name.
2. Obtaining the Negative Certificate.
3. Drafting of the articles of association (a service our legal advisors can offer you).
4. Drafting of other necessary documents (subscription form, minutes of the first board meeting, etc.).
5. Deposit of the share capital into a blocked bank account.
6. Registration of the company with tax and other administrations.

Post-Formation Formalities

• Preparation of subscription bulletins.
• Preparation of subscription/payment declarations.
• Filing of incorporation documents and registration formalities with the regional tax directorate.
• Registration in the Commercial Register.
• Affiliation with the National Social Security Fund (CNSS).
• Official publication in a legal bulletin.

Governance of the Public Limited Company

The management of an SA varies depending on the chosen governance model.

Directors of the Monistic SA

In this form, the company is managed by a board of directors, composed of:

• A minimum of three members and a maximum of twelve (up to fifteen if the company makes a public offering).
• This number may be exceeded in the event of a merger, up to the total number of directors in office for more than six months in the merged companies.

Directors of the Dualistic SA

The dualistic SA is managed by a management board and controlled by a supervisory board.

Composition of the Management Board:

• It cannot exceed five members (seven if the company makes a public offering).
• Members of the management board are appointed by the supervisory board, and their mandate is defined in the articles of association (between two and six years).

Composition of the Supervisory Board:

• A minimum of three members and a maximum of twelve (fifteen for companies making a public offering).
• Members of the supervisory board are prohibited from being part of the management board.
• Members are appointed in the articles of association upon incorporation, or by the ordinary general meeting thereafter. Their mandate cannot exceed six years.

Powers of the Management Bodies

The main management bodies of an SA are:

• The Board of Directors: The central body in the monistic form.
• The Management Board and the Supervisory Board: Operate in the dualistic form.
• The Shareholders' Meeting: Holds the supreme decision-making power.

In relations with third parties, the board of directors (monistic form) or the management board (dualistic form) have the broadest powers to act on behalf of the company.

General Meetings

In addition to ordinary general meetings (AGO) and extraordinary general meetings (AGE), SAs can organize special meetings for holders of specific securities (bondholders, for example).

• Ordinary General Meeting (AGO): Takes all decisions that do not involve changes to the articles of association, particularly the annual approval of accounts.
  • Quorum (first call): At least one quarter of the voting shares.
  • Quorum (second call): No quorum required.
• Extraordinary General Meeting (AGE): Solely authorized to make decisions that amend the articles of association, such as registered office changes, share capital modifications, or redistribution of shares.
  • Quorum (first call): At least half of the voting shares.
  • Quorum (second call): At least one quarter of the voting shares.

Dissolution of the Public Limited Company

An SA can be dissolved in several situations:

• If the number of shareholders falls below five for more than one year.
• If the share capital falls below the legal minimum.
• If equity falls below one quarter of the share capital (shareholders have two years to reconstitute it or decide on early dissolution).
• Upon the expiration of the term set in the articles of association (unless renewed).
• By decision of the shareholders.
• Disappearance of its corporate purpose.
• Annulment of the company for non-compliance with incorporation conditions.
• Following a judicial dissolution or the application of collective proceedings.

Tax and Social Security Regime of the SA in Morocco

The tax regime of the SA in Morocco is similar to that of the SARL, including:

• Corporate Income Tax (IS).
• Value Added Tax (TVA).
• Local taxes (business tax, communal services tax).

From a social perspective, SA directors generally benefit from the employee social security and retirement scheme.

Conclusion

The Public Limited Company (SA) is a commercial legal form par excellence, ideal for large projects requiring significant fundraising and credibility with investors and bankers. Its strict framework and control mechanisms offer great security, although it is less flexible than an SARL.

Its two governance models – the board of directors with a general manager, or the management board and supervisory board – allow for adaptation to the company's specific needs in terms of management and oversight.