Governance and Crowdfunding: Reflections on the French Experience
Essalhin M Alaish
Lecturer in private law – Faculty of Law – University of Benghazi
The opening session of the 17th European Corporate Governance Conference, which was held in Luxembourg on 15 December 15 2015, focused on the influence of new forms of financing on corporate governance. A number of experts discussed some modern methods of financing and their impact on the corporate governance rules. Crowdfunding was the most important example.
‘Crowdfunding’ is the practice of funding a project by raising monetary contributions from a large number of people. Today, this practice is often performed via internet-mediated registries but the concept can also be executed through mail-order subscriptions, benefit events, and other methods. Indeed, crowdfunding is a form of alternative finance, which has emerged outside of the traditional financial system.
The French government issued Ordinance no. 2014-559 dated May 30, 2014 (an ‘ordinance’ is government act having the force of a legislative action), with the stated aim of lifting some of the regulatory constraints hindering the development of crowdfunding in France, while maintaining sufficient investor protection. To this end, the ordinance addresses each of the three forms that crowdfunding typically takes, that is, securities investments, loans and donations depending on the form of the requested funding.
In this research, we will try to shed light on the concept of crowdfunding, and then we will discuss the main points covered by the French law on crowdfunding and the impact of this law on corporate governance