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Limited partnership or société en commandite par actions
 

Limited partnership or société en commandite par actions

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    Limited partnership or société en commandite par actions Limited partnership or société en commandite par actions Presentation Transcript

    • THE LIMITED PARTNERSHIP - SOCIÉTÉ EN COMMANDITE PAR ACTIONS Hermès History Differences between LP and SCA
    • HERMÈS HISTORY
      • Founded in 1837 by Thierry Hermès in Paris
      • Began as a Saddle Company
      • After WWII – Grandson, Emile Hermès brought the company to the Luxury Goods Industry with Leather Bags and Travel Accessories
      • Today Emile Hermès SARL maintains 73% of the interest in Hermès International SA
    • HERMÈS HISTORY
      • Entered the Paris Stock Exchange in 1993
      • The Hermès family descendants consists of 170 members, which 73 are adults
      • Out of 40 6 th Generation Hermès descendents 10 work within the company running various divisions
      • In 2009 net sales were €289 Million or $390 Million
    • DIFFERENCES BETWEEN LP AND SCA
      • Must have at least two partners, one must be a General Partner
      • Partners can be either Limited or General but not both
      • General Partners are liable for debt, Limited Partners can partake in debt sharing
      • The General Partners maintain control and make decisions
      • Must have a minimum of one General Partner and three Limited Partners
      • Partners can be both Limited and General
      • General Partners are jointly liable for debt
      • A Supervisory Board is created during the Ordinary General Meeting of Shareholders
      • Limited Partnership
      • Société en Commandite Par Actions
    • DIFFERENCES BETWEEN LP AND SCA
      • Limited Partners hold a percentage of the partnership which allows for profit sharing
      • Limited Partners cannot participate in management decisions
      • Limited Partners hold shares of the SCA which allows for profit sharing
      • Limited Partners can participate in the management of an SCA
      • By-Laws can be designed to guarantee family control of the SCA regardless of their status of a General or Limited Partner
      • Limited Partnership
      • Société en Commandite Par Actions
    • DIFFERENCES BETWEEN LP AND SCA
      • Considered a flow-through entity and not taxed as a Corporation
      • SCA is taxed as a Corporation
      • Limited Partnership
      • Société en Commandite Par Actions
      The Family-Held Sociétés à Responsabilité Limitée (SARLs) can opt for taxation under personal income tax
    • THE OMINOUS THREAT TO HERMÈS Current Events Hermès Family Defensive Tax Consequences
    • CURRENT EVENTS
      • Chairman and Chief Executive, Mr. Jean-Louis Dumas, the Grandson of Emile Hermès, died earlier this year
      • The Limited Partnership Laurent Momméja sold €1.8 Million shares
        • Owned by Hermès Decedents
      • Moët Hennessy Louis Vuitton SA (LVMH) gained a 17.1% stake in Hermès
        • LVMH brands include Louis Vuitton, Christian Dior and Tag Heuer
    • CURRENT EVENTS
      • Bernard Arnault the LVMH Chairman and Majority Owner indicated he was not interest in taking control of Hermès
      • LVMH is utilizing Equity Swaps and Stake-building to increase shares, Mr. Arnault indicated it was “intended as friendly”
    • THE HERMES FAMILY DEFENSIVE
      • Main form of defensive is the Société en Commandite Par Actions (SCA)
      • Emile Hermès SARL plans to take 50% of the family share holdings and secure them into an unlisted holding company, Le Journal du Dimanche
      • Need approval from the Autorite des Marches Financiers or AMF
        • Considered a “reclassification” of the families existing position and not a new holding company
    • TAX CONSEQUENCES
      • If AMF grants Emile Hermès SARL the ability to create a new holding company
        • Shareholders will not be able to sell some of their stock on the open market
        • Emile Hermès SARL may be required to bid for the rest of the outstanding stock
      • If LVMH takes over Hermès International SA
        • Same entity form SCA
        • Emile Hermès SARL would become just another Shareholder
    • QUESTIONS?
    • THANK YOU The End