PEA-PME: share eligibility under the issuing company size criterion is assessed at the time of acquisition

For a PEA-PME⁽¹⁾, as for a standard PEA, the securities eligibility criteria must be met at all times while they are held. However, there is one important exception. In relation to the maximum issuing company size criterion, the eligibility of shares for a PEA-PME is assessed at the time of their acquisition, as demonstrated by the dossier I am presenting to you this month. The fact that this criterion is no longer met thereafter is irrelevant.

Facts

Following the transfer of his PEA-PME in May 2025, Mr R received an email from his new account keeper informing him that his PEA-PME contained company X shares that were not eligible for the plan and that he would therefore have to sell them.

Upon receipt of this request, Mr R. checked the eligibility criteria for the PEA-PME and noted that the company issuing the shares must be a firm which, on the one hand, employs fewer than 5,000 people and, secondly, has an annual turnover not exceeding 1.5 billion euros or a balance sheet total not exceeding 2 billion euros.

When he checked the documents published by the company on the date he acquired its shares, Mr R noted that these conditions had been met.

Consequently, believing that the company X shares were indeed eligible for the PEA-PME, Mr R requested that they remain within his plan and referred the matter to me for this purpose.

Investigation

I questioned Mr R’s account keeper, whilst indicating that it arose from my research that the Official Public Finances Bulletin (BOFIP BOI-RPPM-RCM-40-55 – No. 153) states that ‘Thus, the eligibility of a company’s securities for the PEA-PME is assessed on the basis of its penultimate financial year-end preceding the date of acquisition of those securities under the plan. Subsequent changes in the company’s headcount, turnover and balance sheet total have no bearing on the eligibility of the securities. This means that they can remain within the plan even if the relevant thresholds are subsequently exceeded. However, new securities of that company may not be acquired under the plan.’

Therefore, in my view, it was necessary to ascertain whether the company X shares were eligible for the PEA-PME in view of the size criteria laid down by law, at the time of their acquisition by Mr R with the previous account keeper. If that were indeed the case, these shares could be retained in Mr R’s PEA-PME following the transfer.

In response, the account keeper confirmed to me that it had informed Mr R that the company X shares held by him were no longer eligible for his PEA-PME and had asked him to rectify the situation, either by disposing of his shares or by transferring them to an ordinary securities account (CTO).

However, it acknowledged that Mr R’s arguments, which were well-founded, should have been taken into account, and that it was due to a mistake on the part of its staff that Mr R had once again been asked to dispose of the shares in question, which Mr R had done in November 2025 to prevent the closure of his PEA-PME.

The account keeper therefore proposed cancelling the sale of the shares in company X, refunding the brokerage fees and commission, and offering compensation as a gesture of goodwill.

Recommendation

I brought all these points to Mr R’s attention and explained to him that the proposal from his account keeper, accompanied by a gesture of goodwill, would result in the situation being fully rectified. I therefore advised him to accept it, which Mr R did.

Lesson to be learned

Funds paid into a PEA-PME may be allocated to a number of purposes, listed in Article L. Article 221-32-2 of the Monetary and Financial Code (MFC), including to the acquisition of shares where the issuer meets certain size criteria, relating either to its headcount and turnover or balance sheet, or to its market capitalisation.

In this regard, Article L. Article 221-32-2 (2) of the MFC specifies that, for its shares to be eligible for a PEA-PME, the company issuing the securities must be:

Either a firm which, on the one hand, employs fewer than 5,000 people and, on the other hand, has an annual turnover not exceeding 1.5 billion euros or a balance sheet total not exceeding 2 billion euros. (…)
Or a firm whose securities are admitted to trading on a regulated market or a multilateral trading facility and whose market capitalisation is less than two billion euros, or was so at the close of at least one of the four calendar years preceding the financial year considered for the purpose of assessing the eligibility of the issuing company’s securities.’

Compliance with the criteria set out in a) in terms of workforce, and turnover or balance sheet total, and in b) in terms of market capitalisation – which are alternative criteria – is assessed on the basis of the figures for the penultimate financial year ended prior to the date of acquisition of the securities under the plan (Article D. 221-113-5 III of the MFC).

As a result, as specified in the BOFIP, if the workforce, turnover or balance sheet total of the issuing company subsequently exceed these thresholds – as was the case with company X in the case in question – this change has no bearing on the eligibility of the securities for the PEA-PME.

These conditions whereby the past size of issuing companies is assessed are a distinctive feature of the PEA-PME and apply only to this criterion.

However, retaining securities in a PEA-PME that no longer meet the other eligibility criteria will, in principle, result in the closure of the plan, as is the case for all the eligibility criteria for securities held in a PEA(2). Vigilance on this point is therefore needed.

However, with regard to these other eligibility criteria, the tax authorities allow for some flexibility, enabling the situation to be rectified and thus avoiding the closure of the account. To this end, the plan holder must, within a maximum of two months from the date of ineligibility:

either dispose of any plan securities that no longer meet the eligibility criteria;
or transfer them to an ordinary securities account and make a compensatory payment into their cash account for an amount equivalent to the value of the securities.

[ 1 ] The usual name for ‘equity savings plan aimed at financing small- and medium-sized enterprises and midcaps’.

[ 2 ] This is the case, in particular, for a PEA and, indeed, for a PEA-PME, with regard to the requirement that the issuing company’s registered office be located in France, another EU Member State or a State party to the EEA that has concluded an administrative assistance agreement with France with a view to combating tax fraud and tax evasion.