All of French Company Law: ordinary law of companies and specific regime for different types of companies

Company Law (en cours)

The purpose of the company contract refers to the “aim,” the objective of the company, previously defined as its cause. However, the ordinance reforming contract law of 16 February 2016 removed the notion of cause due to the ambiguity created by its duality.
In reading Article 1832 of the Civil Code, the objective of the company is for the partners to share in the profit and benefit from the resul …

New conception of the purpose of the company contract

The purpose of the company contract refers to the “aim,” the objective of the company, previously defined as its cause. However, the ordinance reforming contract law of 16 February 2016 removed the notion of cause due to the ambiguity created by its duality.

In reading Article 1832 of the Civil Code, the objective of the company is for the partners to share in the profit and benefit from the resulting economy. However, such an approach to the company appears limited in light of the evolution of society since the adoption of the Civil Code.

The Pacte Law of 22 May 2019  thus inserted a new paragraph into Article 1833 to specify that “[t]he company is managed in its social interest, taking into consideration the social and environmental issues of its activity.” In addition to a simple pursuit of profit, the general interest of the company is now superimposed. The new Article 1835, also reshaped by the Pacte Law, codifies this evolution by expressly providing that the articles of association may mention “a purpose, consisting of the principles that the company adopts and for the respect of which it intends to allocate resources in the performance of its activity.” These developments are part of the concept of corporate social responsibility (CSR), which refers to the integration by companies of social, environmental, and economic concerns into their activities and interactions with stakeholders , including Law 2017-399 of 27 March 2017 on the duty of vigilance, which strengthens the obligations of French companies in terms of preventing serious violations of human rights, the environment, health, and safety of individuals, constitutes another illustration.

Law No 2019-486 of 22 May 2019 relating to the growth and transformation of businesses, known as the Pacte Law, OJ 23 May 2019.

Judicial Court Paris, 28 February 2023, LawLex202300003152JBJ.

Company Law (en cours)

31. New conception of the purpose of the company contract

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31. New conception of the purpose of the company contract

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise