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

Company Law (en cours)

For the transfer to be valid, it is not enough for the price to be determined. Indeed, a transfer concluded at a nominal or derisory price cannot be regular in the absence of objective justification. Thus, the transfer of ownership interests carried out at the derisory price of EUR 684, set from a nominal value of EUR 1 per ownership interest, when it is actually worth EUR 271.66, considering the  …

Invalidity for derisory transfer price.

For the transfer to be valid, it is not enough for the price to be determined. Indeed, a transfer concluded at a nominal or derisory price cannot be regular in the absence of objective justification. Thus, the transfer of ownership interests carried out at the derisory price of EUR 684, set from a nominal value of EUR 1 per ownership interest, when it is actually worth EUR 271.66, considering the value of the company's assets and liabilities, must be annulled .

For the judge, the principle of contractual freedom opposes declaring a transfer of shares null solely because the freely agreed transfer price is lower than the actual value of the transferred share, when this price is justified by the overall economy of the transaction . In fact, a massive transfer of shares for a symbolic euro is not considered at a low price when the transferor has also undertaken to personally handle the transferee's debts . Similarly, a symbolic euro price applied to a share transfer can be deemed serious when the transferees commit to contributing 500,000 euros in a non-interest-bearing current account for the entire duration of the company's recovery plan through continuation, and to act as guarantors for its proper execution, up to the same amount . Finally, the low price of a share transfer concluded for a symbolic euro, assessed in light of the overall economy of the transaction, is not established when the transferors have chosen to transfer the majority of the company's capital to safeguard their business, without risk to themselves since no asset and liability guarantee agreement has been signed, while retaining a significant portion of the share capital and reserving the possibility of selling it at a more favorable time .

The invalidity of the transfer of ownership interests concluded at a nominal price constitutes a relative invalidity, which is subject to a five-year limitation period .

CA Paris, 5 March 2024, LawLex202400002150JBJ.

Paris, 21 February 2012, LawLex202300000270JBJ, considering that the principle of contractual freedom opposes the nullity of a transfer of ownership interests solely on the grounds that the freely agreed transfer price corresponds to only 31.44% of the actual value of the transferred share, as long as it finds its cause in the general economy of the transaction, which aims to ensure the immediate liquidity of securities incapable of providing their holder with any dividend for an indefinite period; Cass. com., 17 November 2009, LawLex202300000317JBJ, holding that the transfer of a majority stake in a company's capital for one euro has real consideration, as long as the general economy of the transaction finds its cause in the agreements previously concluded between the parties and recalled in the statutes of the joint venture they had created.

Cass. com., 10 October 2018, LawLex202300000315JBJ; 9 March 2010, LawLex202300000322JBJ, considering that the acquisition of shares for the nominal price of one euro does not have a derisory character if it results in the extinction of the parties' reciprocal obligations through the effect of a set-off.

Cass. com., 15 January 2013, LawLex202300000313JBJ.

CA Paris, 28 June 2011, LawLex202300000271JBJ.

Cass. com., 22 March 2016, LawLex202200000811JBJ, D. 2016, 1037, chron. TREARD, ARBELLO, LE BRAS and GAUTIER, considering that the action for invalidity of the transfer of ownership interests concluded at a nominal price, of a relative nature, is subject to a five-year limitation period; Cass. 3e civ., 24 October 2012, LawLex202300000312JBJ.

Company Law (en cours)

292. Invalidity for derisory transfer price.

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292. Invalidity for derisory transfer price.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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