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

Company Law (en cours)

The excluded partner is entitled to the reimbursement of their shares. However, a difficulty may arise regarding the determination of the value of the shares in question. Previously, case law resolved valuation difficulties by requiring the parties to resort to the expert of Article 1843-4 of the Civil Code, who alone decided the criteria to be considered for the valuation. However, the ordinance of 31 July 2014 amended Article 1843-4 to limit the mandatory recourse to the expert to cases where the price is neither determined nor determinable and where the parties disagree . Recourse to the expert is particularly required when the excluded partner claims that the nominal value of their shares must be re-evaluated following a capital increase prior to the exclusion decision . In the absence of a special provision in the statutes, the value of the excluded partner's shares must be determined by the third-party appraiser at the date closest to their future transfer, in accordance with the provisions of Article 1844-3 of the Civil Code . Seized with a QPC, the Constitutional Council held that the judicial interpretation of this text does not violate the right to property. Indeed, if the delay that may occur between the decision to exit the company and the date of reimbursement of the shares is likely to result in a loss of value of the shares, the Council emphasizes that during this period, the concerned partner retains their proprietary rights and notably receives the dividends from their shares .

The decision of a company's general meeting to exclude a partner who has violated its operating rules results in the immediate loss of this status and the rights attached to it, except for the remuneration of capital contributions until the reimbursement of the shares . From the time of reimbursement, the excluded partner no longer has any rights to claim dividends .

For an application, See Amiens, 22 July 2021, LawLex202200008559JBJ, considering that the summary judge cannot proceed, even provisionally, with any updating of the value of the shares of the general partner who has lost the status of merchant and can no longer remain in the SNC, since in the event of disagreement between the parties, an expert assessment under the conditions provided by Article 1843-4 of the Civil Code must be ordered.

Cass. 1re civ., 28 September 2016, LawLex202300001671JBJ.

Cass. com., 16 September 2014, LawLex202300001670JBJ; 27 June 2018, LawLex202300001448JBJ, considering that the limitation period for the action seeking the reimbursement of the shares of the excluded associate due to the insolvency proceedings initiated against them runs not from the date of the opening judgment but from the proposal to buy back their shares by their co-associates.

Cons constit., 16 September 2016, LawLex202300001678JBJ. - Contra, See CA Bordeaux, 12 March 2024, LawLex202400002267JBJ, considering that the articles of association of a company, which stipulate that partners who have been subject to an exclusion decision for violating the operating rules determined by the internal regulations lose, upon the pronouncement of this decision, their status as partners, and consequently, their right to dividends, do not derogate from any mandatory public policy provision.

Cass. 1re civ., 26 May 2011, LawLex202300001637JBJ; 9 June 2011, LawLex202300002223JBJ; Cass. 3e civ., 9 December 1998, LawLex202300002134JBJ, considering that the loss of the status of a partner in a real estate civil company in judicial liquidation cannot precede the reimbursement of the shares; Cass. 1re civ., 2 July 2014, LawLex202300001658JBJ, holding that a notary partner of a professional civil company, dismissed by an order of the Minister of Justice, is entitled, notwithstanding his wrongful retention, to remuneration for his capital contributions as long as he holds his shares; Cass. com., 16 September 2014, LawLex202300001670JBJ, considering that the suspension of the exercise of non-financial rights of a partner required to transfer his shares, as long as he has not proceeded with this transfer, does not affect his status as a partner; Cass. 1re civ., 28 September 2016, LawLex202300001671JBJ, emphasizing that the failure to reimburse the value of the shares of an excluded cooperative partner does not maintain his mandate as an administrator but delays the loss of partner status accordingly.

Cass. com., 13 March 2019, LawLex202300001692JBJ.

312. Consequences of the loss of associate status.