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

Company Law (en cours)

The social transformation, which entails a modification of the articles of association, can only be decided by the partners, gathered in a meeting. The decision is made by a majority, the nature of which depends on the rules established for each company regarding the modification of the articles of association. The more the decision to transform the company increases the commitments of the partner …

Conditions for access to the new corporate form

The social transformation, which entails a modification of the articles of association, can only be decided by the partners, gathered in a meeting. The decision is made by a majority, the nature of which depends on the rules established for each company regarding the modification of the articles of association. The more the decision to transform the company increases the commitments of the partners, the greater the required majority. Furthermore, Article L. 227-3 of the Commercial Code states that the transformation of a company into an SAS must be decided unanimously . Such unanimity means the expression of the opinion of each member who constitutes the entirety of the partners bound by the articles of association and not just those of the shareholders present or represented at the meeting .

The majority rules are binding on the partners, who risk the annulment of the operation if they proceed with a transformation in disregard of these provisions . Similarly, the decision to transform an SARL into an SA, taken with a majority less than three-quarters of the shares, is void, even if the partner invoking such nullity has potentially committed an abuse of minority . Case law recognizes the validity of transformations carried out under a different majority than required when, due to its situation, the company had no choice but to resort to a transformation. Thus, a decision to transform taken by a simple majority, instead of the required three-quarters majority, is not subject to nullity, provided that the transformation was decided to avoid the risk of dissolution and to ensure the company a legal framework in line with its development .

In addition to complying with majority rules, the decision to transform the company must not constitute an abuse. Case law has determined that this is not the case when all statutory managers are affected by the consequences of the transformation and the family nature of the company is preserved by the registered form of shares and the approval of the board of directors for their transfer .

Finally, a company cannot, in principle, adopt another corporate form unless it meets the formation conditions required by the latter, particularly the conditions of share capital, number of partners, etc. However, the non-compliance with this condition does not seem to be considered by case law as a cause for the invalidity of the transformation. It has indeed held that in the absence of established fraud, no text expressly sanctions by invalidity the decision to transform an SARL into an SA with fewer than seven partners . Moreover, doctors cannot invoke the invalidity of the transformation of their SA into an SNC by arguing that their professional status prohibits them from being merchants, insofar as they rely on an irregularity related to their personal status and not to company law, which ignores the medical profession's code of ethics for the protection of third parties .

Cass. com., 19 December 2006, LawLex202200009386JBJ, considering that like the decision to transform a company into an SAS, the merger by absorption of a company by an SAS requires a decision made unanimously by the partners; Bordeaux, 8 October 2013, LawLex202300002179JBJ, specifying however that the rule of unanimity provided for in Article L. 227-3 of the Commercial Code relating to the decision to transform into an SAS does not apply to the merger by absorption of an SAS by another SAS since this operation cannot be considered a transformation, namely a change of corporate form, within the meaning of the text.

CA Versailles, 24 February 2005, LawLex202200006990JBJ, JCP E 2005, No 731, obs. LEGROS; Ibid., No 1046, 6, obs. CAUSSAIN, DEBOISSY, WICKER.

Versailles, 22 October 2019, LawLex202300002178JBJ, annulling the transformation of a Selarl into a Selas according to a resolution adopted by majority vote, whereas the statutes required a unanimous vote of the partners.

Cass. com., 15 July 1992, LawLex202200009221JBJ.

Cass. com., 22 May 1973, LawLex202200009391JBJ.

Cass. com., 6 June 1972, LawLex202200009392JBJ.

CA Poitiers, 24 January 2012, LawLex202300002177JBJ.

Paris, 21 March 2000, LawLex202200008942JBJ.

Company Law (en cours)

210. Conditions for access to the new corporate form

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

210. Conditions for access to the new corporate form

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise