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

Company Law (en cours)

Pursuant to Article 1240 of the Civil Code, any act of a person that causes damage to another obliges the person through whose fault it occurred to repair it. Therefore, any minority shareholder who has suffered personal harm due to an abusive decision by the majority shareholders, distinct from that of the company, may request compensation for said harm based on Article 1240 . To obtain compensat …

Damages

Pursuant to Article 1240 of the Civil Code, any act of a person that causes damage to another obliges the person through whose fault it occurred to repair it. Therefore, any minority shareholder who has suffered personal harm due to an abusive decision by the majority shareholders, distinct from that of the company, may request compensation for said harm based on Article 1240 . To obtain compensation, the three conditions characterizing civil liability must be met, namely: the existence of a triggering event, in this case, an abuse of majority; harm; and a causal link.

The holders of the action for compensation for damage suffered as a result of majority abuse are, as with the action for nullity of resolutions, the minority partners. The fact that they may have cast a favorable vote for the criticized resolution does not deprive them of their interest in subsequently seeking compensation for their damage , even if some trial courts oppose this solution . Moreover, the action of a minority partner seeking compensation for damages resulting from majority abuse can only be directed against the partner to whom they attribute this abuse, and not against the company . The representatives of the company may also act on behalf of the company, based on the legal powers conferred upon them, to seek compensation for damages suffered by the company resulting from majority abuse.

Unlike the action for invalidity of resolutions, which can be brought against both the company and the majority shareholders at fault, the liability action of a minority shareholder seeking compensation for damage resulting from an abuse of majority can only be directed against the shareholder to whom this abuse is attributed. Indeed, the company itself is a victim of a vote contrary to the company's interests . Only the majority shareholders who have committed an abuse of majority must answer for the harmful consequences that result for the minority shareholders .

Regarding a personal action, the action for compensation for damage caused by an abuse of majority is subject to a five-year limitation period from the day the holder of a right knew or should have known the facts allowing them to exercise it ; the three-year limitation period of Article L. 223-23 of the Commercial Code does not apply to the liability action based on an abuse of majority . A claim for compensation for damage that a minority shareholder claims to suffer due to an abuse of majority must be dismissed if the action for annulment of the corporate resolution during which this abuse was allegedly committed has been declared time-barred .

CA Aix-en-Provence, 22 February 2024, LawLex202400002213JBJ.

Lyon, 14 May 2009, LawLex202200009146JBJ. - See also, by analogy, See Cass. 3e civ., 19 July 2000, LawLex202200005986JBJ and Cass. com., 13 November 2003, LawLex202200006546JBJ.

Rouen, 19 May 2022, LawLex202200011198JBJ, holding that a minority partner, who votes in favor of a resolution or abstains from voting, is not justified in claiming that it constitutes an abuse of majority.

CA Rouen, 19 May 2022, LawLex202200011198JBJ.

Cass. com., 6 June 1990, LawLex202200005112JBJ.

Civil Code, Art. 2224. - For an application, See Cass. com., 30 May 2018, LawLex202200006542JBJ.

CA Caen, 26 April 2022, LawLex202300004151JBJ.

Cass. com., 11 January 2017, LawLex202300003679JBJ.

Company Law (en cours)

193. Damages

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

193. Damages

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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