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

Company Law (en cours)

Initially reserved for joint stock companies, management expertise was extended to limited liability companies by the law of 1 March 1984 , amended by the NRE law of 15 May 2001 . Article L. 223-37 of the Commercial Code now provides that the public prosecutor, the works council, or one or more partners representing at least one-tenth of the share capital  may, either individually or by grouping t …

Designation conditions.

Initially reserved for joint stock companies, management expertise was extended to limited liability companies by the law of 1 March 1984 , amended by the NRE law of 15 May 2001 . Article L. 223-37 of the Commercial Code now provides that the public prosecutor, the works council, or one or more partners representing at least one-tenth of the share capital  may, either individually or by grouping together in any form, request the court to appoint one or more experts to present a report on one or more management operations. Neither the fact that a partner of an SARL abstained from participating in meetings that approved a regulated agreement, nor the fact that they did not exercise any recourse against the approval decisions of the partners' assembly, is sufficient to exclude the possibility that this management act may be subject to an expert measure . Moreover, the mere fact that a regulated agreement received the approval of the partners' assembly does not exclude the possibility that this management act may be subject to an expert measure .

Specific conditions must be met for the judge to grant the request for an expert assessment. Indeed, management expertise constitutes a serious judicial measure that diminishes the company's credit by casting doubt on a corporate operation and can therefore only be ordered if there are presumptions of irregularities affecting one or more specific management operations, which cannot be inferred from general criticisms. The judge cannot thus reject a request for the appointment of a management expert by denying any suspicious nature to the criticized agreements, especially when, following their conclusion, the company's turnover has sharply decreased, and such a circumstance is likely to presume the existence of irregularities detrimental to the corporate interest.

What acts may be classified as management operations? Jurisprudence considers that entering into a shareholder current account agreement, which is a regulated agreement, constitutes a "management operation" within the meaning of Article L. 223-37 of the Commercial Code and may, therefore, be subject to an expert assessment . Conversely, when the decision to sell real estate owned by an SARL falls, according to the statutes, within the powers of the shareholders' meeting, it does not constitute a management operation that may be subject to a management assessment regarding the advisability of such a project in light of the corporate interest . Similarly, the allocation of profits of an SARL and the advisability of their systematic reservation do not constitute management operations that can be controlled through a management assessment . The same applies to the setting of the remuneration of an SARL manager by decision of the shareholders' meeting . Finally, the investigative measure aimed at determining the circumstances of the preparation of an audit report prepared by an accounting firm on the activity of an SARL does not constitute a management operation either .

Even if the request indeed concerns a management operation, for the judge to grant the request for expertise, it must still have a certain interest . A minority partner justifies an interest in having a management expertise determine whether management operations regarding the remuneration of the manager of an SARL, potentially harmful to the company's existence, were regularly decided and whether they correspond to the reality of the work performed .

If the request is granted, the court decision determines the scope of the mission and the powers of the experts. Failing to succeed, the associate of an SARL can still request all investigative measures in anticipation of a potential dispute based on Article 145 of the Code of Civil Procedure.

L. 84-148 of 1 March 1984 relating to the prevention and amicable settlement of difficulties of undertakings.

Law No 2001-420 of 15 May 2001 on new economic regulations.

Cass. com., 13 September 2017, LawLex202300005118JBJ.

Ibid. - See also, CA Grenoble, 29 March 2006, LawLex202300005169JBJ.

Cass. com., 30 May 1989, LawLex202200006540JBJ; 25 September 2012, LawLex202200006539JBJ, holding that the decision to increase the corporate capital, which falls within the powers of the shareholders' meeting, does not constitute a management operation for which minority shareholders can request a management audit.

Paris, 16 April 1999, LawLex202300005199JBJ.

Paris, 3 May 1996, LawLex202300005270JBJ, considering that a partner representing more than 10% of the capital can only request the judicial appointment of an expert to present a report on one or more management operations if this investigative measure is not devoid of any interest, such as when it aims to establish known facts or to misinterpret them abusively.

CA Besançon, 20 October 1999, LawLex202300005275JBJ.

Versailles, 23 November 1988, LawLex202300005120JBJ, considering that the request for the appointment of a management expert requires the status of a shareholder of the person making the request.

Cass. com., 5 May 2009, LawLex202200006537JBJ.

Pau, 4 April 2024, LawLex202400003026JBJ, considering that a clerical error in the minutes of a general meeting concerning a vote that does not challenge a long-established situation cannot constitute a presumption of irregularity and/or fault regarding management operations, especially when the requesting associate has always been invited to the meetings and therefore cannot claim to have been kept unaware of the company's accounts.

Cass. com., 24 October 2018, LawLex202200006538JBJ, considering that the management expertise that may be ordered based on Article L. 223-37 of the Commercial Code must be limited to one or more specific management operations and cannot cover all the company's financial operations over two fiscal years, particularly to verify the existence of de facto management; Paris, 21 February 1992, LawLex202300005154JBJ. - See also a contrario, Cass. com., 24 October 2018, LawLex202300005117JBJ, holding that the court seized of a management expertise request made by a partner of an SARL is obliged to order it, as long as it notes presumptions of irregularities affecting one or more specific management operations; 16 December 2020, LawLex202300005119JBJ, holding that the suspicious nature of lump-sum expense reimbursements by the SARL or an overpayment of additional profit-sharing received by the manager requires the court seized of a management expertise request to order the measure, regardless of the amount of these operations.

Toulouse, 14 October 1992, LawLex202300005124JBJ; Lyon, 5 December 1997, LawLex202300005127JBJ; Versailles, 23 November 1988, LawLex202300005120JBJ, holding that a request for management expertise cannot have a general nature likely to result in control of the entire policy of an SARL.

Cass. com., 5 May 2009, LawLex202200006537JBJ; 5 April 2023, LawLex202300005947JBJ, RJDA 2023, No 387, holding that the court seized with a request for management expertise by a partner is required to order it, as soon as it identifies presumptions of irregularity affecting a specific management operation, such as the leasing-management of the business assets of an SARL in disregard of the procedure for controlling regulated agreements.

Cass. com., 21 April 2022, LawLex202200003955JBJ, Procedures December 2022, chon. 6, No 4 and 6, obs. MESSAI-BAHRI; JCP E 2022, No 1276, obs. DONDERO; 5 May 2009, LawLex202200006537JBJ; CA Paris, 5 November 1999, LawLex202300005222JBJ.

Company Law (en cours)

451. Designation conditions.

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Les décisions de justice citées dans ce paragraphe :

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451. Designation conditions.

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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