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

Company Law (en cours)

In certain cases, the transfer of shares in an SARL is unrestricted and does not require any particular formalities. This is notably the case when it occurs between partners: Article L. 223-16 of the Commercial Code indeed provides that shares are freely transferable among them. However, the articles of association may contain a clause limiting the transferability of shares, including among partne …

Hypotheses.

In certain cases, the transfer of shares in an SARL is unrestricted and does not require any particular formalities. This is notably the case when it occurs between partners: Article L. 223-16 of the Commercial Code indeed provides that shares are freely transferable among them. However, the articles of association may contain a clause limiting the transferability of shares, including among partners. A statutory clause may thus, without infringing on the principle of free negotiability of shares among SARL partners, impose a restriction by stipulating that the partner must first offer their shares to the other partners, in proportion to their participation . Non-compliance with the statutory provisions, which conventionally amend the transferability of shares among partners, results in the invalidity of the transfer .

The transfer between family members, spouses, or ascendants and descendants is also not subject to prior approval, provided the operation is not fraudulent . The principle, stated in Article L. 223-13, para. 1, applies to both inter vivos transfers and transfers due to death. In fact, a spouse who notifies an SARL of their intention to be personally recognized as a partner for half of the shares subscribed by their spouse with community property is subject to the approval procedure only if the statutory clause specifically addresses the claim of partner status by the spouse . Again, the statutes can freely arrange the transfer. Thus, the clause in the statutes of an SARL, which provides that the transfer of shares to direct descendants is not subject to the approval of the partners, results in the automatic transfer of those held by a deceased partner to their son, contrary to the transfer to other heirs, which requires the approval of the majority of the partners . In the presence of an approval clause, partners who refuse the entry of heirs into the company must buy back the deceased's shares within the three-month period provided by Article L. 223-14. At the expiration of this period and in the absence of a buyback, the undivided heirs, even if not approved, automatically become partners of the company. They cannot be opposed, if applicable, by the argument that there will be no agreement among future shareholders, as this is only a hypothesis, these new partners having never participated in a general meeting, especially when the undivided ownership will be the majority partner and can make social decisions without the consent of minority partners .

Cass. com., 11 March 2014, LawLex202200000351JBJ, D. 2014, 2156, obs. MOURY; D. 2014, 719, obs. LIENHARD; Rev. sociétés 2014, 384, obs. SAINTOURENS; D. 2014, 2434, obs. HALLOUIN et LAMAZEROLLES et RABREAU; RTD civ. 2014, 650, obs. BARBIER; Rev. sociétés 2014, 28, obs. GALLOIS-COCHET; LPA 23 October 2014, 4, obs. LE GUEUT; JCP E 2014, No 1515, obs. CAFFIN-MOI.

Cass. com., 10 February 2015, LawLex202200006217JBJ, French Company Law 2015, 67, note GALLOIS-COCHET; JCP E 2015, No 9, note BUCHBERGER, BECKER and CAFFIN-MOI; BJS 2015, 238, note PAGNUCCO.

Cass. com., 21 January 1997, LawLex202300003661JBJ, considering that the transfer of shares of an SARL by a partner to his mother, lacking affectio societatis, who then transferred them to her daughter, a third party to the company, is fraudulent and must be annulled, as it aims to circumvent the approval procedure; Cass. com., 11 October 2023, LawLex202300012324JBJ, D. 2023, 2024, obs. DONDERO; JCP E 2024, No 1021, obs. VICENTE; Gaz. Pal. 5 December 2023, 22, obs. BOERIO; LPA February 2024, 53, obs. FARGES; JCP E 2024, No 1100, obs. VALIERGUE; JCP E 2024, No 1143, obs. BUCHBERGER.

Paris, 18 February 2020, LawLex202300003660JBJ.

Cass. com., 28 February 1972, LawLex202300004160JBJ.

CA Chambéry, 23 April 2024, LawLex202400003347JBJ.

Company Law (en cours)

440. Hypotheses.

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440. Hypotheses.

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Les notions juridiques connexes

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