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

Company Law (en cours)

Acts that are not subject to the regulated agreements regime constitute either free agreements or prohibited agreements.
The free agreements, referred to in Article L. 225-39 of the Commercial Code, concern routine transactions concluded under normal conditions. Thus, agreements involving operations of the same nature as others already carried out by the company as part of its statutory activity p …

Permitted agreements and prohibited agreements

Acts that are not subject to the regulated agreements regime constitute either free agreements or prohibited agreements.

The free agreements, referred to in Article L. 225-39 of the Commercial Code, concern routine transactions concluded under normal conditions. Thus, agreements involving operations of the same nature as others already carried out by the company as part of its statutory activity pertain to routine operations concluded under normal conditions that are not subject to the approval of the general meeting . However, an agreement entered into between a joint stock company and one of its directors that does not involve a routine operation, as it is of an exceptional nature, does not fall under the regime of free agreements .

Prohibited agreements refer to acts whose impact would be so detrimental to the company if carried out that they are outright banned. Indeed, Article L. 225-43 stipulates that, under penalty of nullity of the contract, directors other than legal entities are prohibited from contracting loans from the company in any form, obtaining an overdraft from it, whether in a current account or otherwise, as well as having their commitments to third parties guaranteed or endorsed by it. The same prohibition applies to the CEO, deputy CEOs, and permanent representatives of legal entity directors. It also applies to the spouses, ascendants, and descendants of the aforementioned individuals, as well as any intermediary. However, there is a tolerance if the company operates a banking or financial establishment, concerning regular transactions of this business concluded under normal conditions when the company operates a banking or financial establishment. The cash management agreement entered into between two companies, where the director of the lender is the manager of the borrower, is not prohibited, as long as he is not a party to the contract .

A prohibited agreement is subject to absolute invalidity . Consequently, the debts resulting from it cannot be charged to the guarantors .

Cass. com., 21 April 1977, LawLex202200005002JBJ.

Cass. com., 11 March 2003, LawLex202200005001JBJ.

Cass. crim., 28 September 2016, LawLex202200005006JBJ.

Cass. mixte, 10 July 1981, LawLex202200005003JBJ.

Cass. com., 25 November 1980, LawLex202200005004JBJ.

Company Law (en cours)

518. Permitted agreements and prohibited agreements

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Les notions juridiques connexes

518. Permitted agreements and prohibited agreements

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise