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

Company Law (en cours)

Shareholders, as members of the company, have the right to participate in corporate decisions. They must therefore be called to meetings where some of these decisions are made . Article L. 225-103 of the Commercial Code, in its paragraph 1, provides that the notice is given by the board of directors or the executive board, as the case may be. The text provides that the meeting may also be convened …

Right inherent to shareholder status

Shareholders, as members of the company, have the right to participate in corporate decisions. They must therefore be called to meetings where some of these decisions are made . Article L. 225-103 of the Commercial Code, in its paragraph 1, provides that the notice is given by the board of directors or the executive board, as the case may be. The text provides that the meeting may also be convened:

- by the statutory auditors, provided that the deficiency of the board of directors is established ;

- by an agent, appointed by the court, at the request of either any interested party in case of urgency, one or more shareholders holding at least 5% of the share capital, or a shareholders' association meeting the conditions set out in Article L. 225-120. The judicial appointment of an ad hoc agent to convene the general meeting is not contingent upon the abnormal functioning of the company, the threat of imminent peril, or a manifestly unlawful disturbance, but only upon demonstrating its compliance with the corporate interest . Indeed, a dismissed director cannot request in summary proceedings the appointment of a judicial agent to convene the general meeting of shareholders, as such a request, not in line with the company's interest, is solely motivated by the intent to challenge the validity of their dismissal ;

- by the majority shareholders in capital or voting rights after a public tender offer or exchange offer or after the sale of a controlling block.

Furthermore, if contrary to the provisions of Article L. 225-100, the ordinary general meeting has not been convened within six months of the close of the fiscal year, the public prosecutor or any shareholder may petition the president of the competent court ruling in summary proceedings to order, if necessary under penalty, the directors to convene this meeting or to appoint a representative to do so.

Apart from these scenarios, the general meeting of a joint stock company cannot, without infringing on the powers granted by law to the board of directors, either convene spontaneously or usurp for its own benefit, to entrust to a third party without authority, the right to convene the shareholders .

To be valid, the shareholder's notice of the meeting must meet certain formal requirements. Indeed, a notice must be published in a legal announcement medium within fifteen days preceding the meeting. Furthermore, in accordance with Article R. 225-63, a letter must be sent to identifiable shareholders. The judge considers that sending a notice of meeting, within the appropriate timeframe, to hold a general meeting, to only those shareholders whose current address is known, fulfills these requirements, without it being possible to reproach the company for not sending a notice to the last known address of those who neglected to report their change of address . For listed companies, Article R. 22-10-22 of the Commercial Code, which refers to Article R. 225-73, provides that at least thirty-five days before the meeting, a notice of meeting must be published, even before the notice of convocation is sent.

Pursuant to Article L. 225-104, any meeting irregularly convened may be annulled , unless all shareholders were present or represented. The burden of proof for convening a shareholder to a general meeting lies with the company . However, case law holds that no provision requires the judge to declare the nullity of a general meeting of shareholders, or its resolutions, on the grounds that it was convened by a board of directors that was not regularly sitting . Similarly, the resolution of the extraordinary general meeting of a public limited company, convened by a board of directors composed mainly of directors who do not hold the number of shares required by the articles of association, is not subject to nullity as it does not violate any mandatory provision of company law or contract law . Furthermore, the extraordinary general meeting of a public limited company cannot be annulled on the grounds of irregularity in its convening due to the irregular appointment of its author, if the nullity of his appointment as chairman of the supervisory board has not been pronounced beforehand . Conversely, the extraordinary general meeting of a public limited company is subject to nullity if it was held and deliberated in fraud of the rights of minority shareholders, whose convening did not comply with the legal deadline and who were denied admission . It appears that what case law actually sanctions is more the offense of obstructing the shareholder's participation in the general meeting. Such an offense is not characterized merely by the fact that the meetings were irregularly convened and that, at their conclusion, the chairman proceeded with a new distribution of shares that excluded certain shareholders .

Cass. com., 5 May 1981, LawLex202300006015JBJ, considering that the co-owners of indivisible shares of a joint stock company can assert, with respect to it, an individual right to be convened to general meetings.

CA Versailles, 19 January 2006, LawLex202300003010JBJ.

Cass. com., 6 September 2016, LawLex202200005107JBJ.

Cass. com., 6 July 1983, LawLex202300004197JBJ.

Cass. crim., 13 March 1989, LawLex202300006017JBJ.

Cass. com., 13 January 2021, LawLex202200005106JBJ, D. 2021, 132 and 1941, note LAMAZEROLLES; Rev. sociétés 2021, 248, note VIANDIER. - See, however, Cass. com., 22 April 1966, LawLex202300012109JBJ, holding that a judicial representative must be appointed in summary proceedings to convene an extraordinary general meeting, in the presence of a corporate peril and an urgent situation, as soon as a conflict has erupted within the joint stock company between its chairman and CEO and the majority shareholder, which prevents the normal management of the company, and the irreducible nature of the respective positions and the antagonism of the interests involved has thwarted a negotiated solution.

Paris, 15 March 1990, LawLex202300012110JBJ.

Cass. com., 30 April 1968, LawLex202300006014JBJ.

Cass. com., 13 January 1998, LawLex202200005863JBJ.

Paris, 5 December 2023, LawLex202300014624JBJ, considering that the shareholder whose transfer of shares was resolved can act for the nullity of general meetings held urgently before their reinstatement and concerning fundamental decisions, as long as their failure to be summoned to these meetings does not result from a formal irregularity, but was intended to allow their eviction and neutralize the legal action they had initiated, thereby infringing on their right to participate in collective decisions; Paris, 27 June 2024, LawLex202400005014JBJ.

Cass. com., 10 November 2009, LawLex202200007893JBJ.

Cass. com., 9 July 2002, LawLex202200010378JBJ.

Cass. com., 23 October 1979, LawLex202300006019JBJ; 9 June 1969, LawLex202300012111JBJ, considering that the statutory auditor is entitled to convene an extraordinary general meeting to deliberate on a proposed contribution to a SA, in the face of an evident urgency, due to the need to act quickly to avoid exposing the absorbing companies to heavy tax burdens likely to jeopardize the chances of the operation, at a location other than the registered office, due to the opposition of the company's president, without incurring the invalidity of the deliberations.

Company Law (en cours)

474. Right inherent to shareholder status

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

474. Right inherent to shareholder status

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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au contenu exclusif Livv – juristes d’entreprise