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

Company Law (en cours)

The duties of the board of directors are very diverse. Article L. 225-35 of the Commercial Code defines its general missions. It states that the board determines the company's business directions and ensures their implementation, in accordance with its corporate interest, considering the social, environmental, cultural, and sports issues of its activity. It also considers, if applicable, the company's purpose as defined under Article 1835 of the Civil Code. The board of directors conducts the controls and verifications it deems appropriate. Subject to the powers expressly granted to the shareholders' meetings and within the limits of the corporate purpose, it addresses any issue concerning the proper functioning of the company and resolves matters affecting it through its deliberations.

It is also the board of directors that establishes the company's management bodies and defines their powers  and that proceeds with the co-optation of directors . Article L. 225-47 of the Commercial Code grants it the power to elect its chairman, determine his remuneration, and revoke him. It has the authority to authorize the latter to sell a building owned by the company, provided that this transaction does not prevent the continuation of the company's activity and does not infringe its statutes . It is also the board, in accordance with Article L. 225-51-1, that determines the status of the chief executive officer and possibly the deputy chief executive officer,  as well as their remuneration. Therefore, the remuneration that the chairman and CEO requests to be recalled, without justifying any decision from the board of directors, which has exclusive competence in this matter, is not due . Similarly, a chief executive officer cannot himself enter into a contract with a supplementary pension organization designating him, along with the CEO, as a beneficiary, since the board of directors has exclusive competence for this purpose .

The relocation of the registered office within French territory may also be decided by the board of directors, subject to ratification of this decision by the next ordinary general meeting . The board of directors also ensures the proper conduct of shareholders' meetings. It convenes them , sets their agenda , and presents management reports .

It is also within the powers of the board of directors to decide on the response to a statement of objections from the Commission . The board of directors may also, even if it does not represent the company, appoint an agent responsible for declaring its claims, with or without the power of delegation . Similarly, a claim declaration can be validly made by an agent holding a power of attorney issued by the board of directors, when the statutes grant the latter full authority to "collect all sums, securities, or claims owed to the [company] and, if necessary, proceed with the amicable or judicial recovery of said sums, securities, or claims" . If the board of directors is qualified to decide to dismiss the statutory auditor, it cannot, since it does not have legal personality, take legal action for this purpose without going through the legal representative of the company . However, third parties cannot invoke the statutes of a public limited company to criticize the absence of approval of its representative by the board of directors and its power to act on its behalf .

Furthermore, guarantees, endorsements, and sureties given by companies other than those operating banking or financial establishments are subject to authorization by the board, which limits the amount. Finally, it is the board of directors that is competent in authorizing so-called regulated agreements .

Paris, 31 August 2006, LawLex202300007913JBJ.

Cass. com., 11 June 1965, LawLex202200004751JBJ, holding that the essential and determining clause contained in a memorandum of understanding concluded between the chairman of a SA and its majority shareholder, which neutralizes the powers of the former in favor of the latter, is void, since only the board of directors can limit, without being able to withdraw, the powers of the chairman.

Cass. com., 28 September 2004, LawLex202100002924JBJ.

Cass. com., 15 April 2008, LawLex202300007945JBJ; 18 October 1994, LawLex202300007949JBJ, considering that the board of directors may authorize a person to undertake all legal actions and, in particular, to request the auctioning of a business concern.

Cass. com., 3 October 2006, LawLex202300007946JBJ.

Cass. com., 26 February 2008, LawLex202200006562JBJ.

Cass. com., 1 February 1994, LawLex202200004802JBJ.

Cass. com., 4 January 2023, LawLex202300002363JBJ.

Cass. com., 9 May 1990, LawLex202200004925JBJ; 31 March 2021, LawLex202200005859JBJ.

504. Assignments