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

Company Law (en cours)

The cessation of the statutory auditor's duties may result from the occurrence of several types of events. It may arise from the expiration of the term of office, a resignation, a dismissal, or a challenge. Regardless of the cause of the cessation of duties, the statutory auditor whose mandate for the legal audit of accounts or certification of sustainability information has expired must allow the …

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The cessation of the statutory auditor's duties may result from the occurrence of several types of events. It may arise from the expiration of the term of office, a resignation, a dismissal, or a challenge. Regardless of the cause of the cessation of duties, the statutory auditor whose mandate for the legal audit of accounts or certification of sustainability information has expired must allow the succeeding statutory auditor access to all relevant information and documents concerning the company .

Pursuant to Article L. 821-50 of the Commercial Code , in the event of misconduct or impediment, statutory auditors may be relieved of their duties of certifying accounts or providing sustainability information before the normal expiration thereof, by court decision, at the request of the collegial body responsible for administration, the body responsible for management, one or more shareholders or partners representing at least 5% of the share capital, the Social and Economic Committee, the public prosecutor, or the Financial Markets Authority for entities whose financial securities are admitted to trading on a regulated market. In particular, behavior justifying the removal from office includes a statutory auditor actively and directly participating in negotiations for a transfer of shares by directly communicating with the company's banker, in total contradiction with their mission and ethical obligations, overstepping their role by conducting research on the future acquirer, and threatening, in the presence of third parties likely to finance the company's restructuring project, to initiate an alert procedure, thereby breaching professional secrecy . Similarly, a statutory auditor who fails to justify the implementation of control procedures provided by professional standards that would have detected discovered anomalies may be dismissed by the judge . Furthermore, gross negligence in auditing accounts, leading to the non-disclosure of accounting anomalies, is also grounds for judicial dismissal of the statutory auditor of an SAS . However, although an auditor exceeds their control mission by intervening in the company's social aspect by advising on the type of hiring to be done and making management decisions regarding doubtful debts, these failings do not meet the required level of severity to warrant their removal . Finally, the mere initiation of a liability action against a statutory auditor by the entity within which they perform their mission does not constitute an impediment justifying their removal .

When the statutory auditor is relieved of their duties, they are replaced by the substitute statutory auditor .

Pursuant to Article L. 821-49 of the Commercial Code, one or more shareholders or partners of the company representing at least 5% of the share capital, the Social and Economic Committee, the Public Prosecutor, and the Financial Markets Authority, for companies whose financial securities are admitted to trading on a regulated market, may request the dismissal for just cause of one or more statutory auditors in court. Paragraph 3 of the text specifies that a difference of opinion on an accounting treatment, a sustainability information element, or a control procedure cannot constitute just cause for dismissal.

When seized, the president of the commercial court is called upon to rule according to the expedited procedure on the merits regarding the request for recusal of the statutory auditor. This request must be filed against the statutory auditor and the company for which they were appointed and submitted within thirty days of their appointment . If the request is granted, a new statutory auditor is appointed by the court. Their mission ends upon the appointment of the new statutory auditor by the assembly or the competent body .

Whether the statutory auditor is relieved of their duties or challenged, the clerk of the court that rendered the decision must inform the High Audit Authority within eight days by registered letter with acknowledgment of receipt and send them a copy of the judgment , which the latter is responsible for transmitting without delay to the National Company and the competent regional council . Furthermore, the High Authority is required to inform the audited company and the substitute statutory auditors .

Commercial Code, Art. L. 821-44, para. 3.

Ord. No 2023-1142 of 6 December 2023 on the publication and certification of sustainability information and the environmental, social, and corporate governance obligations of commercial companies, OJ of 7 December 2023.

Commercial Code, Art. R. 821-177, para. 1.

CA Riom, 28 February 2024, LawLex202400002079JBJ.

CA Montpellier, 22 October 2019, LawLex202300011395JBJ.

CA Riom, 28 February 2024, LawLex202400002079JBJ, previously cited.

Cass. com., 24 January 2024, LawLex202400000677JBJ.

Commercial Code, Art. R. 821-176, para. 3

Commercial Code, Art. R. 821-176, para. 1.

Commercial Code, Art. L. 821-49, para. 4.

Company Law (en cours)

603. End of term

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