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

Company Law (en cours)

The SAS may be dissolved for any of the common causes of dissolution applicable to companies listed in Article 1844-7 of the Civil Code, including the expiration of the term for which it was formed, the achievement or extinction of its corporate purpose, the annulment of the articles of association, early dissolution decided by the partners or pronounced by the court at the request of a partner fo …

End of the company

The SAS may be dissolved for any of the common causes of dissolution applicable to companies listed in Article 1844-7 of the Civil Code, including the expiration of the term for which it was formed, the achievement or extinction of its corporate purpose, the annulment of the articles of association, early dissolution decided by the partners or pronounced by the court at the request of a partner for just grounds, particularly in the event of a partner's failure to fulfill obligations or disagreement among partners paralyzing the company's operation , early dissolution pronounced by the court in the case provided for in Article 1844-5, the effect of a judgment ordering the closure of judicial liquidation for insufficient assets, or any other cause provided for by the statutes. In the latter case, the early dissolution of the SAS must be pronounced by a collective decision of the partners, under the conditions provided by the statutes . In the event that all shares are consolidated in a single hand, the provisions of Article 1844-5 of the Civil Code  relating to judicial dissolution are not applicable  since the multi-member SAS will transform into a single-member SAS.

A SAS may also be dissolved for a cause specific to it. In accordance with Article L. 225-248 of the Commercial Code , applicable by reference from the third paragraph of Article L. 227-1 of the same code. If, due to losses recorded in the accounting documents, the company's shareholders' equity becomes less than half of the share capital, the president or the chief executive officer, as the case may be, must, within four months following the approval of the accounts that revealed this loss, convene the extraordinary general meeting to decide whether there is a need for early dissolution of the company. If dissolution is not decided, the company must, no later than the close of the second fiscal year following the one during which the losses were recorded, restore its shareholders' equity to at least half of the share capital or, subject to Article L. 224-2, reduce its share capital by the necessary amount so that the value of the shareholders' equity is at least equal to half of its amount. If, before the close of the second fiscal year following the one during which the losses were recorded, the shareholders' equity has not been restored to at least half of the share capital while the company's share capital is greater than 1% of the total balance sheet of this company, recorded at the last fiscal year-end , the company is required, no later than the close of the second fiscal year following this deadline, to reduce its share capital, subject to Article L. 224-2, to bring it to a value less than or equal to this threshold. In the absence of a general meeting, or if this meeting could not validly deliberate on the last call, any interested party may request the dissolution of the company in court . In all cases, the court may grant the company a maximum period of six months to regularize the situation. It cannot pronounce the dissolution if, on the day it rules on the merits, this regularization has taken place. Article R. 225-166 of the Commercial Code specifies that the decision of the general meeting must be filed with the registry of the commercial court of the place of the registered office and registered in the trade and companies register. It must also be published in a medium authorized to receive legal announcements.

See for illustrations, Bordeaux, 10 January 2023, LawLex202300009695JBJ, specifying that the paralysis of an SAS, which justifies its judicial dissolution, is characterized when the partners multiply disputes, general meetings are held in the absence of a partner under conditions contested by the latter regarding their regularity, and the company has not filed its financial statements with the registry for several years. - Adde, noting that the fact that the SAS partner requesting dissolution is at the origin of the disagreement he invokes does not prevent it from being considered a just ground for the dissolution of the company unless he is solely responsible for this disagreement; Pau, 10 January 2022, LawLex202300011410JBJ, considering that the SAS partner requesting judicial dissolution is at the origin of the disagreement he invokes when it results from his unilateral decision to terminate the company's activity and the attribution of grievances to his partner without relevant factual basis is solely intended to retrospectively justify this decision; Paris, 26 January 2021, LawLex202300011409JBJ, considering that the judge may pronounce the dissolution of an SAS and appoint its president as amicable liquidator, as long as its partners, who hold essentially equal shares of the company's capital, are unable to agree on making constructive decisions in the interest of the company.

"The consolidation of all shares in a single hand does not automatically result in the dissolution of the company. Any interested party may request this dissolution if the situation has not been rectified within one year. The court may grant the company a maximum period of six months to rectify the situation. It cannot pronounce the dissolution if, on the day it rules on the merits, this rectification has taken place [...]"

Modified by Law No 2023-171 of 9 March 2023 on various provisions for adaptation to European Union law in the fields of economy, health, labor, transport, and agriculture, Art. 14 and Decree No 2023-657 of 25 July 2023 setting the thresholds provided for in Articles L. 223-42 and L. 225-248 of the Commercial Code.

See for an illustration, Montpellier, 9 June 2015, LawLex202300007313JBJ, holding that the dissolution of an SAS is justified, even if at an extraordinary general meeting, the partners unanimously decided not to pronounce it, as long as losses leading to the reduction of shareholders' equity to an amount less than half of the share capital have been recorded and the capital has not been reduced accordingly or the shareholders' equity has not been restored to at least half of the capital before the close of the second fiscal year following the one during which the losses were recorded.

Company Law (en cours)

613. End of the company

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613. End of the company

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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