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

Company Law (en cours)

Due to the contractual freedom that characterizes SAS, the shareholders can include in the articles of association provisions other than those expressly imposed by the legislator.
In particular, they can go further than other companies in controlling their shareholding and provide for more restrictive clauses regarding the transfer of shares. They can stipulate a clause of inalienability of shares …

Free organization of the company

Due to the contractual freedom that characterizes SAS, the shareholders can include in the articles of association provisions other than those expressly imposed by the legislator.

In particular, they can go further than other companies in controlling their shareholding and provide for more restrictive clauses regarding the transfer of shares. They can stipulate a clause of inalienability of shares, whose duration must not exceed ten years , a clause requiring approval for any transfer of shares , a forced transfer or exclusion clause , a clause suspending the exercise of non-financial rights of the corporate shareholder subject to a change of control , a preemption or preference clause , as well as the methods for calculating the transfer price of shares when the company implements one of these clauses . In accordance with Article L. 227-19, para. 1, of the Commercial Code, the clauses of inalienability and change of control can only be adopted or modified unanimously by the partners . However, para. 2 of the text provides that the clauses requiring approval and forced transfer or exclusion can be adopted or modified by a decision collectively made by the partners under the conditions and forms provided by the statutes , without requiring unanimity. The preemption clauses, which are not expressly covered by any text, are also not subject to the unanimity rule referred to in para. 1 of Article L. 227-19 .

Furthermore, since the statutes of a simplified joint-stock company set the conditions under which the company is managed , they may provide for the conditions under which one or more persons other than the president, bearing the title of Chief Executive Officer or Deputy Chief Executive Officer, may exercise the powers entrusted to the latter , as well as the conditions under which these officers may be removed from their positions . However, if a decision by the shareholders can supplement the statutes on this point, it cannot derogate from them, even if made unanimously . Although Articles L. 227-1 et seq. of the Commercial Code do not provide for its appointment, it is accepted that the statutes of an SAS may designate a permanent representative of the legal entity that presides over it . In this case, in accordance with Article R. 123-4, 3° of the Commercial Code, the SAS must declare to the trade and companies register the names, customary names, pseudonyms, first names, dates and places of birth, personal domiciles, and nationality of the officers of this legal entity who have the power to habitually direct, manage, or commit the company, indicating for each of them whether they commit the company alone or jointly with respect to third parties. The judge responsible for the control of the RCS cannot argue that Article R. 123-4, 3° only refers to the permanent representative of the legal entity officer whose existence is enshrined by law, to the exclusion of SAS for which the latter is necessarily statutory .

Pursuant to Article L. 227-9 of the Commercial Code, the articles of association also determine the decisions that must be collectively made by the partners in the forms and conditions they provide. The principle enshrined in this article is that of statutory competence for determining the scope of intervention of the collective of SAS partners, subject to certain decisions that, by law, must be made collectively by the partners . According to the Court of Cassation, although it grants SAS partners significant freedom to determine, in the articles of association, the majority required to adopt resolutions in the matters it enumerates, Article L. 227-9 does not allow them to adopt a rule that does not distinguish between supporters and opponents of a resolution, such as one where a resolution can be adopted when a proportion of partners representing less than half of the voting rights present or represented has expressed support for it . However, the referring court of appeal did not align with this position and considers that SAS partners are free to define in the articles of association a procedure for adopting collective decisions by vote, which does not apply a majority rule but a threshold condition, the mere attainment of which allows the resolution submitted to the vote to be considered adopted, even if it does not reach 50% of the votes . Furthermore, unlike the articles of association of public limited companies, the articles of association of an SAS may provide for a clause establishing multiple voting rights . Similarly, they may provide for a judicial extension of the statutory deadline for consulting partners for the approval of annual accounts, as long as this possibility is not prohibited by any text . However, the articles of association of an SAS cannot derogate from the fundamental right recognized by law for any partner to participate by voting in collective decisions, including when these concern their exclusion .

In accordance with the last paragraph of Article L. 227-9 of the Commercial Code, decisions made in violation of the provisions of this article may be annulled at the request of any interested party. In special company law, the invalidity of resolutions is based on Article L. 235-1 of the Commercial Code  which distinguishes the invalidity of acts that amend the articles of association from the invalidity of other acts or resolutions. The former can only result from an express provision of Book II of the Commercial Code relating to commercial companies and economic interest groupings or from the laws governing the invalidity of contracts. The latter can only result from the violation of a mandatory provision of Book II of the same code, except for the first sentence of the first paragraph of Article L. 225-35 and the third sentence of the first paragraph of Article L. 225-64, or from the laws governing contracts, except for the last paragraph of Article 1833 of the Civil Code, all relating to the management of the company in its corporate interest, taking into account the social and environmental issues of its activity. By way of derogation from the general principle set out in Article L. 235-1, the Court of Cassation has recently made a significant reversal of case law and now decides that in simplified joint-stock companies, the ordinary law regime of invalidities of acts or resolutions of companies also applies to decisions made in violation of statutory clauses, and allows any interested party to seek annulment when such violation is likely to affect the outcome of the decision-making process .

Commercial Code, Art. L. 227-6, para. 3. - See for an illustration, Paris, 20 June 2013, LawLex202300001705JBJ, noting that the statutes of an SAS may provide for the creation of any collegial management body, regardless of its name, organization, and the method of appointing its members, as long as they do not contravene the basic principles of good governance.

Cass. com., 9 March 2022, LawLex202200003402JBJ, D. 2022, 1876, obs. LAMAZEROLLES; RJ com. 2022, 389, obs. LE GROG; JCP E 2022, No 1144, obs. DONDERO; JCP G 2022, No 517, obs. HEINICH; BRDA, 2022, No 7; Versailles, 12 December 2013, LawLex202300007317JBJ, considering that in the absence of legal provisions governing them, the statutes of an SAS may freely organize the procedures for the dismissal of the Chief Executive Officer and may, in particular, stipulate that such a decision is beyond the competence of the general meeting.

Cass. com., 9 July 2025, LawLex202500005932JBJ, D. 2025, 1254.

CA Rouen, 14 March 2018, LawLex202300007741JBJ.

CA Versailles, 23 November 2017, LawLex202300008351JBJ.

Cass. com., 19 January 2022, LawLex202300003373JBJ.

CA Paris, 4 April 2023, LawLex202300006848JBJ.

Basse-Terre, 20 December 2021, LawLex202300002836JBJ, affirming that the creation of multiple voting rights is permitted in an SAS, as long as the rules applicable to a public limited company, which establish the principle of a voting right attached to shares proportional to the portion of capital they represent and only allow the creation of double voting rights, do not apply to this corporate form.

CA Versailles, 23 November 2017, LawLex202300008351JBJ, previously cited.

C. com., Art. L. 227-16. - See, for illustrations, CA Toulouse, 4 July 2006, LawLex202300009033JBJ, noting that the ability for shareholders of an SAS to insert an exclusion clause in the statutes is expressly provided for by Article L. 227-16 of the Commercial Code; Cass. com., 23 October 2007, LawLex202200009052JBJ, JCP E 2007, No 1280, obs. CAUSSAIN; DEBOISSY and WICKER; JCP G 2007, No 10197, obs. BUREAU; RTD com. 2007, 791, obs. LE CANNU and DONDERO; Rev. sociétés 2007, 814, obs. LE CANNU; D. 2008, 47, obs. PACLOT; JCP E 2007, No 2433, obs. VIANDIER; D. 2007, 2726, obs. LIENHARD; RTD com. 2008, 566, obs. CHAMPAUD and DANET, specifying that while the statutes of an SAS may provide that a shareholder can be required to transfer their shares, they cannot, when this measure is subject to a collective decision of the shareholders, deprive the shareholder whose exclusion is proposed of their right to participate in this decision and to vote on the proposal.

CA Grenoble, 4 June 2015, LawLex202300008808JBJ.

Commercial Code, Art. L. 235-1: "The invalidity of a company or an act amending the articles of association can only result from an express provision of this book or the laws governing the invalidity of contracts. Regarding limited liability companies and joint stock companies, the invalidity of the company cannot result from a defect in consent or incapacity, unless it affects all the founding partners. The invalidity of the company also cannot result from clauses prohibited by Article 1844-1 of the Civil Code."

The invalidity of acts or resolutions other than those provided for in the preceding paragraph can only result from the violation of a mandatory provision of this book, except for the first sentence of the first paragraph of Article L. 225-35 and the third sentence of the first paragraph of Article L. 225-64, or the laws governing contracts, except for the last paragraph of Article 1833 of the Civil Code.

Cass. com., 15 March 2023, LawLex202300004241JBJ, JCP E 2023, No 1093, obs. DONDERO; RJDA 2023, No 263; RDC 2023/3, 48, obs. CAFFIN-MOI; LPA July-August 2023, 65, obs. LEQUET.

Montpellier, 12 November 2019, LawLex202300008816JBJ, considering that the insertion of a preemption clause in the statutes of an SAS falls under the freedom of the shareholders, even if it is not provided for by the legal provisions governing this type of company, unlike the approval clause.

See CA Aix-en-Provence, 5 November 2020, LawLex202300008345JBJ, regarding an inalienability clause.

Commercial Code, Art. L. 227-19, para. 2.

CA Limoges, 28 March 2012, LawLex202300008348JBJ.

Company Law (en cours)

576. Free organization of the company

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Les notions juridiques connexes

576. Free organization of the company

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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