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

Company Law (en cours)

Since the rules concerning limited partnerships and joint stock companies apply to partnerships limited by shares , the latter may be dissolved for all the common causes of dissolution applicable to companies listed in Articles 1844-5 and 1844-7 of the Civil Code and for causes specific to limited partnerships, when they relate to general partners, and to joint stock companies.

Among the common c …

Common causes and causes specific to the SCA

Since the rules concerning limited partnerships and joint stock companies apply to partnerships limited by shares , the latter may be dissolved for all the common causes of dissolution applicable to companies listed in Articles 1844-5 and 1844-7 of the Civil Code and for causes specific to limited partnerships, when they relate to general partners, and to joint stock companies.

Among the common causes for all companies are the expiration of the time for which the SCA was established, the achievement or extinction of the corporate purpose, the annulment of the articles of association, the early dissolution decided by the partners, the early dissolution 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 , the early dissolution pronounced by the court, the effect of a judgment ordering the closure of judicial liquidation for insufficient assets, and any other cause provided for in the statutes. The early dissolution of the company must be pronounced by the extraordinary general meeting .

In addition to these causes of dissolution common to all types of companies, there are several events specific to the SCA.

The SCA ends upon the death of a general partner, unless it is stipulated in the statutes that despite this death, the company continues with the heirs of the deceased general partner . In this case, they become limited partners when they are unemancipated minors. If the deceased partner was the sole general partner and if all his heirs are unemancipated minors, a new general partner must be appointed or the company must be transformed within one year from the date of death. Failing this, the company must be dissolved by operation of law at the expiration of this period .

2) Judicial reorganization or liquidation or prohibition

The SCA may also be dissolved in the event of reorganization or judicial liquidation of one of the general partners and prohibition from engaging in a commercial profession or incapacity affecting one of the general partners, unless, if there is one or more other general partners, the continuation of the company is provided for by the statutes or the partners decide unanimously . In the case of continuation, the value of the ownership interests to be reimbursed to the partner who loses this status is determined in accordance with the provisions of Article 1843-4 of the Civil Code. Any clause to the contrary is deemed unwritten .

3) Share capital below the minimum amount

Since the share capital of the SCA must be at least 37,000 euro , the reduction of the capital to an amount below the minimum can only be decided under the suspensive condition of a capital increase intended to bring it back to at least the minimum amount, unless the company transforms into a company of another form. In case of non-compliance with this rule, any interested party may request the dissolution of the company in court, which cannot be pronounced if, on the day the court rules on the merits, the regularization has taken place .

In accordance with Article L. 225-248 of the Commercial Code, if, due to losses recorded in the accounting documents, the shareholders' equity of the company becomes less than half of the corporate capital, the supervisory board  is required, within four months following the approval of the accounts that revealed this loss, to convene the extraordinary general meeting to decide whether there is a need for the early dissolution of the company.

For an application, See Paris, 8 July 1994, LawLex202200006991JBJ, emphasizing that fundamental disagreements between the limited partners and the general partner regarding the investment policy pursued by the latter, leading to deadlocks causing the paralysis of the company, justify its judicial dissolution.

Commercial Code, Art. L. 225-246, by reference to Art. L. 226-1, para. 2 Commercial Code - Cf. CA Paris, 8 July 1994, LawLex202200006991JBJ, specifying that a resolution, voted by the extraordinary general meeting of shareholders of an SCA, authorizing its early dissolution, is not enforceable against third parties, the partners, and the company itself, as long as it has not been approved by the sole general partner of the company.

Commercial Code, Art. L. 222-10, para. 2, by reference to Art. L. 226-1, para. 2.

Commercial Code, Art. L. 222-11, para. 1, by reference to L. 226-1, para. 1; - See for an illustration, CA Aix-en-Provence, 14 October 2020, LawLex202300006987JBJ; 1 July 2020, LawLex202200007142JBJ; CA Paris, 18 October 2019, LawLex202300006988JBJ.

Commercial Code, Art. L. 222-11, para. 2, by reference to L. 226-1, para. 1.

Commercial Code Article L. 224-2, para. 1.

Company Law (en cours)

561. Common causes and causes specific to the SCA

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561. Common causes and causes specific to the SCA

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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