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

Company Law (en cours)

As in many companies, the assessment of the scope of managers' powers differs depending on whether it is considered in relation to the shareholders or in relation to third parties to the company.

Article 1848, para. 1, of the Civil Code states that “in relations between partners, the manager may perform all management acts required by the interest of the company.” A management act is considered in line with the company's interest if it is useful or appropriate. According to the second paragraph of this text, in the case of multiple managers, each exercises management powers separately, subject to the opposition of the other or others to the criticized operation . However, the third paragraph conditions the manager's exercise of prerogatives in relations between partners on the absence of contrary statutory provisions, allowing partners to limit these and require prior authorization for certain acts by a collective decision. An SCI can invoke, against the managing partner requesting reimbursement for work done on the property, the statutory clauses limiting his powers, as he is not a third party to the company contract . After initially holding that when the drafting of the statutes is very broad, such as those providing that the purpose of an SCI is “the management by lease or otherwise” of its assets, the manager is authorized to allow any form of occupation, including free of charge, particularly for the benefit of partners , the Third Civil Chamber now considers that statutes not indicating, in the corporate purpose, the ability to make a property owned by the SCI available free of charge to partners, do not allow such availability by the manager alone, but require authorization from the general meeting of partners, deciding under the conditions provided for amending the statutes . Conversely, the exclusion of a partner from a civil company, decided by the manager without consulting the partners, is valid as long as the statutes expressly grant him such power .

Article 1849, para. 1, of the Civil Code provides that “in dealings with third parties, the manager binds the company by acts falling within the corporate purpose.” The acts in question may concern routine management but also operations with significant consequences for the company, such as acts of disposition on real estate belonging to it, provided they are expressly included in the definition of the corporate purpose and fall within its scope. Similarly, the statutes of a real estate company (SCI), which grant the management the broadest powers to act on its behalf for the realization of its corporate purpose and do not require any prior authorization from the collective of partners for making important decisions, confer the power to consent to a waiver of claims . Apart from compliance with the company's purpose, the act must, to be enforceable by the third party against the company, have been performed in its name by its legal representative. The relative nullity of an act concluded by a company without a manager can, however, only be invoked by the company itself and not by the third-party co-contractor . In the case of multiple managers, they separately hold management powers: opposition by one of them to the acts of their co-manager is ineffective against third parties unless it is established that they were aware of it. Finally, statutory clauses that limit the powers of managers are unenforceable against third parties, even if they were aware of them .

For an application, See Cass. 3e civ., 16 January 2020, LawLex202200006436JBJ, admitting the ability for one of the co-managers of a family real estate partnership to act in setting and paying an occupancy indemnity against the other statutory co-manager, as long as the latter did not oppose this decision.

Cass. 3e civ., 25 May 2005, LawLex202300010467JBJ.

Cass. 3e civ., 11 February 2014, LawLex202300010468JBJ.

Cass. 3e civ., 2 May 2024, LawLex202400003473JBJ.

Cass. 3e civ., 25 May 2005, LawLex202300001640JBJ.

Cass. 3e civ., 29 January 2008, LawLex202300010469JBJ.

Cass. 1re civ., 12 November 2015, LawLex202100003188JBJ.

Cass. 3e civ., 24 January 2001, LawLex202300009798JBJ.

Powers of the manager

STORCK, FAGOT, de RAVEL d'ESCLAPON, The governance of civil companies, JCP N 2020, 1272.

669. Powers of the manager