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

Company Law (en cours)

The termination of the manager's powers occurs automatically and ends their status as the legal representative of the company in the event of personal impediment, such as death, personal bankruptcy, disqualification from management, incapacity, or the exercise of a profession incompatible with their functions.
Pursuant to Article 1851, para. 1, of the Civil Code, the manager is removable by a deci …

Dismissal of the manager

The termination of the manager's powers occurs automatically and ends their status as the legal representative of the company in the event of personal impediment, such as death, personal bankruptcy, disqualification from management, incapacity, or the exercise of a profession incompatible with their functions.

Pursuant to Article 1851, para. 1, of the Civil Code, the manager is removable by a decision of the partners representing more than half of the shares, unless otherwise provided by the statutes. However, no statutory derogation regarding the required majority conditions is possible in civil companies for the allocation of buildings for timeshare enjoyment, under Article 6 of Law No 86-18 of 6 January 1986. Similarly, in real estate investment companies, forestry savings companies, and forestry investment groups, the removal of management, which is ensured by a management company, is decided by a majority of the votes held by the partners present or represented, in accordance with Article L. 214-98, para. 2, of the Monetary and Financial Code and, by reference for the GFI, Article L. 331-4-1, II and II bis of the Forestry Code.

The removal of the manager may result in the award of damages if it is deemed abusive, such as when it is decided abruptly without respecting the duty of loyalty, when the manager was not informed of the reasons for their removal, or when it lacks just cause and is based solely on the arbitrary will of the partners, in the absence of any fault by the manager. However, the statutes may freely exclude compensation for a removal decided without just cause .

According to paragraph 2 of Article 1851, the manager is also subject to judicial removal, at the request of any partner, for legitimate cause , it being specified that such a request cannot be submitted to the summary proceedings judge as it involves interference in the company's operations and requires an assessment of appropriateness that belongs solely to the trial courts . The faults committed by the manager of a SCI, which may justify their judicial removal for legitimate cause, at the request of any partner, do not need to be intentional, particularly serious, or incompatible with the normal exercise of corporate functions or contrary to the corporate interest . A legitimate reason is constituted by managing the company without respecting the statutory provisions related to the preparation and approval of accounts and the use of corporate funds for personal purposes . Finally, the request for judicial removal by a partner does not imply that the other partners must be involved to present their possible observations during the proceedings .

Finally, the manager is free to resign from their duties at any time.

Regarding the consequences of the cessation of the manager's duties, Article 1851, para. 3, specifies that, unless otherwise stipulated in the statutes, the removal of a manager, whether a partner or not, does not result in the dissolution of the company. Furthermore, the cessation of the manager's duties, for any reason, must, pursuant to Article 1846-2 of the Civil Code, be published. The unenforceability against third parties of unpublished cessations of duties only concerns the company's commitments towards them and does not apply when the personal liability of the managers is at issue.

Cass. 3e civ., 6 January 1999, LawLex202200008807JBJ.

Aix-en-Provence, 27 June 2024, LawLex202400004920JBJ, holding that the request for judicial removal of a manager is admissible only if it is based on a legitimate cause, which is assessed not only according to the behavior of the person concerned but also, and above all, in consideration of the consequences for the corporate interest or the functioning of the company.

Cass. 3e civ., 12 March 2014, LawLex202200006212JBJ.

Cass. mixte, 16 December 2005, LawLex202300003404JBJ.

Cass. com., 15 January 2013, LawLex202200006448JBJ.

Company Law (en cours)

671. Dismissal of the manager

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

671. Dismissal of the manager

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise