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

Company Law (en cours)

In accordance with Article 1852 of the Civil Code, decisions that exceed the powers granted to managers are made according to the provisions of the statutes or, in the absence of such provisions, unanimously by the partners.
Regarding civil companies, the legislator does not distinguish between ordinary and extraordinary meetings, so the decision rests with the partners. In principle, decisions of …

Freedom of partners

In accordance with Article 1852 of the Civil Code, decisions that exceed the powers granted to managers are made according to the provisions of the statutes or, in the absence of such provisions, unanimously by the partners.

Regarding civil companies, the legislator does not distinguish between ordinary and extraordinary meetings, so the decision rests with the partners. In principle, decisions of ordinary general meetings include the approval of the financial statements and the allocation of results , as well as those that increase a partner's contribution to losses, even without their consent, since Article 1836, para. 2, of the Civil Code, which prohibits decisions that increase partners' commitments without their consent, applies only to decisions amending the statutes . Extraordinary general meetings cover serious decisions, such as granting a mortgage guarantee , amending the statutes to increase partners' commitments , or selling the property of a real estate civil company, when the corporate purpose provides for the acquisition and management by any means of real estate assets, without including the sale of properties .

The quorum and majority rules are freely set by the articles of association, failing which, decisions are made unanimously. According to the Court of Cassation, the unanimity referred to in Article 1852 of the Civil Code is not limited to all the partners present or represented at a general meeting, but concerns all the partners of the company, under penalty of nullity of the deliberation . When a statutory provision stipulates that "extraordinary decisions, to be valid, must be adopted by the majority in number of partners present or represented, representing at least three-quarters of the share capital," it must be interpreted as requiring a quorum of partners present or represented holding at least three-quarters of the capital and a vote on the resolution by the majority of them .

During the discussions, the partners are free to vote, provided they do not violate any mandatory public policy provision  and refrain from any abuse of majority or minority. The former refers to a vote contrary to the corporate interest, reflecting the intention to favor the majority to the detriment of the minority. The latter concerns a vote by minority partners that harms the corporate interest by preventing the completion of an essential operation for the company, solely to favor their personal interests to the detriment of all other partners. A minority abuse is constituted by the refusal to extend the term of an SCI, when motivated by the speculative interest of a minority partner, while the specificity of the company and its purpose, which involves prioritizing the availability of premises to partners rather than seeking profits, implies an extension of this term . Conversely, the mere fact that a usufructuary votes for the distribution of profits for their sole benefit cannot be considered an abuse of majority, as such a vote falls within their prerogatives .

Cass. com., 22 February 2005, LawLex202200009365JBJ.

Cass. com., 9 June 2004, LawLex202200003228JBJ; Cass. 1re civ., 8 November 1988, LawLex202300009794JBJ, holding that the prohibition on increasing a partner's commitments without their consent applies only to decisions amending the statutes, but not to those made, in accordance with the statutes, for the purpose of executing the corporate purpose.

Cass. com., 28 March 2000, LawLex202300009792JBJ, emphasizing that the extraordinary general meeting of an SCI, which, with the unanimous consent of the partners, granted full powers to its manager to provide a mortgage guarantee, cannot subsequently claim the invalidity of this act on the grounds of its non-conformity with the corporate interest.

Cass. com., 13 November 2003, LawLex202200006546JBJ.

Cass. 3e civ., 6 September 2011, LawLex202200006155JBJ.

Cass. 3e civ., 5 January 2022, LawLex202200010112JBJ, D. 2022, 403, obs. COURET, DAIGRE and BARRILLON; RJ com. 2022, No 4, 393, obs. LE GROG; Rev. sociétés 2022, 167, obs. DONDERO; RTD com. 2022, 323, obs. LECOURT; Gaz. Pal. 15 March 2022, obs. GALLOIS-COCHET.

Cass. com., 12 October 2022, LawLex202200011215JBJ, JCP E 2023, No 1074, note DONDERO; Gaz. Pal. 14 March 2023, 64, note BUCHBERGER.

Cass. com., 13 November 2003, LawLex202200006546JBJ, holding that a partner who cast a favorable vote on the proposed resolution is not, by that fact alone, deprived of interest in pursuing its annulment, particularly when invoking the violation of a mandatory public policy provision, sanctioned by an absolute nullity, which can be requested by any partner.

Cass. 3e civ., 7 December 2023, LawLex202300014347JBJ.

Company Law (en cours)

666. Freedom of partners

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

666. Freedom of partners

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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