Sanction applicable to an act or a deliberation taken in breach of the articles of association of a SAS (simplified joint-stock company).

A change in the case law of the French Supreme Court : a deliberation of the shareholders taken in breach of the clauses determining the competence, the forms and the conditions of collective decisions is likely to be null and void if this violation has been of such a nature as to influence the decision-making process. This nullity is not automatic, it is optional and can be requested by any interested person.

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The term of a shareholders’ agreement may be equal to the duration of the company.

A shareholders’ agreement entered into for the duration of the company is lawful and constitutes a fixed-term contract. In 2007, the French Supreme Court considered that a shareholders’ agreement entered into for the duration of the status of shareholder of his signatories was a contract of indefinite duration, which could therefore be terminated unilaterally by the signatories, subject to reasonable notice period. This approach of the French Supreme Court had led practitioners to set a fixed duration in the shareholders’ agreements, generally between 10 and 20 years, in order to preserve the stability of the company and to avoid that the signatories unilaterally terminate the shareholders’ agreement.

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Law of adaptation to EU law n° 2023-171 of 9 March 2023: what changes for corporate law ?

Shareholders’ equity below half of the share capital : the “DDADUE 3” law offers more flexibility by providing that if the financial situation of the company is not regularized, the share capital will have to be reduced to a certain minimum threshold, that will soon be set by decree. It is only if the share capital is not reduced to this minimum threshold, which will be determined according to the size of the company’s balance sheet, that any interested person can request the judicial dissolution of the company.

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The texts on statutory exclusion clauses in SAS (simplified joint stock company) comply with the constitutional right of ownership.

The articles of association of an SAS (simplified joint stock company) can provide that a shareholder may be forced to sell his/her/its shares, under the conditions that the articles of association determine (Article L.227-16, para. 1 of the French Commercial Code). Such an exclusion clause may be adopted or amended without a unanimous decision of the shareholders, under the conditions and in the form provided for by the articles of association (Article L.227-19, para. 2 of the same code). The Conseil constitutionnel had been referred of several preliminary questions of constitutionality (QPC) regarding the conformity of these provisions with the right of ownership, provided by articles 2 and 17 of the Déclaration des Droits de l’Homme et du Citoyen of 1789 (DDHC).

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