A foreign shareholder who has found a buyer for shares in a French company can be stopped at the approval stage, even when the buyer has completed its due diligence and the price has been agreed. The immediate question is usually framed as a nationality issue: can a French company refuse a transfer because the buyer is based abroad? The legally useful question is more precise. What do the articles of association require, which corporate body had authority to approve or refuse the transfer, and what does the refusal trigger under the articles or a shareholders’ agreement?
The company form matters. A société par actions simplifiée (SAS) is a French simplified joint-stock company whose governance is largely organised by its articles. The transfer of shares is therefore not analysed by looking only at a standard incorporation form or a current Kbis, the official extract from the French commercial and companies register. The relevant evidence may be in the articles, a shareholders’ agreement, the securities register, the transfer notice, the approval resolution and the correspondence exchanged with the proposed buyer.
This article explains when approval may be required, what a valid refusal does and does not achieve, how a foreign shareholder can challenge an irregular process, and how to prepare an alternative exit. It also addresses the practical documents needed when the seller or purchaser is a foreign company. It complements the firm’s French company formation and corporate-law resource, but focuses on a transfer that has already encountered resistance.
I. Can a French SAS refuse a foreign shareholder’s share transfer?
A. What the approval clause controls in a French SAS
The starting point is the current version of the articles of association. In French, approval is called agrément. The shareholder selling the shares is the cédant; the proposed purchaser is the cessionnaire. The approval clause may give the company, the shareholders, a committee, or another body the power to accept or reject the proposed transferee. It may also describe the route for giving notice, the documents to attach, the voting threshold, the person who signs the decision, and the consequences of silence.
For an SAS, Article L. 227-14 of the French Commercial Code provides: “Les statuts peuvent soumettre toute cession d’actions à l’agrément préalable de la société.” In English, the articles may make any transfer of shares subject to the company’s prior approval. The official text of Article L. 227-14 does not create a free-standing power for a director to reject a buyer in every case. It authorises the articles to organise that restriction. The clause must therefore be read before the proposed transfer is presented as a completed transaction.
The words used in the articles are important. A clause referring to a transfer “to a third party” may not have the same reach as a clause covering transfers between shareholders, transfers to a group company, contributions, gifts, or a change of control of a corporate purchaser. Some articles include a pre-emption mechanism, allowing existing shareholders to buy first. Others combine pre-emption and approval. A clause dealing with a transfer of shares should not automatically be extended to an indirect sale of the parent company, but a change-of-control clause can produce that result if it was drafted to do so. The conclusion depends on the text and the transaction structure.
A foreign buyer should also distinguish the buyer’s legal identity from its ultimate beneficial owners. A purchaser incorporated in the United Kingdom, the United States, Singapore or another jurisdiction may be acceptable under the clause even if its shareholders change, unless the articles or a valid agreement make ownership or control relevant. Conversely, the company may be entitled to request evidence that the purchaser exists, that its representative has authority, and that the transaction does not conceal a prohibited transfer. That request is not the same thing as a refusal. The company should identify the missing document and give the contractual process a meaning that can be audited.
The governance provision is just as important as the transfer clause. Article L. 227-9 of the Commercial Code states that “Les statuts déterminent les décisions qui doivent être prises collectivement par les associés dans les formes et conditions qu’ils prévoient.” The official version of Article L. 227-9 confirms the central role of the articles in defining collective decisions. If the articles reserve approval to the shareholders, a president or management committee may not replace the required vote. If the articles give the president power to approve, a shareholder resolution may be unnecessary but the president must still follow the notice and decision requirements that the articles impose.
A foreign shareholder should ask six concrete questions before arguing about the merits of the proposed buyer. First, does the clause apply to this type of transfer? Second, who must receive the notice? Third, who has the power to decide? Fourth, what quorum and majority apply? Fifth, does the notice have to include a signed transfer deed, the price, the buyer’s registry extract or information about its beneficial owners? Sixth, what does the clause say about a refusal, a deadline and silence? These questions often identify a procedural weakness more quickly than a general argument that the refusal is unfair.
The articles are not the only document. A pacte d’associés, or shareholders’ agreement, may contain consent rights, a right of first offer, a tag-along right, a drag-along right, an exit undertaking, or a valuation formula. The agreement may bind only its signatories. It can create a damages claim or a contractual obligation without necessarily producing the statutory nullity that follows a breach of the articles. The distinction is governed by the binding force of the agreement. Article 1103 of the Civil Code says: “Les contrats légalement formés tiennent lieu de loi à ceux qui les ont faits.” The official text of Article 1103 means that a shareholder cannot treat a carefully negotiated exit agreement as an informal suggestion, while a non-signatory buyer cannot automatically claim every right created by it.
Article 1104 adds that “Les contrats doivent être négociés, formés et exécutés de bonne foi. Cette disposition est d’ordre public.” The official text of Article 1104 matters on both sides. A shareholder should disclose the buyer and the material terms required by the clause. The company should not invent additional conditions, deliberately delay the decision, or use a document request as a disguised permanent veto. Good faith does not remove an approval right, but it controls how a contractual and corporate process is used.
The foreign element increases the documentary burden without changing the basic legal test. The proposed buyer may need to provide a certificate of incorporation, a current commercial-register extract, a board or shareholder resolution authorising the acquisition, the identity of its authorised signatory, registered-office evidence, and beneficial-owner information. “Beneficial owner” means the individual who ultimately owns or controls the entity. The French company may also need an identity document for the signatory and a power of attorney if someone signs in France on behalf of an overseas shareholder.
Whether an apostille, legalisation, certified copy or sworn translation is needed depends on the document, the country of origin, the receiving body and the article or agreement. A foreign company should not assume that an English registry extract can always be filed without translation. It should also not assume that a French translation alone proves the authority of the person who signed. The safest file identifies the issuing authority, the date of the document, the chain of authority and the French translation status. The point is not to make every foreign transaction bureaucratic; it is to prevent a refusal based on a missing document that could have been supplied at the outset.
The date and method of notice must be preserved. If the articles require a registered letter, a courier receipt, an email to a specified address, or service by a French commissaire de justice (judicial officer), a casual message to the president may not start the contractual period. The notice should identify the number and class of shares, the proposed price and buyer, the intended completion date, and the supporting documents. If the deal is conditional, the notice should explain the conditions rather than presenting a non-binding conversation as a final transfer.
The company’s Kbis is useful but incomplete. The Kbis identifies the registered company, its registration number and certain management information. It does not normally replace the internal securities register or prove that a particular share transfer has been approved. The greffe is the registry office attached to the competent commercial court. It may issue the Kbis, but it does not decide whether the private approval process in an SAS was properly conducted. A request to “update the Kbis” is therefore not a substitute for resolving the approval question in the company’s own records.
There is also a difference between a restriction on transfer and a forced exit. Article L. 227-16 of the Commercial Code states that “Dans les conditions qu’ils déterminent, les statuts peuvent prévoir qu’un associé peut être tenu de céder ses actions.” The official text of Article L. 227-16 permits articles to create an exclusion or forced-transfer mechanism in defined conditions. It does not mean that every refusal automatically forces the company to purchase the shares. The articles may contain a buyout route, but the route must be identified and applied according to its own terms.
Finally, approval is not always a question of whether the proposed buyer is “foreign”. Nationality or place of incorporation may be relevant to regulatory compliance, sanctions, sector rules, foreign-investment controls or the information needed to identify the buyer. But an SAS approval clause remains the legal gateway. A refusal should be tested against the wording of the clause, the decision-making rules, the evidence requested and the reason actually given. Replacing that analysis with a broad assertion about overseas purchasers makes a later challenge harder because it does not identify the defective act.
B. What a valid refusal does, and why an irregular refusal can be challenged
The immediate effect of a valid refusal is usually limited: the named buyer cannot be substituted into the company’s shareholder structure through that transfer. The refusal does not automatically erase the selling shareholder’s shares, terminate the shareholders’ agreement, or release the shareholder from obligations. It also does not automatically oblige the SAS to buy the shares unless the articles, another enforceable agreement or a legal mechanism creates that obligation.
Article L. 227-15 provides a particularly strong consequence for bypassing the articles: “Toute cession effectuée en violation des clauses statutaires est nulle.” The official text of Article L. 227-15 is why a seller should not sign privately, receive the price and ask the company to regularise the transaction later. If the approval clause applies and has not been satisfied, the parties may have created a dispute over validity, registration, restitution and damages. A transfer recorded in an internal spreadsheet does not cure a mandatory statutory restriction.
The effect of Article L. 227-15 must nevertheless be connected to the actual clause. A refusal by the wrong body may not be a valid refusal. A purported refusal after the contractual period may have a different consequence from a refusal made inside the period. A refusal based on a requirement absent from the articles may be vulnerable. Silence is especially dangerous: some articles treat silence as approval, some require an express decision, and some provide a specific consequence when the company fails to respond. There is no safe universal rule that silence always approves or always refuses an SAS transfer.
The commercial chamber of the French Supreme Court illustrated the importance of identifying who may invoke a defective approval in its decision of 14 December 2004, appeal no. 00-20.287. The official Legifrance decision states, in the context of the company form and clause examined there, that “seuls la société ou les actionnaires dont l’agrément est requis” could invoke the nullity arising from a failure or irregularity in the approval. The decision should not be converted into a universal answer for every modern SAS dispute. Its practical lesson is that the claimant, the approval right and the precise statutory mechanism must be identified. A proposed buyer should not assume that it can claim nullity in the same way as the company or an entitled shareholder.
An irregular refusal can take several forms. The company may have relied on an approval clause that does not cover the buyer or the transaction. The notice may have been sent to an old address or without a document that was not required. The decision may have been signed by a person who had no authority, or adopted without the required vote. The minutes may not match the notice. The company may have rejected the buyer while refusing to disclose the decision or the reason. Each defect has a different evidential and procedural consequence. The first letter should therefore request the exact clause, the decision, the voting record and the date on which the company considers the refusal effective.
Good faith can also matter where the company appears to be using approval as a purely obstructive device. Article 1104 does not require the shareholders to accept a buyer they do not want whenever the clause grants discretion. It does require the parties to perform their contractual process honestly. For example, a company that repeatedly requests documents already supplied, changes the decision-maker after the notice, refuses to convene the body identified in the articles, or uses the foreign buyer’s administrative burden to make a sale impossible may expose itself to a different analysis from a company that applies a clear, neutral requirement to every purchaser.
The seller should be careful with the word “discrimination”. A refusal is not automatically unlawful merely because the buyer is foreign, and a claim should be tied to evidence and an applicable rule. The stronger argument may be that the company applied the approval clause inconsistently, acted in bad faith, breached a shareholders’ agreement, or departed from the corporate procedure. If a regulated sector or a sanctions issue is involved, the foreign element may have a legitimate legal significance. A lawyer can separate that question from a convenient but unsupported allegation about nationality.
The recent commercial-chamber decision of 11 March 2026, appeal no. 24-12.807, is useful when a transfer is connected with an option or a preliminary contract. The official Legifrance decision, ECLI FR:CCASS:2026:CO00132 records the interpretation that “la levée de l’option devait intervenir avant l’agrément” under the agreement examined by the lower court. The decision is not a general rule that approval must always precede every exercise of an option. It shows instead that the wording and chronology chosen by the parties can determine whether the proposed transfer was regular. A foreign investor with a signed term sheet, option or conditional share-purchase agreement should map each event against the articles and the contract before asserting that the sale was complete.
The 2026 decision is particularly relevant where the buyer claims that the company’s refusal came too late or that the option had already produced an unconditional sale. The answer may depend on whether the option, the approval condition, the notice and the completion document were drafted as separate stages. The contract may make approval a condition to formation, a condition to performance, or a corporate step after the parties have reached an agreement. Those are not interchangeable. A court will read the documents together; a commercial email cannot safely rewrite them after the refusal.
A proposed buyer may also have its own claim. If the seller promised that approval had been obtained, concealed the clause or breached an exclusivity undertaking, the buyer may seek contractual remedies against the seller. That claim does not necessarily give the buyer a right to become a shareholder against the company’s valid approval rights. Article 1124 of the Civil Code describes an option as follows: “La promesse unilatérale est le contrat par lequel une partie, le promettant, accorde à l’autre, le bénéficiaire, le droit d’opter”. The official text of Article 1124 supports the distinction between the buyer’s contractual option and the corporate act needed to complete a restricted transfer.
The refusal may therefore be valid, invalid, or incomplete in its legal effects. It can be valid against the named buyer while leaving the shareholder free to propose another buyer under the articles. It can be procedurally defective but still require a new approval process rather than automatic registration. It can breach a shareholders’ agreement while complying with the articles. The document trail should establish which of these situations exists before anyone signs a second transfer or starts court proceedings.
II. What can a foreign shareholder do after the transfer is refused?
A. How to challenge the refusal and protect the price
The first response should preserve the transaction, not escalate the language. The shareholder should save the signed articles and every amended version, the shareholders’ agreement, the current Kbis, the cap table, the proposed share-purchase agreement, the price calculation, the buyer’s corporate documents, the approval notice, proof of delivery, meeting invitations, minutes, voting results, the refusal and all follow-up messages. Foreign documents should be kept both in their original form and in the translation sent to the company. A later dispute can turn on the date of a document, the version of a clause or the exact attachment that accompanied the notice.
The second step is a clause-by-clause audit. Identify the transfer restriction, the decision-maker, the required notice, the deadline, the quorum, the majority, the possible reasons for refusal, the consequence of silence, and the buyout or alternative-buyer mechanism. Check whether the company relied on a provision that was amended after the notice or that was not properly adopted. Check whether the buyer described in the notice is the same entity that appears in the draft transfer deed. If the purchaser is a group company, explain the chain of control rather than assuming that the company will infer it from a foreign registry extract.
The third step is to request the corporate record in a controlled written notice. The letter can ask the company to identify the exact article relied upon, the date and body of the refusal, the voting rule used, the documents considered missing, and the next step required by the articles. It can reserve the shareholder’s rights, request that the securities register not be altered inconsistently with the dispute, and propose a short period for regularisation. The letter should avoid conceding that the refusal was valid merely because it uses polite language. If the articles specify service through a particular channel, use that channel as well as ordinary email.
The available remedy depends on the defect and the parties. A court may be asked to examine the validity of a decision, the performance of a contractual undertaking, the consequences of a defective approval, or a request for damages. In an urgent case, interim proceedings may be considered where a document, vote or registration is about to make the harm difficult to reverse. A court does not automatically order a company to accept every buyer simply because the seller has a commercial reason to exit. The relief must correspond to the clause, the breach and the evidence.
The commercial chamber’s decision of 10 July 2018, appeal no. 16-26.137, is a useful warning for SAS shareholders dealing with a private approval procedure. The official Cour de cassation decision concerned a SAS dispute involving Luxembourg Infopatient and the approval of a transfer instrument. The decision cannot replace an examination of the articles in a different company. It does show why a party should identify the approval route actually authorised by the company’s articles rather than assume that approval must have taken the form of a standard shareholders’ meeting or a particular French registry filing.
The price is a separate issue. A refusal may lead to an alternative buyer, a shareholder buyout or a company repurchase, and the value may be disputed even when the transfer restriction is valid. Article 1843-4 of the Civil Code addresses cases in which the law refers to the provision to determine the price of a transfer or buyout. It states that “la valeur de ces droits est déterminée, en cas de contestation, par un expert désigné”. The official text of Article 1843-4 provides that the expert may be appointed by the parties or, absent agreement, by the competent court according to the statutory procedure. Where they exist, the expert must apply the valuation rules and methods set out in the articles or in an agreement binding the parties.
That mechanism is not a licence to choose the valuation method after the refusal. The shareholder should locate the price clause, the valuation date, the treatment of debt and cash, the treatment of shareholder loans, the class rights, earn-out conditions, currency conversion and any discount or premium. If the articles refer to an expert, identify whether the expert is appointed by agreement, by the president of the commercial court, or under another defined route. A valuation memorandum should show the source of financial figures and the reason for each assumption. A foreign buyer’s exchange rate or financing structure should not be confused with the underlying value of the French SAS shares.
The evidence may also support a bad-faith argument. A sudden refusal after the company accepted the buyer’s documents, a refusal followed by a demand for a materially lower price, or a refusal that is lifted only after the seller abandons a contractual right can be relevant. None is automatically decisive. The timeline should show what was promised, what was delivered, what the company requested, what it decided and how comparable transfers were treated. A lawyer can then choose between a formal challenge, a negotiated buyout and court action without overstating the case.
The proposed buyer should be kept informed but should not be asked to take steps that assume approval. It may sign a conditional agreement, extend the long-stop date, place funds in escrow, or agree a replacement purchaser if the contract allows. It should not present itself to the company’s bank, customers or French registry as the shareholder before the transfer has been approved and completed. If the buyer is an overseas company, its directors should approve any amendment to the transaction and preserve the authority documents needed for a future closing.
The shareholder also needs to consider the correct court and service route. A dispute concerning the acts of a commercial company will often engage the commercial court connected with the company’s registered office, but the agreement, the relief sought and any international element must be checked. A foreign shareholder may need a French address for service, a French-speaking representative, a power of attorney and a translation of key exhibits. An English-language business relationship does not prevent a French court from applying French procedural and company law. It does make early evidence organisation more valuable.
Before starting proceedings, the shareholder should calculate the commercial cost of remaining in the company. The refusal may delay a planned financing round, trigger a change-of-control clause, affect tax reporting or leave the shareholder responsible for future shareholder decisions. A legal challenge can protect the exit but also reveal confidential information to the buyer, the company and the court. A negotiated approval or buyout may be better if the price and release are secured. Negotiation should be conducted with a clear reservation of rights and without allowing the company to use discussions to let contractual deadlines expire.
B. How to organise an alternative exit and complete the cross-border formalities
If the refusal is valid, the next question is not simply “can I sue?”. It is “what exit route do the articles and the agreement provide?”. The articles may require the company or existing shareholders to present an alternative purchaser. They may give shareholders a pre-emption right. A shareholders’ agreement may contain tag-along rights, allowing a minority holder to sell alongside a controlling shareholder, or drag-along rights, requiring a sale to a third-party purchaser under defined conditions. A forced-transfer or exclusion clause may also exist, but it must be applied with its own notice, decision and price rules. These mechanisms should be read together rather than used selectively to create a result the parties did not agree.
The company may propose to buy the shares itself, or the existing shareholders may offer to purchase them. The seller should ask four practical questions before accepting: who is legally purchasing, what is the price and valuation date, when will the funds be paid, and what happens if the approval or company-borrowing step fails? The agreement should deal with release from shareholder obligations, the treatment of dividends declared before completion, the transfer of shareholder loans, confidentiality, tax cooperation and the delivery of corporate records. A promise to buy is not the same as cleared funds or an executed transfer.
The closing file should be built as a cross-border transaction file. It should include the latest articles, the company’s Kbis and registration information, the relevant approval or alternative-buyer decision, the signed transfer deed, the securities movement order if used by the company, the share register entry, the price statement and proof of payment. The seller should ask for a copy of the updated register showing the transfer. The Kbis may remain unchanged because a share transfer does not necessarily alter the company’s registered management or registered office. The internal securities records remain essential.
For an overseas seller or buyer, add the certificate of incorporation or equivalent registry extract, a current status certificate where available, a board or shareholder resolution approving the transaction, the authorised signatory’s identity document, evidence of signing authority, beneficial-owner information and the agreed French translation. If the country requires an apostille or legalisation for the document to be used in France, arrange it before closing. If the company’s articles require a French-language deed or a particular form of notice, follow that requirement. A bilingual document can reduce misunderstanding, but it should state which language controls if the parties intend that result.
The tax and filing sequence must be kept separate from the corporate approval. The French tax administration states that a transfer recorded in a deed must generally be registered within one month. A transfer of non-listed shares, including SAS shares, that is not recorded in a deed may also be subject to a declaration within one month. The ordinary registration duty for transfers of shares in a company whose capital is not mainly real estate is generally 0.1 percent, subject to the applicable rules and facts. The official impots.gouv.fr guidance on transfers of corporate rights and the official Form 2759-SD should be checked for the transaction date and filing route.
Tax registration does not itself make the buyer a shareholder. It records the transfer for tax purposes after the corporate conditions have been addressed. The transfer deed, approval, payment and securities-register entry must remain aligned. A foreign buyer should also obtain separate advice on capital gains, treaty relief, withholding, currency conversion and the tax residence of the seller. Those questions may affect the price and reporting, but they do not turn an invalid transfer into a valid one.
The French National Industrial Property Institute, or INPI, operates the one-stop channel for many company formalities. Its National Register of Enterprises is commonly abbreviated RNE. The official INPI information on the RNE explains the register and the role of the one-stop shop. The INPI page on filing corporate acts includes the filing route for acts relating to corporate life. A share transfer does not mean that every detail of the shareholder register appears on the Kbis or that every transaction needs the same INPI filing. The company should identify whether the transfer changes a beneficial owner, management, registered office, control information or another filing item.
The beneficial-owner update deserves attention where the buyer acquires control. Beneficial-owner information concerns the individual who ultimately owns or controls the company, not merely the name of the corporate buyer. A change in control can require a formal update even when the French company’s name and president remain the same. The company should use the INPI route and the current instructions rather than assume that filing the transfer tax form closes every compliance obligation.
Banks and payment providers may ask for a fresh Kbis, a new ownership chart, the approval minutes, tax-registration evidence and documents for the overseas beneficial owners. The bank’s compliance request does not determine whether the articles have been complied with, but a refusal can delay payment or the release of escrow funds. The parties should agree who supplies each document, who pays translation and legalisation costs, and what happens if the bank rejects a document. If the price is paid in a currency other than euros, state the conversion source and date in the completion statement.
An alternative purchaser can solve the immediate identity problem but not an underlying governance problem. If the articles require approval of every new third-party shareholder, the replacement buyer must go through the same route. If the refusal was caused by an incomplete file, a new buyer should receive a documentary checklist before its offer becomes binding. If the refusal was a deliberate obstruction, the seller should preserve the first refusal as evidence rather than simply restarting the process and losing the chronology.
There are also situations in which remaining a shareholder is the least risky short-term choice. A seller should not surrender voting rights, dividends, information rights or a claim to a future sale without a signed agreement and payment security. The fact that a purchaser is waiting abroad does not erase the existing shareholder’s rights. At the same time, continuing to hold shares can leave the seller exposed to future capital calls, shareholder votes, information obligations or a new financing round. The exit plan should address the period between refusal and completion.
An efficient response can be organised in a short sequence. First, freeze the evidence and confirm the exact article version. Second, compare the notice and buyer documents with the clause. Third, obtain the decision and minutes from the company and verify the decision-maker, vote and date. Fourth, send a reservation-of-rights notice proposing correction, approval or the contractual alternative buyer. Fifth, obtain an independent price analysis if a buyout is offered. Sixth, prepare the corporate, tax, translation and beneficial-owner file for the chosen exit. Seventh, complete the transfer only after the approval condition, payment mechanics and register entry are aligned.
This sequence is particularly important for a founder who manages the French company from abroad. A remote director or shareholder should not rely on a local accountant’s informal statement that “the Kbis is enough”. The Kbis proves certain public registration facts; it does not show whether the approval clause was triggered, whether the proper body voted, whether the transfer deed was signed by an authorised representative, or whether the securities register is accurate. Those are separate legal and evidential questions.
The same caution applies to the company’s own response. It should not reject a foreign purchaser by a one-line email if the articles require a formal decision. It should identify the applicable clause, record the body and vote, retain the documents considered, and explain the next step without making a promise the articles do not support. Clear process protects the company if the refusal is challenged and may allow the parties to negotiate an alternative exit without an unnecessary dispute.
Conclusion
A French SAS can require approval before a share transfer, but the power comes from the articles of association and must be exercised through the procedure those articles define. A foreign shareholder should therefore test the clause, the decision-maker, the notice, the deadline, the vote, the effect of silence and the available buyout or replacement-buyer route. A refusal is not automatically a permanent block, yet it is not automatically an obligation for the company to buy the shares either.
The most effective response is documentary and chronological. Preserve the articles, agreement, notice, foreign corporate documents, decision and minutes; challenge a defective process with a targeted reservation of rights; and keep a valid alternative exit open. If the transaction proceeds, align approval, deed, payment, securities-register entry, tax registration and any INPI beneficial-owner filing. A Kbis or a tax form cannot substitute for approval. Before the seller or the foreign buyer signs a second transfer, a review of the articles and the refusal record can determine whether the right strategy is regularisation, negotiation, valuation or court proceedings.
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