Your company in London, New York, Dubai or Singapore owns a French subsidiary, and the person running it day to day sits in Paris or Lyon while you sit thousands of kilometres away. Who can legally run that subsidiary, how do you appoint them without flying in, how do you control what they sign and spend, and how do you remove them if the trust breaks? French company law answers each of these questions precisely, and the answers differ depending on whether the subsidiary is a SAS (société par actions simplifiée, simplified joint-stock company) or a SARL (société à responsabilité limitée, limited liability company). This guide explains, for a foreign parent company and its officers, how to put your people in charge of a French subsidiary, supervise them from abroad and replace them when needed, with the exact statutes, deadlines and court decisions that govern real cases.
The starting point reassures foreign groups: a French subsidiary, even wholly owned from abroad, is a French legal person with its own assets, and the parent’s liability is in principle limited to its contributions. But that shield has documented holes. The directors of a foreign parent that chairs a French SAS carry the same duties as a French chairman, the parent itself can be held jointly liable, and if the subsidiary collapses with unpaid debts, both the parent company and the individual who actually ran it can be ordered to pay for the shortfall. Distance does not dilute these duties; it makes written procedures, filed appointments and supervised accounts more important, because a French judge reviewing the case years later will read the Kbis extract (the official company identity certificate issued by the greffe, the court registry), the filed decisions and the bank movements, not your recollection of a phone call.
I. How Do You Put Your People in Charge of a French Subsidiary From Abroad?
A. Who Can Legally Run Your French Subsidiary: Foreign Parent as President, Local Director or Manager?
In a SAS, the articles of association (statuts) design the management freely: “Les statuts fixent les conditions dans lesquelles la société est dirigée.” (Article L.227-5 of the Commercial Code). The one mandatory officer is the president, who represents the company towards third parties: “La société est représentée à l’égard des tiers par un président désigné dans les conditions prévues par les statuts.” (Article L.227-6 of the Commercial Code). Crucially for groups, that president can be a legal entity, including your foreign parent company. The statute then pierces the corporate veil in a precise way: “Lorsqu’une personne morale est nommée président ou dirigeant d’une société par actions simplifiée, les dirigeants de ladite personne morale sont soumis aux mêmes conditions et obligations et encourent les mêmes responsabilités civile et pénale que s’ils étaient président ou dirigeant en leur nom propre, sans préjudice de la responsabilité solidaire de la personne morale qu’ils dirigent.” (Article L.227-7 of the Commercial Code). If your British limited company chairs your French SAS, the individuals who direct the British company carry a French chairman’s civil and criminal duties, and the British company itself is jointly liable with them. Appointing the parent as president therefore centralises control, but it exports French directors’ liability straight to the foreign boardroom.
Most foreign groups combine the two levels: the parent company as president or sole shareholder, plus a local individual as general manager (directeur général) or deputy, designated in the articles with defined powers. Towards outsiders, that local officer binds the subsidiary fully, because purely internal limits cannot be invoked against third parties: “Les dispositions statutaires limitant les pouvoirs du président sont inopposables aux tiers.” (Article L.227-6 of the Commercial Code). A supplier signing with your Paris general manager deals with the company even if the manager exceeded a secret spending cap. Towards the inside, exceeding the cap still engages the manager’s liability to the company, which is why the articles should set explicit internal thresholds for borrowing, hiring, signing leases and opening bank facilities above defined amounts, with a written parent pre-approval procedure that works by email from abroad.
In a SARL subsidiary, the framework is statutory rather than contractual. The company “est gérée par une ou plusieurs personnes physiques” (Article L.223-18 of the Commercial Code): the gérant (manager) must be a named individual, never a company. A foreign parent cannot itself be gérant of a SARL; it must appoint a person, typically a trusted local executive or one of its own officers in a personal capacity. That manager holds wide powers: “Dans les rapports avec les tiers, le gérant est investi des pouvoirs les plus étendus pour agir en toute circonstance au nom de la société, sous réserve des pouvoirs que la loi attribue expressément aux associés.” (same article). The gérant’s personal exposure is spelled out by a dedicated liability provision: “Les gérants sont responsables, individuellement ou solidairement, selon le cas, envers la société ou envers les tiers, soit des infractions aux dispositions législatives ou réglementaires applicables aux sociétés à responsabilité limitée, soit des violations des statuts, soit des fautes commises dans leur gestion.” (Article L.223-22 of the Commercial Code). Foreign owners sometimes assume that a nominee manager shields them; the statute says the opposite, because instructing a manager from abroad while letting him sign can make the hidden instructor a de facto director (dirigeant de fait), liable as such. Give real instructions in writing, through the shareholder’s proper decision channels, and never run the subsidiary through informal daily orders to a figurehead.
One structural choice follows from this comparison. If the foreign parent wants to hold the chairmanship itself and rule through board resolutions, the SAS is the natural vehicle. If the group prefers a single identified individual running the French operation with statutory guardrails, the SARL works well. Our formation guide walks through the creation steps, the corporate bank account, the Kbis extract, VAT registration and the first hire for founders based outside France: Setting Up a Company in France as a Foreign Founder: Bank Account, Kbis, VAT and Your First Hire. Whichever form you choose, the appointment only becomes effective against third parties once filed and published, which is the subject of the next section.
B. How Do You Appoint Subsidiary Directors Without Flying In: Shareholder Decisions, Filings and the Kbis Update?
The foreign parent exercises its power as shareholder, and the meeting mechanics differ by form. In a SAS, the articles define which decisions the shareholders take collectively and how: “Les statuts déterminent les décisions qui doivent être prises collectivement par les associés dans les formes et conditions qu’ils prévoient.” (Article L.227-9 of the Commercial Code). Well-drafted articles authorise written consultation, electronic signature and votes cast from abroad with a short reply deadline, so the parent appoints or replaces the president by signing a written decision at its own registered office. Where the parent is the sole shareholder, the regime is even simpler: the single shareholder exercises the powers of the collective body, and its decisions are recorded in a dedicated register. Appointment decisions should state the full identity of the appointee, the start date, the term (fixed or indefinite), the remuneration or its calculation method, and any internal power limits, because the filing office (guichet unique, the one-stop shop run by the INPI, the French intellectual property and business formalities office) and the greffe check these details before updating the RCS (registre du commerce et des sociétés, the trade and companies register).
In a SARL, appointments follow statutory majorities: “les décisions sont adoptées par un ou plusieurs associés représentant plus de la moitié des parts sociales.” (Article L.223-29 of the Commercial Code). A parent holding more than half of the shares appoints the gérant alone; failing that first majority and unless the articles say otherwise, a second consultation decides by a majority of votes cast. The appointment can sit in the articles themselves or in a later separate decision, and the articles should be updated or accompanied by the decision when filed. In both forms, the new director’s appointment must then be declared to the one-stop shop, published in a legal notices journal (journal d’annonces légales) where required, and recorded at the RCS; only then does the updated Kbis extract name the new director, and only then can banks, landlords and counterparties rely on his signature. Between signature and publication, have the appointee act under an express written delegation and disclose the pending filing to the other party, so no contract later wobbles on an authority gap.
Foreign appointees trigger extra paperwork that should be prepared before the decision, not after. A non-resident director needs a certified passport copy, proof of address with a certified translation where required, and sometimes a criminal-record equivalent; a parent company appointing itself president of a SAS must provide its own up-to-date corporate documents with apostille or legalisation depending on its home country. The bank will ask for the same file again before granting signature rights on the subsidiary’s accounts, and banks processing non-resident files slowly are a known bottleneck: if every bank refuses, the right-to-an-account procedure through the Banque de France exists, as explained in Your French Bank Refuses an Account From Abroad: Capital Deposit and Droit au Compte. Build the timetable backwards from the date the new director must sign: shareholder decision, legal notice, one-stop-shop filing, RCS registration, fresh Kbis, then bank powers. In practice, allow several weeks, and never promise a counterparty that a not-yet-published director will sign next week.
Remember that the subsidiary acquires its personality, and later each status change its opposability, through registration: “Les sociétés commerciales jouissent de la personnalité morale à dater de leur immatriculation au registre du commerce et des sociétés.” (Article L.210-6 of the Commercial Code). The same register logic governs directors: what is not filed is not enforceable against third parties in good faith. Keep a standing corporate file for the subsidiary at the parent’s office with the current articles, the register of decisions, every Kbis extract and every filing receipt, so any appointment, resignation or removal can be proved instantly from abroad.
II. How Do You Supervise, Pay and Replace Subsidiary Directors From Abroad?
A. How Do You Control Money and Agreements: Director Pay, Related-Party Deals and Annual Accounts?
Paying the subsidiary’s director is the parent’s first control lever and its first trap. A paid president of a SAS belongs to the general social security scheme as an assimilated employee: the statute lists among the persons covered “Les présidents et dirigeants des sociétés par actions simplifiées” (Article L.311-3 of the Social Security Code). Contributions run on actual remuneration at near-executive rates, with strong health, family and pension cover but no unemployment insurance, since a director is not an employee. A majority gérant of a SARL belongs instead to the self-employed scheme, whose dedicated book covers “Les travailleurs non salariés” (Article L.611-1 of the Social Security Code), with lower contributions and thinner cover. A president who takes nothing pays nothing on that mandate but earns no pension quarters either. For the parent, the practical rules are: fix the pay in the appointment decision, pay it through French payroll with payslips and DSN declarations (déclaration sociale nominative, the monthly electronic payroll return), and never top it up through informal foreign payments, because URSSAF (Union de recouvrement des cotisations de sécurité sociale et d’allocations familiales, the agency collecting social contributions) reclassifies hidden pay with penalties and interest. Our guide on controls from abroad details how audits unfold: Your French Company Is Audited by URSSAF and You Live Abroad: Control, Assessment and Penalties. Director pay is deductible from the subsidiary’s taxable result when it reflects actual duties, while both SAS and SARL are in principle liable for corporate income tax on their profits, since the Tax Code makes liable, whatever their purpose, limited liability companies and all legal persons carrying on profit-making operations (Article 206 of the General Tax Code), at a standard rate where “Le taux normal de l’impôt est fixé à 25 %.” (Article 219 of the General Tax Code).
Money flowing between parent and subsidiary, management fees, cash-pooling, brand royalties, intra-group loans, needs a second control: the related-party agreements procedure (conventions réglementées). In a SAS, the auditor or, if none was appointed, the president presents a report to the shareholders “sur les conventions intervenues directement ou par personne interposée entre la société et son président, l’un de ses dirigeants, l’un de ses actionnaires disposant d’une fraction des droits de vote supérieure à 10 % ou, s’il s’agit d’une société actionnaire, la société la contrôlant”, and “Les associés statuent sur ce rapport.” (Article L.227-10 of the Commercial Code). Unapproved agreements still bind the company, but the interested party, and potentially the president and other directors, bear any harmful consequences for the company. In a SARL, the manager or auditor presents a similar report on agreements between the company and one of its managers or shareholders, “L’assemblée statue sur ce rapport. Le gérant ou l’associé intéressé ne peut prendre part au vote et ses parts ne sont pas prises en compte pour le calcul du quorum et de la majorité.” (Article L.223-19 of the Commercial Code). In a wholly owned subsidiary the formality lightens to a mention in the decision register, but the discipline stays: every intra-group flow needs a signed agreement, a market-price justification and a shareholder decision traceable from abroad. Groups that move cash by email instruction with no agreement manufacture, without realising it, the exact file a future insolvency practitioner or tax auditor dreams of.
The annual accounts close the supervision loop. In a single-shareholder SAS, the president prepares the management report and the accounts, and “L’associé unique approuve les comptes, après rapport du commissaire aux comptes s’il en existe un, dans le délai de six mois à compter de la clôture de l’exercice.” (Article L.227-9 of the Commercial Code). Six months from year-end, the parent must approve, then file with the greffe. Our legal-calendar guide lists every recurring deadline for companies run from abroad: Your French Company Has a Legal Calendar: Accounts, Meetings and Filings From Abroad. Use that meeting to review the director: results against budget, use of delegated powers, pending litigation, and whether equity still covers half the capital, because if losses have pushed equity below that line, “les associés décident, dans les quatre mois qui suivent l’approbation des comptes ayant fait apparaître cette perte s’il y a lieu à dissolution anticipée de la société.” (Article L.223-42 of the Commercial Code). A parent that lets a loss-making subsidiary drift without deciding recapitalisation or dissolution within four months of the accounts meeting weakens its own position in every later dispute with creditors.
B. How Do You Remove a Failing Director: Dismissal Rules, Personal Liability and the Insolvency Trap?
Removing a director from abroad follows the same shareholder channels as appointing one, but the two forms diverge on protection against unfair dismissal. In a SARL: “Le gérant peut être révoqué par décision des associés dans les conditions de l’article L. 223-29” (Article L.223-25 of the Commercial Code), so a parent holding more than half of the shares dismisses the gérant by its own decision, unless the articles demand a stronger majority. But “Si la révocation est décidée sans juste motif, elle peut donner lieu à des dommages et intérêts.” (same article). A gérant removed brutally, without genuine cause and without being given a chance to explain himself, regularly obtains damages from the company, and the courts can also remove a manager judicially for lawful cause at any shareholder’s request. The parent should therefore build the file before signing: documented underperformance or misconduct, a formal request for explanations with a reply deadline, a dismissal decision stating real grounds, and simultaneous appointment of the successor so the RCS filing shows no management gap. Announcing the removal by email while the old gérant still appears on the Kbis extract invites him to keep signing, and counterparties relying on the published extract are protected.
In a SAS, dismissal is whatever the articles say: with or without cause, with or without notice, with or without compensation, and judges enforce the clause the parties wrote. That freedom cuts both ways for a foreign parent. Drafted well, the articles let the parent replace a local president within days by written decision; drafted badly or left silent, they can impose unanimity, a long notice or a golden parachute nobody budgeted for. Review the dismissal clause at the same time as the shareholders’ agreement clauses on exit and vesting: Foreign Investor in France: SAS Shareholders’ Agreement Clauses From Abroad. In both forms, secure the practical handover the same day: revoke bank powers, recover keys, badges and devices, change access codes, inform the accountant, the landlord and key clients in writing, and file the change with the one-stop shop immediately. A dismissed director who keeps the company’s bank codes for a week can empty more value than any severance negotiation saves.
Beyond dismissal lies the liability trap that justifies the whole supervision discipline: if the subsidiary enters court-ordered liquidation with debts unpaid, its directors can be ordered to pay the shortfall personally. The Court of Cassation holds that “qu’il résulte de l’article L. 651-1 du code de commerce que la responsabilité pour insuffisance d’actif, encourue sur le fondement de l’article L. 651-2 du même code, est notamment applicable aux dirigeants d’une personne morale de droit privé soumise à une procédure collective et aux personnes physiques représentants permanents de ces dirigeants personnes morales” (Court of Cassation, Commercial Chamber, 8 January 2020, No. 18-15.027). And where a SAS is run by a legal entity, the net goes wider still: “Il résulte de la combinaison des articles L. 227-7, L. 651-1 et L. 651-2 du code de commerce que, lorsque la personne morale mise en liquidation judiciaire est une société par actions simplifiée (SAS) dirigée par une personne morale, la responsabilité pour insuffisance d’actif, prévue par le troisième texte précité, est encourue non seulement par cette personne morale, dirigeant de droit, mais aussi par le représentant légal de cette dernière, en l’absence d’obligation légale ou statutaire de désigner un représentant permanent de la personne morale dirigeant au sein d’une SAS.” (Court of Cassation, Commercial Chamber, 13 December 2023, No. 21-14.579). In plain terms, when a foreign parent chairs the French SAS and the SAS collapses, both the parent company and the individual who legally represents it can be condemned to cover the asset shortfall caused by management faults. A companion guide explains how cessation of payments and directors’ duties work from abroad: Your French Company Is Insolvent and You Live Abroad: Cessation des Paiements and the 45-Day Rule. The lesson is operational: declare cessation of payments within the legal time, stop creating new debts once the cash is gone, and keep the paper trail proving that every continued expense served the orderly handling of the crisis rather than its aggravation.
Conclusion
A foreign parent can fully control a French subsidiary without living in France: chair the SAS directly or appoint a local president or gérant, decide by written consultation from headquarters, set pay through proper payroll, document every intra-group agreement, approve the accounts within six months and file every change so the Kbis extract always names the right person. The price of that control is symmetric liability: the parent’s own officers answer as French directors, the parent itself stands jointly liable, and in liquidation both can be ordered to cover the shortfall. Distance is no defence, but method is: written decisions, filed appointments, supervised spending and fast, documented removals. Run the subsidiary on paper as carefully as you run it in business, and the French vehicle stays what it should be, a tool of expansion rather than a source of personal exposure.