You live in London, New York, Dubai or Singapore, and the French company you built with a co-founder has stopped moving. The bank asks for two signatures and one never comes. The annual accounts are ready but the collective decision to approve them never reaches a majority. The co-founder refuses every buyer, blocks every capital increase, answers every proposal with silence, and still draws on the company. Distance makes everything slower: you cannot knock on the office door, you receive the greffe (the court clerk office that keeps the trade register) letters weeks late, and your Kbis (the official company identity extract issued by the greffe) still shows a company that exists on paper but no longer decides anything. This article explains, for a foreign founder who runs a French SAS (société par actions simplifiée, the flexible joint-stock company most foreign founders choose) from abroad, the two legal exits French law actually offers when co-founders deadlock: forcing the blocking co-founder out through an exclusion clause written into your articles, with a buyout price fixed by agreement or by expert, and asking a court to dissolve the company early for justes motifs (just grounds) when paralysis makes survival impossible. It also shows how to file and argue each route from Paris and Ile-de-France while you live outside France, which documents to gather first, and which alternatives can save the business without killing it.
I. How to force out the co-founder who blocks your French SAS from abroad
A. What your SAS articles must say before you can exclude a co-founder, and how the courts read that clause?
French SAS law starts from freedom of contract, and exclusion is no exception. The statute does not exclude anyone by itself. It lets your articles do it. Article L227-16 of the Commercial Code provides that « Dans les conditions qu’ils déterminent, les statuts peuvent prévoir qu’un associé peut être tenu de céder ses actions. » The same article adds that « Ils peuvent également prévoir la suspension des droits non pécuniaires de cet associé tant que celui-ci n’a pas procédé à cette cession. » In plain English: your articles (statuts, the constitutional contract of the company) may list the situations in which a shareholder must sell, who decides, by what majority, with what notice and what defence rights, and they may suspend the non-financial rights of that shareholder, mainly voting rights and information rights, until the transfer happens. Dividends and other financial rights survive, because suspension covers only non-pecuniary rights. If your articles say nothing, no exclusion is possible, however serious the misconduct, however total the blockade. Judges do not invent an exclusion power. They enforce the one you wrote, or they refuse to exclude.
That single sentence reshapes everything a foreign founder should review tonight. Open your articles and your shareholders agreement side by side and ask five questions. First, does an exclusion clause exist at all, and does it cover your situation: persistent absence from votes, refusal to approve accounts, competing activity, loss of a professional licence, criminal conviction affecting the business, or simply defined deadlock after two failed collective decisions? Second, who triggers it: the president alone, a defined majority, or every shareholder except the targeted one? Third, what procedure applies: formal notice by registered letter or bailiff, minimum notice period, written invitation to present observations, access to the file, reasoned decision? Fourth, what happens to the shares: purchase by the remaining shareholders in proportion to their holdings, purchase by a named third party, or repurchase by the company itself followed by resale or cancellation? Fifth, how is the price fixed: formula in the articles, reference to annual accounts, independent valuation, or expert determination? Each answer must appear in writing before the dispute. Courts annul exclusions pronounced under a clause adopted after the facts to target a named person without following the adoption rules, and they annul exclusions pronounced without respecting the contractual defence rights, even when the underlying grievance looks strong.
A second statutory tool covers a narrower but common foreign-founder pattern: the corporate co-founder whose control changes hands. Article L227-17 of the Commercial Code provides that « Les statuts peuvent prévoir que la société associée dont le contrôle est modifié au sens de l’article L. 233-3 doit, dès cette modification, en informer la société par actions simplifiée. » It continues that « Celle-ci peut décider, dans les conditions fixées par les statuts, de suspendre l’exercice des droits non pécuniaires de cet associé et de l’exclure. » Control here means the company-law concept of article L. 233-3, direct or indirect holding of a majority of voting rights or power to appoint most corporate officers. When your co-founder is a foreign holding company and that holding is sold, merged or restructured without telling you, this clause lets the SAS suspend and exclude the changed shareholder, provided the articles organised that consequence in advance. The same paragraph extends the mechanism, under the same conditions, to a shareholder who acquired that status through a merger, split or dissolution. For groups with an SAS operating subsidiary in France and a holding abroad, this clause is the early-warning radar. Without it, you learn of the change of control from the BODACC (Bulletin officiel des annonces civiles et commerciales, the gazette where company life events are published) months later, when the new controller already votes.
Voting on exclusion deserves its own check, because the Cour de cassation (the French supreme court for civil and criminal matters) polices the boundary between what the majority may change and what requires unanimity. Article L227-19 of the Commercial Code draws that line. It states that « Les clauses statutaires mentionnées aux articles L. 227-14 et L. 227-16 ne peuvent être adoptées ou modifiées que par une décision prise collectivement par les associés dans les conditions et formes prévues par les statuts. » Exclusion clauses therefore follow the majority your articles already set for collective decisions, which article L227-9 leaves to the articles to define when it provides that « Les statuts déterminent les décisions qui doivent être prises collectivement par les associés dans les formes et conditions qu’ils prévoient. » By contrast, the same article L227-19 provides that « Les clauses statutaires visées aux articles L. 227-13 et L. 227-17 ne peuvent être adoptées ou modifiées qu’à l’unanimité des associés. » Approval clauses and change-of-control exclusion clauses need unanimity to be introduced or amended. The practical lesson for a founder abroad is direct: if your articles contain no exclusion clause today, adding one now requires the targeted co-founder’s vote under the applicable rule, and that vote will likely be negative once the conflict is open. The time to negotiate exclusion, approval and inalienability clauses is at incorporation or at the funding round, when everyone still signs. After deadlock sets in, you work with the clause you have, not the clause you wish you had. A related decision of the Cour de cassation of 2 February 2010, appeal number 09-10.701, shows how strictly judges review collective decisions in SAS companies when voting rights and pre-emption clauses change: the court quashed an appeal ruling that had decided on a ground raised by the court itself without inviting the parties to comment, recalling article 16 of the Code of Civil Procedure. The full ruling is published at Cour de cassation, chambre commerciale, 2 fevrier 2010, n° 09-10.701. The message for exclusion votes is identical: respect the articles, respect adversarial debate, keep minutes, or the whole operation falls.
The most sensitive voting question is whether the targeted shareholder votes on his own exclusion. Article 1844 of the Civil Code states the principle that « Tout associé a le droit de participer aux décisions collectives. » Every shareholder has the right to take part in collective decisions. Your articles may organise the exclusion vote and, as the litigation around SAS company LT Capital showed, may even provide that the shareholder whose exclusion is proposed takes part in the vote, but they must say so clearly and the clause must have been regularly adopted. In that case, which reached the Cour de cassation as a constitutional challenge on 12 October 2022, appeal number 22-40.013, an employee-shareholder who had resigned from his salaried duties was excluded by an extraordinary meeting after the articles had been amended to let the targeted shareholder vote on his own exclusion, and he challenged both the amendment and the exclusion. The full referral ruling is published at Cour de cassation, chambre commerciale, 12 octobre 2022, n° 22-40.013. The dispute did not create a general right to exclude without a clause. It confirmed that exclusion lives and dies by the articles and the regularity of the votes that adopt and apply them. From abroad, organise this vote as a formal collective decision: convene by the contractual means with proof of receipt, attach the grievances and evidence, record attendance and proxies, let the targeted shareholder submit written observations even if relations are broken, have the minutes signed, and file the resulting share transfer through the Guichet unique (the single online business formalities portal run with the INPI, the French intellectual property and companies office) so the RCS (Registre du commerce et des sociétés, the trade register kept by the greffe) reflects the new shareholding and a fresh Kbis can be issued.
B. Who votes, what majority applies, and how is the forced buyout price fixed when you disagree?
Assume the clause exists. The next battle is the price. Co-founders who agree on nothing else never agree on value, and the excluded shareholder will argue that the price imposed from abroad confiscates his work. Article L227-18 of the Commercial Code gives the hierarchy. It provides that « Si les statuts ne précisent pas les modalités du prix de cession des actions lorsque la société met en oeuvre une clause introduite en application des articles L. 227-14 , L. 227-16 et L. 227-17 , ce prix est fixé par accord entre les parties ou, à défaut, déterminé dans les conditions prévues à l’article 1843-4 du code civil. » Agreement first, expert second. Where the articles already contain a complete valuation method, that method applies. Where they are silent or incomplete, and the parties cannot agree, an independent expert fixes the value. The same article adds a time discipline when the company itself buys back the shares: « Lorsque les actions sont rachetées par la société, celle-ci est tenue de les céder dans un délai de six mois ou de les annuler. » Six months to resell or cancel, stated in the same sentence as the rule, so diary that deadline from the buyback date and publish the resulting capital change. A company that holds its own shares beyond that period without cancelling or reselling them invites annulment actions and auditor qualifications, and a foreign president who ignored the mail will discover the problem at the worst moment, when the bank reviews the Kbis before releasing funds.
The expert mechanism of article 1843-4 of the Civil Code is powerful but often misunderstood, and misunderstanding it from abroad costs money. The article states that « Dans les cas où la loi renvoie au présent article pour fixer les conditions de prix d’une cession des droits sociaux d’un associé, ou le rachat de ceux-ci par la société, la valeur de ces droits est déterminée, en cas de contestation, par un expert désigné, soit par les parties, soit à défaut d’accord entre elles, par jugement du président du tribunal judiciaire ou du tribunal de commerce compétent, statuant selon la procédure accélérée au fond et sans recours possible. » The president of the competent judicial or commercial court appoints the expert by a fast-track decision that cannot be appealed, which means you obtain an expert quickly but you cannot challenge the appointment itself. The same article binds the expert to your contracts: « L’expert ainsi désigné est tenu d’appliquer, lorsqu’elles existent, les règles et modalités de détermination de la valeur prévues par les statuts de la société ou par toute convention liant les parties. » If your shareholders agreement sets a multiple of EBITDA, a discounted cash-flow method or a nominal-value rule for leavers, the expert must apply it. If no method exists, the expert values freely using standard business valuation approaches at the relevant date. The second paragraph covers cases where the articles provide for a transfer without any determinable value: there too, on dispute, an expert appointed the same way fixes the value, applying any agreed rules where they exist.
Two rulings of the Cour de cassation frame when that expert actually intervenes, and both matter before you file anything. In a ruling of 24 November 2009, appeal number 08-21.369, the court held that where the transfer price was determinable under pre-agreed calculation terms and the transfer had become complete when the purchase option was exercised, the court of appeal had correctly found that the price had not been disputed before the transfer was completed, and it therefore correctly rejected the late request for expert valuation. The court noted that « celui ci était déterminable et que la cession était devenue parfaite dès la levée de l’option ». The lesson is procedural: contest the price early, in writing, before the transfer completes, or the expert door may close. A ruling of 11 March 2014 on a shareholders agreement with a forced sale at nominal value after resignation shows the mirror risk: sign a leaver clause promising your shares at nominal value on departure, and the court will enforce the clause you signed, leaving only narrow routes to challenge an abusive dismissal behind the resignation. For a fuller analysis of how French courts treat forced sales of SAS shares, price setting and approval refusals, see the companion guide on selling SAS shares from abroad: price, approval and tax challenges, which follows this article and uses the same valuation rules.
From abroad, run exclusion as a documented file, not as an email exchange. Instruct a French lawyer to send the contractual formal notice, convene the collective decision with the contractual notice period, and arrange a videoconference vote with identity checks and a bailiff or lawyer as scrutineer where the articles allow remote participation. Keep every proof: articles in their current greffe version, shareholders agreement, cap table, bank statements showing blocked operations, copies of unanswered convocations, minutes of failed meetings, expert correspondence on price, and the transfer instruments. File the share transfer on the Guichet unique promptly, update the beneficial-owner register (the RBE, registre des bénéficiaires effectifs, which lists the natural persons ultimately controlling the company) where control changes, and order a fresh Kbis to confirm the RCS now shows the right shareholders. If the excluded co-founder sues for annulment, French courts will review the clause, the adoption majority, the defence rights and the price. A file that proves each step survives. A file built on oral grievances and retroactive paperwork does not. Where the family dimension overlaps with the business conflict, for example when a spouse claims rights over the shares during a divorce, coordinate both fronts using the method described in co-founder divorce and spouse claims over French company shares, because matrimonial rights and exclusion price interact directly.
II. How to end or save a deadlocked French company when exclusion is impossible
A. When will a French court dissolve your company for co-founder deadlock, and how do you file from abroad?
When the articles contain no exclusion clause, or when the required majority is unreachable because each co-founder holds half the votes, exclusion is legally unavailable and insisting on it wastes months. French law then offers the ultimate remedy: early dissolution ordered by a court for just grounds. Article 1844-7 of the Civil Code lists how companies end, and its fifth case provides that « La société prend fin : […] 5° Par la dissolution anticipée prononcée par le tribunal à la demande d’un associé pour justes motifs, notamment en cas d’inexécution de ses obligations par un associé, ou de mésentente entre associés paralysant le fonctionnement de la société ». Mésentente means lasting disagreement between shareholders, and paralysie means the company can no longer decide or act: no accounts approved, no president appointed or renewed, no strategic decision taken, bank mandates frozen, key contracts unsigned. Courts require both elements together, disagreement plus paralysis, not mere tension, not a single lost vote, not a difficult personality. A company that still approves its accounts, still pays its staff and suppliers, and still files at the greffe will not be dissolved because two shareholders dislike each other. A fifty-fifty SAS where every collective decision fails, where two rival presidents claim to represent the company before the bank, and where the URSSAF (the social-security collection agency) and the tax administration receive contradictory filings, meets the test.
The leading ruling foreign founders should understand is the Cour de cassation decision of 16 September 2014, appeal number 13-20.083. A minority structure holding half the capital of a property company asked for dissolution for paralysing disagreement, and the court of appeal had declared the claim inadmissible because the claimant’s own manager had caused the trouble by never convening meetings and by selling the company’s only building in disputed conditions. The Cour de cassation quashed that reasoning on receivability but restated the substantive filter. It held that « si la circonstance, à la supposer établie, que l’associé qui exerce l’action est à l’origine de la mésentente qu’il invoque est de nature à faire obstacle à ce que celle-ci soit regardée comme un juste motif de dissolution de la société, elle est sans incidence sur la recevabilité de sa demande ». In English: being yourself the author of the discord does not make your claim inadmissible, but it can prevent the discord from counting as a just ground for dissolution. Any shareholder may file, including from abroad through a lawyer, but a shareholder who manufactured the blockade to force a cheap buyout will lose on the merits. Courts examine who refused convocations, who withheld documents, who diverted opportunities, and who proposed reasonable exits. File only with clean hands and paper to prove it: propose mediation in writing, propose a buyout at a reasoned price, propose a reciprocal put and call, attend every meeting even when you expect failure, and keep the bailiff records of each refusal by the other side.
Dissolution is not the only judicial remedy, and judges prefer proportionate ones. Before dissolving, courts ask whether a less radical measure would restore functioning: appointment of a provisional administrator (administrateur provisoire) to run the company temporarily and organise a lawful exit, appointment of an expert to value shares for a court-supervised buyout, or forced transfer orders where the articles permit them. Recent first-instance practice confirms that courts dissolve only when paralysis is proven by documents, not by assertions. A Bastia commercial court ruling of 11 September 2026 dissolved a family company after finding, from meeting records, registered letters and a criminal complaint, that all shareholders acknowledged the loss of affectio societatis (the shared will to collaborate as shareholders) and that management was impossible. The decision is published at Tribunal de commerce de Bastia, 11 septembre 2026, n° 2024J00182. Your file should mirror that evidentiary standard: minutes showing failed votes, bank letters freezing operations for lack of joint signatures, auditor alerts where a commissaire aux comptes (the statutory auditor) exists, unanswered formal notices, and proof that tax and social filings continue despite the conflict, so the court sees a shareholder who protects the company even while asking for its end.
Filing from abroad follows a fixed path. Your French lawyer files an assignation (a writ of summons) before the competent court, usually the tribunal de commerce where the company has its registered office for a commercial SAS, or the tribunal judiciaire for civil companies, with a Paris-registered company going to the Paris commercial court. The writ sets out the just grounds, lists the evidence, and names all necessary parties, including the company itself. Service abroad uses EU or Hague channels where the defendant lives outside France, which adds weeks, so start early and keep a French address for service at your lawyer’s office. The court may first appoint a provisional administrator rather than dissolve immediately, especially where employees, creditors or ongoing contracts need protection. If dissolution is pronounced, a liquidator is appointed, the dissolution is filed on the Guichet unique, published with notice to creditors, and the RCS entry changes from active to dissolved-in-liquidation until closure, with publication in the BODACC. Each step generates a paper trail the bank, the tax office and the greffe will ask for. Budget for translation of foreign evidence, apostille where required, and travel only if the court orders your personal appearance, which remains rare when you are represented.
B. What should you file in Paris and Ile-de-France, what proof wins, and which alternatives avoid killing the company?
Paris and Ile-de-France concentrate the practical constraints foreign founders underestimate. Jurisdiction follows the registered office: an SAS seated in Paris litigates exclusion and dissolution disputes before the Paris courts, with the tribunal de commerce de Paris handling most SAS deadlock cases and the tribunal judiciaire de Paris hearing related civil issues such as shareholders-agreement enforcement or family overlap. Evidence must be French-court-ready. Minutes and convocations in English should be translated by a sworn translator where they are decisive, foreign email evidence should carry reliable timestamps, and bank correspondence showing the freeze should come as originals or certified copies rather than screenshots. Serve every decisive letter by lettre recommandée avec accusé de réception (registered letter with acknowledgement of receipt) or commissaire de justice (the reformed bailiff profession) even when you also email, because French judges weigh formal service far above informal messages. Keep a Paris address for service through your lawyer so court papers, greffe notices and URSSAF reminders do not expire unanswered while you are on another continent. The commercial court expects a complete Kbis less than three months old, current articles certified by the president, the cap table, the last three approved or draft balance sheets, the shareholders agreement, and the full correspondence file. Arrive without them and the first hearing is lost to a postponement you pay for.
Proof wins or loses these cases on four points. First, prove the clause or prove its absence: produce the greffe-stamped articles, not a working draft from a data room, and show the adoption majority for every later amendment, because the court will verify unanimity where article L227-19 requires it for approval and change-of-control clauses and the contractual majority for exclusion clauses. Second, prove respect for defence rights: convocation, statement of grievances, time to respond, access to documents, vote without fraud, signed minutes. Third, prove paralysis with documents external to yourself wherever possible: bank freeze letters, auditor warnings, unfiled accounts, expired mandates, lost contracts attributed in writing to the lack of signatures. Fourth, prove clean hands: your written settlement offers, your attendance at every meeting, your continued funding of tax and social charges through the conflict, your proposal of mediation or expert valuation. Courts distrust the shareholder who starves the company to prove it is dying. They listen to the shareholder who kept it alive while proving it cannot decide. Where the deadlock overlaps with a family break-up, align the two files early, because a spouse claiming shares changes majorities and prices, as explained in the divorce and shares guide linked above. Where the dispute follows a sale process, align with the price and approval analysis in the share-sale guide linked above, so valuation experts receive consistent instructions.
Before asking a judge to kill the company, price three alternatives that preserve value. The negotiated buyout remains the best outcome: one founder buys the other at an expert-assisted price, with payment terms, guarantees and non-compete clauses, then files the transfer and updates the RBE and the Kbis. The contractual shotgun family, including Russian roulette and Texas shoot-out clauses where each side names a price at which it will buy or sell, works only if the agreement already contains it and both sides can fund the outcome, so do not improvise it mid-conflict without advice. The provisional administrator buys time: the court appoints a neutral professional to keep the business running, pay staff, collect receivables and organise a lawful sale or buyout, which protects the company against wrongful-trading exposure while founders negotiate. Dissolution and liquidation come last because they destroy goodwill, force fire sales of assets, trigger employee dismissals with severance, and leave both founders paying a liquidator to wind down what they built. Judges know this and say so in their reasoning. A claimant who cannot show he offered a buyout, mediation or expert valuation before demanding dissolution looks like a founder seeking punishment rather than a solution, and that impression colours the ruling on costs even when dissolution is granted.
Run a ninety-day plan from abroad that a Paris judge will respect. In week one, secure the articles from the greffe, freeze the evidence, mandate a French lawyer, and open a formal correspondence channel that replaces messaging apps. In weeks two to four, send the contractual formal notice, convene the collective decision the articles require, propose mediation and expert valuation in writing, and keep operating the company normally for staff, customers, tax and URSSAF. In weeks five to eight, hold the vote or record its failure by bailiff report, file the transfer where exclusion succeeded or draft the dissolution writ where it failed, and prepare translations and service arrangements for parties abroad. Throughout, fund undisputed company obligations, avoid any personal use of company assets, and refuse any side deal with one creditor against the others. If exclusion succeeds, publish and register immediately so the RCS, the RBE and the Kbis tell the same story to banks and customers. If dissolution becomes unavoidable, file with a liquidator proposal, a staff-protection plan and a creditor-information plan. Distance does not excuse delay or informality in French company litigation. It rewards the founder whose file, opened in Paris, reads as complete, loyal and ready to decide.
Conclusion
A deadlocked French SAS owned from abroad leaves you two lawful exits and no shortcut. Where the articles organise exclusion, enforce the clause exactly as written, protect defence rights, secure the contractual majority, and fix the price by agreement or, on dispute, through the expert of article 1843-4, with the company reselling or cancelling repurchased shares within the statutory period. Where no clause or majority allows exclusion, ask the court for early dissolution only on proven paralysing disagreement within article 1844-7, with clean hands, external proof and a record of settlement offers, knowing the judge may prefer a provisional administrator or a supervised buyout. Paris procedure rewards formal service, translated evidence, current Kbis and articles, and continuous funding of tax and social duties while the dispute runs. Propose a buyout before demanding an ending, and file from abroad through a lawyer with bailiff-grade proof. Managed that way, even a broken partnership ends as a legal transfer or a supervised closure rather than as an uncontrolled collapse.