Reda Kohen, a company law lawyer in Paris, advises directors, shareholders, founders and investors on all the operations that shape the life of a company: choice of legal form, drafting of the articles of association and the shareholders' agreement, transfers of shares, management of disputes between shareholders, mergers, transfers of ownership, dissolutions and commercial litigation.
For a sale of a business or of a holding company, the firm acts from the due diligence on the shares and contracts, then on structuring the transaction, negotiating the price, the warranty and indemnity agreement (garantie d’actif et de passif) and the completion formalities. The support covers sales of control, intragroup transfers and the reorganisations that precede a transaction.
The firm's approach combines responsiveness, a single point of follow-up and rigour in drafting. The firm is based in the 17th arrondissement of Paris and acts in French and in English, in France and in the Paris region (Île-de-France). The first direct contact is by telephone or through a confidential form.
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Legal analysis
Company law: what the Court of Cassation rules
Analysis updated on 25 October 2026. Each decision cited links to its official text on courdecassation.fr, and each article to its current version on legifrance.gouv.fr.
Between 2023 and 2025, the Commercial Chamber of the Court of Cassation handed down several decisions that change the practice of disputes between shareholders. Three judgments published in the Bulletin, delivered on 7 May, 18 June and 9 July 2025, concern the derivative action brought ut singuli and the admissibility of an action for nullity on grounds of abuse of majority. They do not create a new right to challenge every corporate decision. Rather, they prevent procedure from neutralising a shareholder's rights where the company, its officers or its majority obstruct the debate.
Company law comes into play at incorporation, during the life of the company, on a transfer of shares, in the event of a dispute between shareholders, when a director's liability is sought or when insolvency proceedings expose directors to penalties. The five areas below set out the state of the case law and the levers that follow from it, before any action.
I. Disputes between shareholders: abuse of majority, abuse of minority, ut singuli derivative action
A. Abuse of majority: admissibility of the action must not become an artificial obstacle
A dispute between shareholders is rarely born of a single vote. It often results from a succession of decisions that alter the initial balance: systematic retention of profits, dilutive capital increases, a contested remuneration of the director, transfers of assets, or a shareholder being kept out of the company's information.
The courts check two conditions, which the Paris Court of Appeal restates as follows:
“an abuse of majority is characterised by two elements: an objective element, namely that the decision in question must have been taken contrary to the general interest of the company, mere uncertainty being insufficient, and a subjective element, namely that the decision must have been taken with the sole aim of favouring the members of the majority to the detriment of the minority, that is, an intentional fault characterised by the wish to break the equality between shareholders” (our translation)
CA Paris, pôle 5, ch. 9, 26 November 2020, No. 19/10363
In that case, the court found an abuse for the financial years in which the remuneration of the majority manager had increased out of proportion to the trend in turnover and profits, while the minority shareholder no longer received any dividend.
The decision of 9 July 2025 concerns litigation technique. Citing (Code civil) and (Code de procédure civile), the Court of Cassation holds:
“It follows from the combination of those provisions that the admissibility of an action for nullity of a corporate resolution on grounds of abuse of majority is not, in the absence of a claim for damages against the majority shareholders, subject to those shareholders being joined to the proceedings.” (our translation)
Cass. com., 9 July 2025, No. 23-23.484, published in the Bulletin
A shareholder who seeks only the annulment of a resolution therefore does not have to summon the majority shareholders: the challenged resolution is an act of the company. If a claim for damages is directed personally at the majority shareholders, joining them to the proceedings becomes necessary again. Article 32 of the Code of Civil Procedure declares inadmissible “any claim made by or against a person without the right to act” (our translation). Article 1844-10 of the Civil Code, which governs nullities in company law, was rewritten with effect from 1 October 2025; the judgment was delivered under its earlier wording.
A limit had been set earlier:
“A decision taken unanimously by the shareholders cannot constitute an abuse of majority.” (our translation)
Cass. com., 8 November 2023, No. 22-13.851, published in the Bulletin
Abuse of majority presupposes an opposition between majority and minority shareholders. Unanimity rules it out, without however curing every other irregularity in the decision.
B. Abuse of minority: a refusal to vote can also upset the balance within the company
Abuse of minority is less visible. It does not consist in imposing a decision but in preventing its adoption. It arises where the minority holds a blocking minority and refuses a change that is essential to the company. In a judgment delivered in a section formation, the Court of Cassation held that “The refusal of a minority shareholder to amend the corporate purpose may be contrary to the general interest of the company.” (our translation) It restated the two conditions:
“The existence of an abuse of minority presupposes proof, on the one hand, that the minority shareholder's attitude is contrary to the general interest of the company in that it prevents an operation that is essential to it and, on the other hand, that it stems from the sole aim of favouring that shareholder's own interests to the detriment of the other shareholders.” (our translation)
Cass. com., 13 March 2024, No. 22-13.764, published in the Bulletin
The review remains demanding. In that case, the managers had terminated the company's franchise and supply contracts, which made it necessary to amend its corporate purpose. The court of appeal had seen in the minority shareholder's refusal only the defence of that shareholder's own interests. The Court quashed the judgment in so far as it instructed an ad hoc agent to vote the amendment of the corporate purpose on behalf of that minority shareholder: the termination of the contracts, because it made that amendment necessary, fell outside the managers' authority, and the court of appeal had not drawn the consequences. The quashing is partial and limited to that point, together with costs.
Voting rights remain the shareholder's own right: under , “Every shareholder has the right to take part in collective decisions” (our translation). That right yields only if the blockage prevents an essential operation and stems from the sole aim of favouring the minority shareholder's interests. Where the firm assists the minority shareholder, it documents the reasons for the vote. Where it assists the majority or the director, it establishes the essential nature of the refused operation and the exclusively personal aim of the refusal. The case is decided on the minutes, management reports, prior exchanges and financial documents.
C. The ut singuli derivative action: a strengthened tool for shareholders
The ut singuli derivative action allows a shareholder to sue the directors for compensation of the harm suffered by the company. It is distinct from the personal action, which compensates the shareholder's own harm. In a limited liability company (SARL), (Code de commerce) provides that claimants “are entitled to seek compensation for the entire harm suffered by the company, to which, where applicable, the damages are awarded” (our translation).
On 7 May 2025, citing and Article L. 223-22, paragraph 3, of the Commercial Code, the Court of Cassation held:
“It follows that shareholders hold their own right to bring an action for compensation of the harm suffered by the company, which is not affected by the company's concurrent exercise of its own action.” (our translation)
Cass. com., 7 May 2025, No. 23-15.931, published in the Bulletin
The court of appeal had declared the shareholders' action inadmissible because the company was acting at the same time for the same harm. That circumstance is not enough to deprive a shareholder of the action.
On 18 June 2025, citing Article 31 and and , it added:
“It follows from the combination of those provisions that the status of shareholder required to bring the ut singuli action is assessed at the time of the originating application, so that the later loss of that status has no effect on the continuation of the action by the person who brought it.” (our translation)
Cass. com., 18 June 2025, No. 22-16.781, published in the Bulletin
In that case, the shareholder had lost that status during the proceedings, the shares having been bought back and then cancelled. Article L. 225-252 governs the corporate action of shareholders of a public limited company (SA). In a simplified joint-stock company (SAS), makes applicable to the chairman and the officers “The rules setting the liability of the members of the board of directors and the management board of public limited companies” (our translation).
These decisions call for early action. Shareholder status is assessed on the day of the originating application: the action must be brought before any transfer, exclusion or restructuring capable of causing that status to be lost. The firm handles these disputes between shareholders, for claimants and defendants alike.
II. Director's liability: separable fault and shortfall in assets
A. Fault separable from the duties, towards third parties
Articles L. 223-22 (SARL) and (public limited company) of the Commercial Code make directors liable, to the company or to third parties, for infringements of legislative or regulatory provisions, breaches of the articles of association and faults committed in their management. Towards third parties, the case law requires a fault separable from the duties. Citing Article L. 223-22, paragraph 1, the Commercial Chamber restated this on 26 November 2025:
“It follows from that provision that the personal liability of a de jure director towards third parties can be engaged only if the director has committed a fault separable from the director's duties. This is so where the director intentionally commits a fault of particular gravity, incompatible with the normal exercise of corporate duties.” (our translation)
Cass. com., 26 November 2025, No. 24-21.022
The judgment quashes a court of appeal that had held the manager of an SARL liable to the company's landlord, notably for failure to file the accounts with the court registry. Those grounds were “unsuitable to characterise an intentional fault of particular gravity, incompatible with the normal exercise of a manager's duties” (our translation). A contractual non-performance by the company or a management error is therefore not enough: the third party must establish intentional conduct of particular gravity. See also our page on the civil liability of company directors.
B. Shortfall in assets: mere negligence remains excluded
In judicial liquidation, allows the court to place all or part of the shortfall in assets on the de jure or de facto directors whose management fault contributed to it. The provision adds: “However, in the case of mere negligence by the de jure or de facto director in the management of the legal entity, the director's liability for the shortfall in assets cannot be engaged.” (our translation) Citing that provision, the Court of Cassation holds:
“It follows from that provision that, in the case of mere negligence in the management of the company, the director's liability for the shortfall in assets is excluded.” (our translation)
Cass. com., 13 April 2022, No. 20-20.137, published in the Bulletin
The director had committed the company to an activity relying on a single client, which had abruptly broken off the commercial relationship. The court of appeal criticised a lack of vigilance. The Court found those grounds “unsuitable to establish that the director had committed a management fault that could not be analysed as mere negligence” (our translation). An unfortunate commercial risk is not the same as a management fault.
C. Established management fault: an example of assessment by the trial courts
The trial courts examine the management facts one by one, for example the continuation of a loss-making activity or the late declaration of cessation of payments (cessation des paiements). Proceedings must be applied for no later than forty-five days after cessation of payments, unless conciliation is requested within that period ( and of the Commercial Code).
In a case decided by the Paris Court of Appeal, the date of cessation of payments had been set at 15 February 2018 and the director declared it only on 8 April 2019, even though social security contributions were no longer paid when due and the 2018 VAT and a significant share of the suppliers remained unpaid. The court held that:
“the failure to declare the state of cessation of payments was not a matter of mere negligence. It follows that this omission constitutes a management fault, which is all the more serious as it contributed significantly to the shortfall in assets” (our translation)
CA Paris, pôle 5, ch. 9, 11 May 2023, No. 22/08274
The role of the director's lawyer is first evidentiary: reconstructing the management chronology, identifying the decisions taken with the information available at the time, and distinguishing a management error from the fault legally found. A director is not a guarantor against every economic risk. A director must, however, account for the decisions that increased the liabilities or reduced the chances of recovery.
III. Share transfers: warranty and indemnity and securing the transaction
A. Warranty and indemnity agreement: mechanism and limits
A transfer of shares concentrates several risks. The buyer acquires shares whose value depends on the assets, the contracts, the tax and employment-related liabilities and the disputes of the target company. The warranty and indemnity agreement provides for the seller to bear certain reductions in assets or increases in liabilities whose cause predates the transfer.
The warranty is not a general insurance of profitability. It is interpreted according to its terms: definitions, thresholds, deductibles, caps, notification periods and cooperation obligations. It must be reread with the same attention as the price and the conditions precedent.
Joint and several liability between sellers must be checked deed by deed. Citing Article 1202 of the Civil Code, in its wording prior to the Ordinance of 10 February 2016, the Court of Cassation quashed a judgment that had ordered four sellers jointly and severally liable towards two buyers “taken together”, on account of the commercial nature of the transaction:
“In so ruling, when Mr [C] acquired shares in the company LNX only from Mr [R] [V], so that the joint and several liability enjoyed by the company Sati against all the [V] family members cannot take effect as regards him, the court of appeal infringed the aforementioned provision.” (our translation)
Cass. com., 24 January 2024, No. 20-13.755, published in the Bulletin
Joint and several liability is not extended for convenience. Where several transfer deeds coexist, each link between seller and buyer must be examined: a poorly drafted joint and several liability clause can fail at the very moment the buyer seeks to rely on the warranty.
B. When the guaranteed debt falls due, and proof of it
The beneficiary of the warranty must prove the debt it invokes. In an unpublished judgment of 12 March 2025, the Court of Cassation approved a court of appeal that had dismissed a claim based on a warranty and indemnity agreement:
“Having noted that Mr [R] disputed owing any sum under the liability warranty and held that Ms [M] did not show the outcome of the proceedings in which unpaid rent and service charges were claimed from the company by the owner of the premises, the court of appeal, finding that proof that this debt was due had not been provided, dismissed Ms [M]'s claim on that point without altering the subject matter of the dispute.” (our translation)
Cass. com., 12 March 2025, No. 23-12.169
The beneficiary must therefore establish the existence of the liability, its link to the guaranteed period, its amount and its falling due within the meaning of the agreement. An accounting provision, a third-party claim or an identified risk is not always enough: the clause may require a certain debt, a notification or a decision that has become final. Before any writ of summons, the file must bring together the transfer deed, the warranty and its annexes, the notification sent to the guarantor, the accounting documents, third-party claims and the elements that date the cause of the liability. Disputes are lost more often on a late notification, a wrongly characterised debt or incomplete proof than on the principle of the warranty.
C. Due diligence and drafting of the transfer deed
Securing a transfer begins before signing. Legal due diligence checks the articles of association, the registers, the collective decisions, the major contracts, the leases, the disputes, the shareholders' current accounts, the security interests and the off-balance-sheet commitments. Where the business relies on commercial premises, analysis of the lease is decisive; the firm also acts in matters of commercial leases.
Drafting then turns the identified risks into enforceable clauses: definition of the guaranteed liability, the seller's representations, timetable, conditions for enforcement, the guarantor's role in defending disputes, cap, deductible, security and the consequences of incomplete information. Company law here meets contract law and business law. A good transfer deed anticipates foreseeable disputes, allocates the burden of proof and prevents the negotiated price from being called into question by a liability revealed a few months after the takeover.
IV. Articles of association and shareholders' agreements: exclusion clauses and nullities
A. Exclusion clause in an SAS and the voting right of the shareholder concerned
The SAS rests on wide freedom in drafting the articles of association, which must be reconciled with each shareholder's right to take part in collective decisions. allows the articles to provide that a shareholder “may be required to transfer their shares” (our translation). It remains to determine how far the articles can organise the exclusion decision. Citing Articles 1844 and 1844-10 of the Civil Code and L. 227-16 of the Commercial Code, the Court of Cassation held:
“It follows from the combination of those provisions that, while the articles of association of a simplified joint-stock company may provide for the exclusion of a shareholder by a collective decision of the shareholders, any provision of the exclusion clause whose purpose or effect is to deprive the shareholder whose exclusion is proposed of the right to vote on that proposal is deemed unwritten.” (our translation)
Cass. com., 29 May 2024, No. 22-13.158, published in the Bulletin
The shareholder concerned therefore keeps the right to vote where the decision is collective. The sanction does not destroy the whole exclusion clause; it neutralises the provision that deprives the shareholder of the vote. The judgment was delivered under the former wording of Article 1844-10; the wording in force since 1 October 2025 maintains that “Any clause of the articles contrary to a mandatory provision of company law, the breach of which is not sanctioned by nullity of the company, is deemed unwritten” (our translation). For existing SAS, an audit of the articles is advisable: older exclusion clauses sometimes contain deprivations of the vote or majorities calculated without the person concerned, which an amendment of the articles of association can correct.
B. Article L. 227-15 of the Commercial Code: nullity limited to freely agreed transfers
Under , “Any transfer made in breach of the clauses of the articles is null” (our translation). The wording has prompted attempts to extend it to shareholder exclusions and forced transfers. The Court of Cassation has set a limit:
“As this provision does not govern the exclusion of a shareholder and the forced transfer of shares that results from it, the nullity it provides for is intended solely to sanction breach of any clause of the articles whose object is the freely agreed transfer of shares by their holder” (our translation)
Cass. com., 21 June 2023, No. 21-25.952, published in the Bulletin
It thus quashed the judgment that had annulled a clause of a pact providing a unilateral promise to sell shares subject to a condition precedent, on the ground that it contravened the exclusion clause in the articles. A freely agreed transfer clause, an approval clause and an exclusion clause do not have the same object, and their sanctions do not overlap mechanically.
C. Shareholders' agreement: scope, enforceability and interplay with the articles
The shareholders' agreement organises what the articles should not always disclose publicly: enhanced information rights, contractual governance, non-competition clauses, promises to sell, exit mechanisms or deadlock resolution procedures. It binds its signatories on a contractual footing, whereas the articles bind the company and the shareholders within the corporate order. Breach of it may justify specific performance, damages or application of a penalty clause, but does not always give rise to corporate nullity.
defines a company as the contract by which shareholders put property or skills into a common enterprise “with a view to sharing the profit or benefiting from the economy that may result” (our translation); it may also, in the cases provided for by law, be formed by a single person, and the shareholders undertake to contribute to the losses. requires a lawful object and a company “formed in the common interest of the shareholders”, managed “in its corporate interest, taking into consideration the social and environmental issues of its activity” (our translation). These provisions give the framework; the articles and the pact build the balance between control, liquidity and stability. The pact must provide an exit method before disagreement paralyses the company: otherwise a shareholder may be left with a theoretical right, with no buyer, no shared valuation and no timetable.
V. Companies in difficulty: safeguard, reorganisation, liquidation
A. How insolvency proceedings fit together
Safeguard proceedings are open to a debtor who, “without being in cessation of payments, shows difficulties that it is unable to overcome” (our translation) (). Judicial reorganisation presupposes cessation of payments (). Judicial liquidation concerns a debtor in cessation of payments “whose recovery is manifestly impossible” (our translation) ().
The procedure changes powers, priorities and the timetable, and it affects relations between shareholders. Where the draft plan provides for a change in the share capital or the articles of association, governs the convening of the competent meetings. The court may decide that the meeting will rule, on first call, “by the majority of the votes held by the shareholders present or represented provided that they hold at least half of the shares carrying voting rights” (our translation); on second call, the ordinary rules on quorum and majority apply. Company law is then recomposed around the court and the bodies of the proceedings. The firm assists directors and shareholders in these insolvency proceedings.
B. Action for liability for shortfall in assets
An action based on Article L. 651-2 presupposes a judicial liquidation revealing a shortfall in assets, a management fault other than mere negligence, and the contribution of that fault to the shortfall. The director's defence rarely consists in denying all difficulty. It separates what stems from the market, the economic climate, a significant unpaid debt or a termination of commercial relations from what stems from a management fault that is legally attributable. The distinction set out in the judgment of 13 April 2022 retains its full relevance here.
C. Personal bankruptcy, management bans and dissolution for shareholder deadlock
Judicial reorganisation or liquidation may also expose a de jure or de facto director who is a natural person to personal sanctions (), subject to the exclusion that provision makes for independent professionals subject to disciplinary rules. A ban on directing, managing, administering or controlling a business or a legal entity may be imposed in place of personal bankruptcy, but also on its own, notably against a person who “knowingly failed to apply for the opening of judicial reorganisation or liquidation proceedings within forty-five days of the cessation of payments, without having applied for conciliation proceedings” (our translation) (). These sanctions do not pursue a compensatory purpose: they target the director's conduct and capacity to hold new office. Bookkeeping, declaring cessation of payments within the statutory period, cooperation with the bodies of the proceedings, preservation of company records and transparency about assets are then central elements.
Where disagreement between shareholders paralyses the company, allows the court to order early dissolution “at the request of a shareholder for just cause, in particular where a shareholder fails to perform its obligations, or where disagreement between shareholders paralyses the functioning of the company” (our translation). This route is not an ordinary pressure tool: it presupposes an established paralysis and a precise assessment of the corporate interest. See our page on the dissolution and liquidation of companies.
Official sources
- Cass. com., 9 July 2025, No. 23-23.484, published in the Bulletin.
- Cass. com., 8 November 2023, No. 22-13.851, published in the Bulletin.
- Cass. com., 13 March 2024, No. 22-13.764, published in the Bulletin, section formation.
- Cass. com., 7 May 2025, No. 23-15.931, published in the Bulletin.
- Cass. com., 18 June 2025, No. 22-16.781, published in the Bulletin.
- Cass. com., 26 November 2025, No. 24-21.022.
- Cass. com., 13 April 2022, No. 20-20.137, published in the Bulletin.
- Cass. com., 24 January 2024, No. 20-13.755, published in the Bulletin.
- Cass. com., 12 March 2025, No. 23-12.169, not published in the Bulletin.
- Cass. com., 29 May 2024, No. 22-13.158, published in the Bulletin.
- Cass. com., 21 June 2023, No. 21-25.952, published in the Bulletin.
- CA Paris, pôle 5, ch. 9, 26 November 2020, No. 19/10363.
- CA Paris, pôle 5, ch. 9, 11 May 2023, No. 22/08274.
- Civil Code: Articles , , , , .
- Commercial Code: Articles , , , , , , , , , , , , , , .
- Code of Civil Procedure: Articles , , .
