Articles of association lawyer in Paris: protecting governance before the first dispute.

It is legally possible but risky. Online templates cover the mandatory particulars of Article L. 210-2 of the French Commercial Code (Code de commerce) but ignore the sensitive clauses: approval of transfers, exclusion, pre-emption, limits on the manager's authority to commit the company. Standard drafting leaves you exposed at the first dispute. Amending the articles later to correct a missing clause costs several thousand euros and often requires unanimity, which can no longer be obtained once relations have soured.

Article L. 210-2 of the Commercial Code requires six particulars: the form, the term (ninety-nine years at most), the company name, the registered office, the corporate purpose and the amount of share capital. For the SARL, the rules on transfers and approval are added (Article L. 223-14). For the SAS there is greater freedom, but the articles must at a minimum designate the chairman and set the rules for collective decision-making.

The articles are public, enforceable against third parties and filed with the Trade and Companies Register. A shareholders' agreement is a private contract, signed between all or some of the shareholders, more flexible and confidential. The agreement deals with what the articles cannot say with the same precision: priced exits, valuation, detailed governance, drag-along, tag-along and enhanced information rights.

Yes, by a collective decision of the shareholders under the majority rules set by the articles. Any amendment must be filed with the Trade and Companies Register and published in a legal notices newspaper. Cost and timing increase with complexity: change of purpose, transfer of the registered office to another département, conversion into another form. Certain clauses can be amended only by unanimity (inalienability in a SAS under Article L. 227-19 of the Commercial Code).

Yes. Article L. 227-16 of the Commercial Code allows the articles of a SAS to provide that a shareholder may be required to transfer their shares, and to suspend their non-pecuniary rights until they have made that transfer. The clause must, however, be adopted by a collective decision of the shareholders under the conditions set by the articles (Article L. 227-19) and specify the grounds for exclusion, the procedure (often adversarial) and the terms of the buy-back of the securities.

Article 1844-1 of the French Civil Code (Code civil) deems unwritten any clause that wholly excludes a shareholder from profit, allocates all of the profit to them or places all of the losses on them. The leonine clause is neutralised and the rest of the articles remain in force. The risk is to believe you have secured a guaranteed return or protection against losses, and to discover before the judge that the clause cannot be relied upon.

Article L. 223-14 of the Commercial Code requires the approval of a majority of the shareholders representing at least half of the shares for any transfer to a third party. The proposed transfer is notified to the company and to the other shareholders. The company has three months to refuse. In case of refusal, the shareholders must buy the shares, or have them bought, within the following three months, at a price set by the expert under Article 1843-4 of the Civil Code. If no buy-out takes place within that period, the original transfer is deemed to have been agreed.

It is not mandatory but strongly advisable to preserve the balance of the cap table. Since the SAS leaves broad scope for drafting, the articles can provide for approval by simple majority, qualified majority or unanimity, depending on the level of protection wanted. The clause sets out the procedure, the response time and the fate of the shares in case of refusal (buy-back by the company or by the other shareholders).

Towards third parties, the manager binds the company by any act within the corporate purpose, even without authorisation. This rule is mandatory. However, the articles can limit the manager's powers as between shareholders, through prior authorisations with set thresholds (borrowing above a threshold, long leases, security interests over assets, senior hires). A precise list avoids abuses and clarifies the manager's liability if the limits are exceeded.

For the SARL, amendments to the articles by default require two thirds of the shares held by the shareholders present or represented (Article L. 223-30 of the Commercial Code). For the SAS, the articles freely set the majority, except where the law requires unanimity (inalienability clause, exclusion following a change of control of a corporate shareholder: Articles L. 227-13, L. 227-17 and L. 227-19). Vague drafting on majorities creates a dispute at every amending meeting.

The agreement deals with what must remain confidential or cannot appear in the articles: priced valuation, exit timetable, drag-along, tag-along, enhanced information rights for the minority shareholder, non-compete undertakings, arbitration. The agreement is drafted in parallel with the articles and signed the same day. Its consistency with the articles is checked article by article.

Yes for companies with a high risk of deadlock (50/50 ownership, founders and investors with diverging interests). The arbitration clause refers disputes to an arbitrator rather than to the commercial court. The Commercial Chamber has held that the public-policy nature of Article 1843-4 of the Civil Code does not rule out arbitrability (Cass. com. 10 October 2018 No. 16-22.215). Arbitration is faster and confidential but costs more.

Standard drafting for a SAS or SARL with one or two shareholders starts at around €2,500 incl. VAT. Complex drafting (multiple shareholders, anticipated fundraising, preference shares, BSPCE, sophisticated shareholders' agreement) falls between €4,500 and €8,000 incl. VAT. The quote is a fixed fee and is given in writing before work begins, with the scope specified.

Allow two to three weeks between the first appointment and signing, with about ten days devoted to drafting and then to back-and-forth on the sensitive clauses. Urgent matters can be completed in one week if all decisions are ready. A matter involving an investor takes four to six weeks, the time needed to align the articles, the agreement and the term sheet.

Disputes between shareholders and those relating to the running of the company fall within the jurisdiction of the commercial court of the registered office, that is, the Paris commercial court for a company registered in the capital. The articles can include an arbitration clause that derogates from this jurisdiction. The firm regularly pleads before this court.