Director removal lawyer in Paris: securing control and the exit.

Ad nutum removal (chairman of an SA, certain configurations in an SAS) means that the director can be dismissed at any time, without notice, without reason and without compensation, by simple decision of the competent body. Any contrary clause is deemed unwritten. Removal for cause (manager of an SARL, chief executive officer of an SA) does not prevent the decision but gives rise to a right to damages if no serious reason is shown. In both cases, the removal may be abusive if it is decided abruptly, without an adversarial process, or in vexatious circumstances.

Three distinct cases. First, removal without cause of a director who has that protection (manager of an SARL, Article L. 223-25; chief executive officer of an SA, Article L. 225-55) gives a right to compensation for the loss suffered. Second, removal in abrupt or vexatious circumstances gives rise to separate compensation, independent of cause (Cass. com., 26 November 1996, No. 94-15.661). Third, a contractual indemnity provided for in the engagement letter may apply, provided it is not dissuasive: the case law penalises with nullity any clause that undermines the power to remove at will (Cass. com., 6 November 2012).

Yes, under strict conditions. Combining the two requires technical functions distinct from the corporate mandate, separate remuneration and a genuine relationship of subordination to the company. The majority manager of an SARL, who takes the decisions, can almost never combine them. The chairman of an SAS or SA may combine them if the technical functions are autonomous. Otherwise the employment contract is held to be fictitious and gives no rights on removal. The burden of proof rests on the director who relies on it, except where there is an apparent earlier contract, in which case the burden is reversed.

Three steps: decision of the competent body (detailed minutes), publication in the legal notices journal of the département where the registered office is located, and filing with the INPI one-stop shop for the amending entry in the Trade and Companies Register (RCS). Until these formalities are completed, the company cannot rely on the end of the director's functions against third parties (Article L. 210-9 of the French Commercial Code, the Code de commerce). In practice the period is fifteen to thirty business days.

From the proper publication in the Trade and Companies Register. Before that publication, the company remains bound by the acts of the departing director towards third parties acting in good faith (Article L. 210-9). In practice, banks, business partners and administrations require an up-to-date Kbis extract before they will recognise the successor. The firm recommends withholding signature of any act binding the company until the amending entry is effective.

Yes, but with an essential limit. The case law penalises with nullity any stipulation granting the manager of an SARL, on removal, an indemnity whose amount is such as to dissuade the members from ordering it (Cass. com., 6 November 2012, No. 11-20.582, Eolec case, published in the Bulletin). The same logic applies beyond the SARL. In practice, a contractual indemnity is accepted if it remains proportionate to annual remuneration (generally six to twelve months) and does not have the effect of paralysing the company's decision.

Yes, on four cumulative conditions: limited in time (generally twelve to twenty-four months), limited in space (a precise geographical area), limited in activity (the sector or clientele targeted) and proportionate financial consideration. Failing that, the clause is null and produces no effect. The consideration is generally between 30 and 60% of the last monthly remuneration, but the range varies with the sector, the level of responsibility and the duration. The firm systematically checks these conditions before an end-of-mandate agreement is signed.

The removed director has a period within which to apply to the commercial court (tribunal de commerce) for compensation for the loss suffered. The case law recognises two alternative grounds: a removal decided abruptly without respect for the adversarial principle, and a removal accompanied by vexatious circumstances that damage the director's honour or reputation. Compensation covers moral and professional loss, distinct from any indemnity owed for the absence of cause. The ranges observed run from €20,000 to more than €200,000 depending on the circumstances and the remuneration.

Yes for the SARL: the manager can be removed by the courts for legitimate cause, at the request of any member (Article L. 223-25, paragraph 3, of the Commercial Code). This route is used when the majority of the members do not wish to remove the manager but a minority member considers that keeping the manager in office endangers the corporate interest (serious deadlock, established fault, jeopardy). The court has sole discretion to assess legitimate cause. The procedure is less frequent in an SA and SAS, where the composition of the bodies generally allows the situation to be unblocked in another way.

The settlement agreement anticipates and neutralises disputes. It sets the indemnity, the terms of communication, the timetable for the handover, any non-competition, the fate of stock options or preference shares, and the return of property and access. Signed under Article 2044 of the French Civil Code (Code civil), it has the authority of a final judgment between the parties and bars any later action on the matters it covers. It is the reference tool as soon as a case goes beyond a simple removal.

Five concrete actions: return of telephones, computers and documents; closing of IT and banking access; written transfer of ongoing files; designation of the successor contacts with key partners; coordinated internal and external communication. The handover period generally lasts two to four weeks. Poor management exposes the company to unforeseen commitments and to the criticism of having left the departing director with an appearance of authority.

For an action for compensation for abusive removal, the limitation period is five years from the day on which the holder of the right knew or ought to have known the facts enabling it to be exercised (Article 2224 of the Civil Code). For an action for nullity of a corporate decision (removal taken by an incompetent body or in breach of the articles of association), the limitation period is two years from the day on which the nullity is incurred (Article 1844-14 of the Civil Code). In practice, it is necessary to act quickly: evidence is lost and the successor's position strengthens over time.

The commercial court of the registered office, that is, the Paris commercial court for a company registered in the capital. Disputes relating to the corporate mandate and the running of the company fall within that court's jurisdiction. The articles of association may provide for an arbitration clause, which will displace that jurisdiction. If the director also relies on an employment contract (combination of the two), the employment tribunal (conseil de prud'hommes) has jurisdiction over the employment contract alone. The firm regularly pleads before the Paris commercial court.

For an express audit with a strategy note, fixed fees start from €1,800 excl. VAT. For full assistance (audit, drafting of documents, negotiation, follow-up of formalities), the range is generally between €4,500 and €12,000 excl. VAT depending on complexity and what is at stake. For a negotiated settlement agreement, fees are often set as a fixed fee with a variable part indexed to the final indemnity obtained. The quote is prepared in writing after the first discussion.

For both, but never at the same time in the same case (conflict of interest). Depending on the nature of the request, the firm defends either the company that wishes to remove a director (procedural security, management of the adversarial process, communication, defence if the removal is challenged) or the director negotiating an exit (audit of the file, negotiation of the indemnity and of the non-competition, action for compensation if the removal was abusive). The position is settled at the first discussion and appears in the engagement letter.