Shareholders agreement lawyer Paris: organising decision-making, exit and valuation.

The articles of association are public, enforceable against third parties and establish the company's existence. A shareholders' agreement is a private contract between its signatories: more flexible and confidential, it regulates what the articles cannot say with as much precision: priced exit, valuation, enhanced governance, anti-dilution, founder vesting. The articles bind everyone; the agreement binds only its signatories. In practice, the two documents are drafted together and signed on the same day.

Most often ten years, with tacit renewal. Beyond that, certain commitments, notably inalienability in an SAS under Article L. 227-13 of the French Commercial Code (Code de commerce), are capped at ten years. The agreement may provide for a term aligned with the intended exit (stock market listing, industrial sale) or with the duration of a structuring loan. An annual review is recommended.

Yes, where the clause amounts to a unilateral promise to sell or buy that is sufficiently precise as to its subject matter and price. The Court of Cassation has confirmed that Article 1124 of the French Civil Code allows the beneficiary to obtain the promised contract despite the promisor's withdrawal (Cass. com., 15 March 2023, No. 21-20.399, under the law prior to the 2016 reform). For shares of an SAS, the Court held in 2023 that the nullity provided for by Article L. 227-15 of the Commercial Code sanctions only breach of a clause in the articles of association concerning a freely agreed transfer of shares, and not the forced transfer that follows the exclusion of a shareholder (Cass. com., 21 June 2023, No. 21-25.952).

Three families: drag along (forced exit imposed by the majority shareholder), tag along (joint exit for the benefit of the minority shareholder), leaver (the fate of the shares of a founder or manager who leaves). These are often supplemented by a right of first refusal, a right of pre-emption for the other shareholders, and a buy or sell (shotgun) clause in the event of a 50/50 deadlock.

Three options: a fixed value annexed and revised annually, a formula with figures (EBITDA multiple, net asset value), or recourse to an expert appointed under Article 1843-4 of the French Civil Code in the event of disagreement. Best practice combines a readable formula with recourse to an expert in the event of a dispute. The expert assessment binds the parties within the limits of the procedures laid down in the agreement.

For the drag: the trigger threshold (often 50% or 66% of the share capital), the scope (all shares or only certain categories), the information timetable, enforceability against new entrants. For the tag: the eligible share (proportional or full), the response period, the price formula applied. Vague drafting makes the clause inoperative at closing.

The good leaver (departure through retirement, disability, dismissal without serious cause) allows the shares to be bought back at full expert-assessed value. The bad leaver (resignation before maturity, gross misconduct, unfair competition) triggers a buy-back at a heavily discounted value (often 30 to 70% lower) or at nominal value. The grounds must be listed precisely, and the assessment must be objective.

A clause under which an investor receives new shares at no cost if a later capital increase is made at a lower valuation than at its entry (down round). It protects the economic value of the previous round. Several formulas exist (full ratchet, broad-based weighted average, narrow-based weighted average) with very different dilutive effects for founders.

Preference shares (preferred stock) confer enhanced voting or financial rights: priority dividend, liquidation preference, veto rights, automatic conversion. They are authorised by Articles L. 228-11 et seq. of the Commercial Code and are mainly used in an SAS for fundraising. The agreement specifies the attached rights and the conditions of conversion into ordinary shares.

Three remedies are available: specific performance of the commitment (transfer or buy-back), damages (the penalty clause provided in the agreement or full compensation), and unilateral termination by notification under the conditions of Article 1226 of the French Civil Code. The choice depends on the nature of the commitment and the creditor's commercial interest. A prior formal notice is recommended.

No, as a rule. The agreement binds only its signatories (relative effect of contracts, Article 1199 of the French Civil Code). Third parties acting in good faith cannot have imposed on them a clause of which they are unaware. This is why heavy commitments (inalienability, approval, exclusion) must also appear in the articles of association if they are to take effect against new shareholders or transferees.

A private signature is sufficient in almost all cases. Qualified electronic signature is now widely used for remote signing between founders and investors. A notarial deed becomes useful where the agreement contains transfers of real estate or gifts between shareholders. The firm manages the electronic signature for you.

For a simple agreement between two or three founders with no outside investor, fees start at around €1,800 incl. VAT. For a full agreement with an investor, drag, tag, leaver, anti-dilution and a price formula, the budget is generally between €3,500 and €7,000 incl. VAT depending on the complexity of the round. The firm sends a written quote after an initial discussion.

Disputes between shareholders fall within the jurisdiction of the commercial court of the registered office, that is, the Paris commercial court (tribunal de commerce) for a company registered in Paris. The agreement may provide for an arbitration clause before a sole arbitrator or an arbitral tribunal, which speeds up the decision and preserves confidentiality. The firm regularly pleads before the Paris commercial court.

Yes, by an amendment signed between the original parties and any new signatories. Every change must be traceable, dated and signed. When a new investor becomes a shareholder, it is common to sign a new agreement that cancels and replaces the previous one (novation clause). The firm ensures consistency between the old and new commitments.