Statutory auditor lawyer in Paris: appointment, challenge, removal

An SAS must appoint at least one statutory auditor when, at the close of a financial year, it exceeds two of the three thresholds set by decree (Article L. 227-9-1 of the Commercial Code). The decree sets total balance sheet of €5,000,000, turnover excl. tax of €10,000,000 and average headcount of fifty employees (Article D. 221-5, to which Article D. 227-1 refers).

Total balance sheet and turnover are calculated under the rules of Article D. 123-200: net amounts of assets, sales less reductions and taxes. Exceeding a single threshold is not enough. The same rule applies to the limited liability company (SARL) (Article L. 223-35) and to the public limited company (société anonyme) (Article L. 225-218).

The Court of Cassation has held, for the transition under the Law of 22 May 2019, that existing terms continued until their end, even after the incumbent's resignation (Cass. com., 10 May 2024, No. 22-16.158). The obligation is therefore checked financial year by financial year, and the timetable of the collective decision must take this into account.

A company that controls one or more companies within the meaning of Article L. 233-3 of the Commercial Code appoints at least one statutory auditor when the group it forms with its subsidiaries exceeds two of the three thresholds (Article L. 821-43). The thresholds are the same as for a single company, but the amounts are added together: total balance sheets, turnover and average headcount of the entities in the group (Article D. 821-171).

A holding company with no activity of its own may thus become bound to appoint a statutory auditor even though none of its subsidiaries exceeds the thresholds alone. The obligation does not apply where the parent company is itself controlled by a person or entity that has appointed a statutory auditor.

Subsidiaries controlled by a company required to appoint a statutory auditor must in turn appoint one if they exceed two of the following thresholds: €2,500,000 of balance sheet, €5,000,000 of turnover excl. tax and twenty-five employees (Article D. 821-172). For these appointments, the company may limit the term to three financial years (Article L. 821-46). The firm reconstructs the organisation chart and the control relationships before any calculation.

Yes, by two separate routes. Shareholders representing at least one-third of the share capital may send the company a reasoned request; the company is then required to appoint a statutory auditor for a term of three financial years (Article L. 227-9-1 of the Commercial Code for the SAS, Article L. 223-35 for the SARL). This route does not go through the court.

One or more shareholders representing at least one-tenth of the share capital may also apply to the court for an appointment, even if the company remains below the thresholds. The judge does not grant this automatically. The Dijon court of appeal states that “Where the appointment of a statutory auditor is not mandatory, it must be assessed in light of the company's interest and not that of the shareholders” (our translation) (CA Dijon, 3 April 2025, No. 24/01114). It upheld the appointment in view of questionable accounting entries, repeated postponements of the meeting and shareholders' equity that had fallen below half of the share capital.

A conflict between shareholders is therefore not enough: the application must show why the company itself needs an independent audit of its accounts.

The court depends on the provision relied on. In Paris, the powers of the president of the commercial court have been exercised by the president of the economic activities court since 1 January 2025 (Order of 5 July 2024). Where a shareholder holding one-tenth of the share capital of an SAS requests an appointment below the thresholds, the statutory auditor is appointed by the president of the commercial court ruling under the accelerated procedure on the merits (Article D. 227-1 of the Commercial Code). The Cannes commercial court held such a request “inadmissible before the urgent applications judge” (our translation) and told the shareholder to pursue the proper route: no statutory auditor was therefore appointed and the shareholder bore the costs (TC Cannes, 11 June 2026, No. 2026R00006).

Where the meeting fails to appoint a statutory auditor although it is required to do so, any member of the meeting may apply to the court for an appointment (Article L. 821-47), and the president of the commercial court then rules as urgent applications judge (Article D. 821-174). The Poitiers commercial court held that “The jurisdiction of the urgent applications judge is therefore expressly provided for by the texts and is not open to any serious challenge” (our translation), then appointed the statutory auditors after the shareholders' deadlock at the meeting (TC Poitiers, 30 June 2025, No. 2025000072).

The route is chosen before the writ of summons is issued: it determines the admissibility of the application.

Two risks coexist. In civil law, Article L. 821-5 of the Commercial Code, in its current wording, declares null the resolutions of the ordinary meeting passed in the absence of a proper appointment. Ruling on the equivalent provision applicable in New Caledonia, the Court of Cassation holds that this nullity “is a matter of public policy and applies regardless of whether the appointment of the statutory auditor is voluntary or required by law or by the articles of association” (our translation) (Cass. com., 21 June 2023, No. 21-19.985). It nevertheless limits the sanction to the absence of a proper incumbent, and not to that of the alternate alone. Applying this time Articles L. 821-5 and L. 821-40, it also excludes it for extraordinary decisions, nullity applying only to resolutions of ordinary meetings (Cass. com., 11 March 2026, No. 24-16.260).

This regime changes on 1 January 2027. The new provision, resulting from Article 67 of Order No. 2025-229 of 12 March 2025, provides that nullity may be incurred where the engagement is entrusted by statute or regulation and refers to Articles 1844-10 to 1844-17 of the French Civil Code (Code civil) (Article L. 821-5 in its forthcoming version). The action will lapse in particular if the cause of nullity has ceased on the day the court rules at first instance (Article 1844-11 of the Civil Code).

In criminal law, a director who fails to cause the appointment faces two years' imprisonment and a fine of €30,000 (Article L. 821-6).

In principle, no. The meeting or the shareholders collectively cannot end the current term at their convenience. The only case provided for by the texts is where the audit firm is absorbed by another: the meeting may then, at its first meeting after the absorption and after hearing the statutory auditor, deliberate on whether to maintain the engagement (Article L. 821-48 of the Commercial Code). Outside that case, the statutory auditor is in principle appointed for six financial years and their functions expire after the decision approving the accounts for the last financial year of the term (Article L. 821-44). Before that end, only the court may intervene, by challenge or by removal.

The Versailles court of appeal explains this rigidity by the nature of the engagement: the statutory auditor carries out a permanent audit that they must be able to conduct in complete independence from the directors, and “the statutory auditor is indeed not a mere service provider” (our translation) (CA Versailles, 14 November 2024, No. 24/00341). A dissatisfied company can therefore neither withdraw the engagement by collective decision nor stop convening the auditor: failing to convene the auditor to a meeting is punishable by two years' imprisonment and a fine of €30,000 (Article L. 821-6).

At the end of the term, the company may propose not to renew. The statutory auditor must then, if they so request, be heard by the meeting (Article L. 821-51). Non-renewal is therefore prepared in the agenda and in the resolution appointing the successor.

Removal requires a fault or an impediment. It may be requested by the management or administrative body, by shareholders representing at least 5% of the share capital, by the works council or by the public prosecutor's office (Article L. 821-50 of the Commercial Code). The president of the commercial court rules under the accelerated procedure on the merits, and the alternate replaces the removed statutory auditor (Article R. 821-176). In Paris, the commercial court is designated as the economic activities court for the experiment opened on 1 January 2025 for four years: it is therefore its president who rules (Order of 5 July 2024).

The threshold of seriousness is high. For the Versailles court of appeal, “the fault referred to in Article L. 821-50 must be so serious that it constitutes a decisive obstacle to the continuation of the engagement until its scheduled end” (our translation) (CA Versailles, 14 November 2024, No. 24/00341). The Paris economic activities court rejected the application of companies relying on a disciplinary sanction imposed on their statutory auditor for another engagement: “The impediment is therefore not demonstrated” (our translation) (TAE Paris, 15 October 2026, No. 2026048999).

Conversely, the Strasbourg judicial court ordered the removal of a statutory auditor who had triggered an alert solely because of a small amount of unpaid fees, holding that “these two alert letters undeniably amount to an abuse of power and a misuse of procedure” (our translation) (TJ Strasbourg, 3 June 2026, No. 25/02874). The file must therefore establish either a specific and sufficiently serious fault by the statutory auditor concerned, or a genuine and justified impediment.

A challenge targets a statutory auditor who has just been appointed and whose appointment is contested for good cause. It may be requested by shareholders representing at least 5% of the share capital, by the works council or by the public prosecutor's office (Article L. 821-49 of the Commercial Code). The provision expressly excludes one ground: a difference of view on an accounting treatment or on an audit procedure is not a valid ground.

The time limit is short. The application must be made within thirty days of the appointment, against the statutory auditor and against the company, before the president of the commercial court or, in Paris, of the economic activities court, ruling under the accelerated procedure on the merits (Article R. 821-176). After that time limit, only removal remains available, which requires a fault or an impediment.

If the application succeeds, a new statutory auditor is appointed by the court and the engagement ends when the meeting appoints one. The court registry informs the High Authority for Audit (Haute autorité de l'audit) within eight days (Article R. 821-177). The provision does not define good cause: it must be established by specific documents from the writ of summons onwards, and must not be confused with a disagreement over the accounts.

No. The Court of Cassation holds that the statutory six-financial-year term attaches to the engagement and not to the person: “this duration cannot be affected by the auditor's resignation during the term, a new statutory auditor having, in such a case, to be appointed for the remainder of the term” (our translation) (Cass. com., 10 May 2024, No. 22-16.158). In that case, companies argued that the resignation allowed them to stop appointing a statutory auditor; their appeals to the Court of Cassation were dismissed.

The alternate replaces the resigning incumbent until the end of the term entrusted to the latter (Article L. 821-40). An alternate must nevertheless have been appointed; where the incumbent is an individual or a single-member company, the company must again have an alternate. Ruling under the provisions applicable in New Caledonia, the Court of Cassation has however held that the absence of the alternate alone, where a proper incumbent is in office, does not justify annulling the resolutions of the meeting (Cass. com., 21 June 2023, No. 21-19.985).

A director who receives a letter of resignation must therefore arrange the replacement for the remaining period, and not assume that the obligation has disappeared.

The exit is never immediate. The current term runs to its end; the company is no longer required, on the thresholds alone, to appoint a statutory auditor provided it has not exceeded two of the three thresholds during the two financial years preceding the expiry of the term (Article D. 221-5 of the Commercial Code, Article D. 227-1 for the SAS). The rule is the same for the group formed by a parent company and its subsidiaries (Article D. 821-171).

A fall in activity during the term therefore allows neither termination of the engagement nor ceasing to convene the statutory auditor. The decision is taken at the meeting that approves the accounts for the last financial year of the term: it records the position against the thresholds and decides not to renew. The statutory auditor may ask to be heard (Article L. 821-51).

Two caveats apply. A reasoned request from shareholders representing one-third of the share capital may impose a new term of three financial years. Articles of association that provide for a statutory auditor must be amended if the company wishes to dispense with one.

The fees are borne by the company whose accounts are certified (Article L. 821-66 of the Commercial Code). For the certification of accounts, the hourly rate is fixed by mutual agreement before the engagement is carried out (Article R. 821-192): the engagement letter is the first document to re-read.

Where the statutory auditor and the directors disagree on the amount of the remuneration, the president of the regional professional body, seised in writing by the interested party, endeavours to reconcile the parties; the president has three months and notifies any failure by registered letter (Article R. 821-196).

A disagreement over fees does not, on its own, justify an application for removal. In the case decided in Strasbourg, the parties had concluded a conciliation reducing the fees; the court set aside the old grievances raised by the company, but found fault with the statutory auditor who had used the alert procedure to obtain payment of the balance (TJ Strasbourg, 3 June 2026, No. 25/02874). Each party therefore has an interest in staying within the conciliation route.

The statutory auditor may certify, certify with qualifications, refuse to certify or declare that it is impossible to certify, giving reasons for the position taken (Article R. 821-180 of the Commercial Code). The company's disagreement with this opinion is not, on its own, enough to obtain the removal of the statutory auditor.

If the company wishes to go further, it must separately establish the conditions for removal, fault or impediment, described above. In the case decided by the Versailles court of appeal, the director contested an impossibility to certify linked to financial support that management refused to provision or to disclose in the notes; the application for removal was rejected on appeal as at first instance. The court recalls that the meeting remains entitled to approve the accounts, “certification not being, indeed, a condition for the approval of the accounts, but intended to inform the shareholders called upon to approve the accounts” (our translation) (CA Versailles, 14 November 2024, No. 24/00341). The law also specifies that a difference of view on an accounting treatment is not a ground for challenge (Article L. 821-49).

The useful response is built in advance: complete the notes, document the treatment adopted, reply in writing to the statutory auditor's requests before the date of the report, and prepare the information of the shareholders if the qualification is maintained.

The case is common: a term has expired and was not renewed, or the renewal was not placed on the agenda. In its current wording, Article L. 821-5 of the Commercial Code extinguishes the nullity action if the resolutions are expressly confirmed on the report of properly appointed statutory auditors. Confirmation therefore first presupposes a proper appointment.

The Paris court of appeal annulled a series of resolutions after an attempt at regularisation made without that prerequisite: “these reports do not satisfy the requirement laid down by the second paragraph of the aforementioned Article L. 820-3-1, in that they come from a statutory auditor who was not properly appointed” (our translation) (CA Paris, pôle 5 ch. 9, 1 June 2023, No. 21/14322). The rule of the former Article L. 820-3-1, then applicable, now appears in Article L. 821-5.

Where the validity of an appointment is doubtful, the appointment can be secured by the court. The Marseille economic activities court thus appointed a joint statutory auditor, specifying that “This appointment will include an engagement to certify the accounts as well as a supplementary regularisation engagement pursuant to Article L. 821-5 of the Commercial Code” (our translation) (TAE Marseille, 23 April 2026, No. 2026R00064). From 1 January 2027, regularisation will also be governed by Articles 1844-10 to 1844-17 of the Civil Code.

In companies other than the société anonyme, a statutory auditor who identifies facts liable to jeopardise the continuity of the business asks the director for explanations, and the director must reply within fifteen days (Article L. 234-2 of the Commercial Code). The president of the commercial court is informed. If the reply does not reassure the auditor, the auditor draws up a special report and invites the director to convene a meeting on the facts identified. In the société anonyme, the procedure first goes through the board of directors or supervisory board (Article L. 234-1).

The alert is not a sanction: it is an adversarial exchange whose first stage rests on the director's written reply. That reply must set out the facts, the measures taken and the cash-flow information that allow the continuity of the business to be assessed.

The alert must nevertheless rest on real facts. The Strasbourg judicial court removed a statutory auditor who had triggered it for a balance of fees of a few thousand euros (TJ Strasbourg, 3 June 2026, No. 25/02874). The firm examines the facts relied on and prepares the reply within the time limit.