A foreign acquisition can change the audit obligations of a French company even when the French subsidiary\u2019s own turnover, assets and headcount have not changed. The decisive issue is not the nationality of the new shareholder. It is the legal control created by the transaction, the size of the relevant company or group, and the stage at which the French accounts must be certified.<\/p>\n
In French law, a statutory auditor is a commissaire aux comptes<\/em>, usually abbreviated as CAC. The CAC is an independent auditor who certifies the company\u2019s accounts and reports certain matters required by law. The company may be an SAS, meaning a simplified joint-stock company; a SARL, meaning a limited liability company; or another commercial form. The test now revolves around two of three financial and employment thresholds, with a separate regime for controlled companies in a qualifying group.<\/p>\n This question sits within the wider process of forming and governing a French company<\/a>. The present article deals with the narrower post-acquisition audit trigger: the change in control, the group perimeter and the appointment timetable.<\/p>\n This guide focuses on the practical question faced after a non-French parent acquires a French company: which figures must be counted, when does the obligation arise, how is control assessed, and how should the appointment be approved and registered? It also covers existing mandates, voluntary appointments, shareholder remedies and the consequences of an invalid resolution. The legal references were checked against the official sources available on 26 August 2026. The answer must still be confirmed against the transaction documents, the accounting close and the precise group chart.<\/p>\n The first calculation is the ordinary company test. For a commercial company that is not being assessed as a controlled company under the group rules, the statutory-auditor obligation is generally triggered when the company exceeds two of the following three thresholds at the close of the relevant financial year: \u20ac5 million in total balance-sheet assets, \u20ac10 million in turnover excluding value-added tax, and an average workforce of 50 employees. \u201cExcluding value-added tax\u201d is the meaning of the French accounting expression hors taxes<\/em>, often shortened to HT. Exceeding one threshold alone is not enough.<\/p>\n The current figures are set out in Article D. 221-5 of the French Commercial Code<\/a>. That provision states, in the official wording, Do not confuse the statutory-auditor thresholds with the separate accounting categories used to determine whether simplified accounts may be prepared. The definition of the balance-sheet total, net turnover and average workforce matters. Article D. 123-200 of the Commercial Code<\/a> provides that the balance-sheet total is the sum of the net asset amounts, that net turnover corresponds to sales of products and services connected with ordinary business after reductions and indirect taxes, and that the average workforce is assessed under the social-security rules, subject to a rule for a financial year that does not match the calendar year. The accounting pack used for the audit analysis must therefore be consistent with those definitions, rather than a management dashboard using a different perimeter.<\/p>\n The foreign acquisition becomes legally significant when it creates or changes control. Control is not limited to ownership of more than half of the shares. Under Article L. 233-3 of the Commercial Code<\/a>, a person or company may control another entity through a majority of voting rights, an agreement with other shareholders, the power to determine decisions in practice, or the power to appoint or remove a majority of the management, directing or supervisory body. Control is also presumed in the stated circumstances where more than 40% of the voting rights are held and no other shareholder holds a larger fraction. Two persons acting in concert can be treated as jointly controlling the company.<\/p>\n This means that an acquisition file should be read together with the articles of association, voting agreements, preferred-vote arrangements, shareholder loan terms and board appointment rights. A foreign parent that acquires 48% of the capital may nevertheless control the French company if it holds the decisive voting rights or the contractual power to appoint the majority of directors. Conversely, a 60% economic interest may need a more careful analysis if voting rights have been separated or if the transaction has not yet closed. The statutory-auditor analysis should record the control route, the effective date and the entities controlled directly or indirectly.<\/p>\n The group test then operates in two directions. First, a company that controls one or more companies can be required to appoint a CAC based on the figures of the whole group perimeter. Second, certain controlled companies can have a separate obligation based on reduced thresholds. Article L. 821-43 of the Commercial Code<\/a> expressly refers to the companies controlled within the meaning of Article L. 233-3 and to the combined balance sheet, HT turnover and average workforce. The provision uses the phrase For the head of a group, the ordinary group thresholds are \u20ac5 million of combined balance-sheet assets, \u20ac10 million of combined HT turnover and 50 average employees, again with two of the three criteria exceeded. The relevant calculation is not a simple addition of every number appearing in each foreign parent\u2019s global accounts. It must identify the French-law control perimeter and apply the statutory accounting rules. Foreign subsidiaries, minority investments and entities under common control should be mapped separately, with an explanation of why each entity is included or excluded.<\/p>\n For a controlled company that falls within the scope of the third paragraph of Article L. 821-43, the reduced thresholds are \u20ac2.5 million of total balance-sheet assets, \u20ac5 million of HT turnover and 25 average employees. Article D. 821-172 of the Commercial Code<\/a> sets out those amounts and applies the same two-out-of-three logic. Its wording refers to The reduced subsidiary regime is not a free-standing rule that applies to every company with a foreign shareholder. It is connected to the group conditions in Article L. 821-43. The first question is whether a controlling entity or group is itself within the relevant statutory category and perimeter. The second is whether the French subsidiary meets two of the reduced criteria. The transaction\u2019s legal structure, the identity of the controlling entity and any higher-level control must all be checked. If a controlling entity is itself controlled by a person or entity that has already appointed a CAC, the first paragraph contains an exception that may alter the analysis.<\/p>\n A foreign acquisition can also create an obligation through consolidated accounts. If the French or foreign group is legally required to publish consolidated accounts, Article L. 821-41 of the Commercial Code<\/a> requires at least two CACs for the certification of those accounts. This is a different question from whether one CAC must certify the French subsidiary\u2019s individual accounts. The board should therefore ask two separate questions: does the French entity need a CAC for its own accounts, and does the group need one or more CACs for consolidated reporting?<\/p>\n Entities of public interest can be subject to additional rules independent of the ordinary small-company thresholds. A regulated bank, insurer, listed entity or other entity with a special legal status should not rely on the commercial-company calculation alone. The same caution<\/a> applies where the acquisition includes a merger, contribution of assets, transformation, capital increase or regulated activity. Those transactions may require a separate report by a CAC or another legally qualified professional, even if the two-out-of-three size test is not crossed.<\/p>\n The acquisition closing date is not automatically the date on which the CAC must be appointed. The size thresholds are generally assessed at the close of a financial year, while the appointment is made through the corporate body that approves the accounts or otherwise has competence under the company\u2019s rules. A share transfer completed on 15 September may change the control perimeter immediately, but the figures for the completed financial year and the applicable transition rules determine when the statutory appointment must be made. The board should not wait until the next acquisition or financing round if the existing accounts already show that two criteria have been exceeded.<\/p>\n For the ordinary company threshold, Article D. 221-5 also provides a two-year exit rule. A company is no longer required to appoint a CAC only when it has not exceeded two of the three figures during the two financial years preceding the expiry of the mandate. This prevents a company from treating a single weaker year as an immediate end to a six-year appointment. The official text of Article D. 221-5<\/a> also addresses the reduced group test through the connected provisions and confirms that the current rules apply to accounts and reports for financial years opened from 1 January 2024, while mandates already in progress continue under the duration rule.<\/p>\n The same permanence principle applies to a controlled company assessed under the reduced figures. Article D. 821-172 says that the obligation ends only when the company has not exceeded two of the three reduced figures during the two financial years before the mandate expires. The foreign parent\u2019s decision to sell part of its stake, the loss of a major customer or a reduction in headcount may therefore change future calculations without cancelling the current mandate. The legal calendar must distinguish \u201cthe threshold was crossed,\u201d \u201cthe appointment was due,\u201d and \u201cthe existing mandate may lawfully end.\u201d<\/p>\n Article L. 821-44 establishes the basic duration: the CAC is appointed for six financial years and remains in office until the body that approves the accounts for the sixth year has deliberated. The replacement CAC, if one is appointed, completes the predecessor\u2019s remaining term. The statutory text is available at Article L. 821-44 of the Commercial Code<\/a>. A foreign purchaser should obtain the French company\u2019s previous appointment resolution, acceptance letter, report and registry extract before assuming that the mandate disappeared when ownership changed.<\/p>\n The Court of Cassation applied that continuity rule to French SAS companies in its commercial chamber decision of 10 May 2024, pourvois nos 22-16.158 and related joined appeals<\/a>, ECLI:FR:CCASS:2024:CO00249. The decision concerned mandates that began before the 2019 threshold reform. The Court held that the new statutory conditions did not apply to mandates already in progress and that the resignation of the original CAC did not end the mandate, so a replacement had to serve for the remaining period. The judgment is particularly useful in an acquisition because a new shareholder may be tempted to treat a resignation or a new board as a reset. It is not a reset.<\/p>\n The 2024 decision is a transitional-law authority, not a licence to apply old thresholds to a new appointment. For a post-acquisition appointment, use the current provisions and current figures. Use the case to identify whether an existing mandate continues and whether a registry request to remove a CAC is legally coherent. The transaction timetable should contain a separate \u201clegacy mandate\u201d workstream so that the legal team does not mix a historic SAS mandate with the new group calculation.<\/p>\n The form of the French company does not remove the need for this analysis. For an SAS, Article L. 227-9-1 of the Commercial Code<\/a> provides the statutory-auditor framework and allows the associates to appoint one under the applicable collective-decision rules. A SARL is subject to its own corporate decision rules, but the current group provisions can still matter. The foreign purchaser should ask for the articles, the last two sets of accounts, the accounting close date, the current Kbis and the full ownership chart before deciding that the answer is \u201cno CAC.\u201d<\/p>\n Once the analysis shows that a CAC is required, the company should prepare a written appointment process rather than merely instructing an audit firm by email. A Kbis is the official extract of the French company\u2019s registration. The greffe<\/em> is the registry office attached to the competent commercial court. The Kbis should ultimately reflect the identity and term of the appointed CAC where the relevant filing is required. Since registrations are now handled through the French National Industrial Property Institute, or INPI, the filing pack should be prepared for the online one-stop shop and checked against the information that will be visible in the company register.<\/p>\n Article L. 821-40 of the Commercial Code<\/a> states that, outside a statutory appointment, CACs are designated by the ordinary general meeting in a legal entity that has such a body, or by the analogous competent body. Its wording refers to The appointment resolution should identify the CAC precisely: legal name, professional form, registered address, registration details where required, and whether a natural-person CAC or a single-member company requires a substitute. The resolution should state the legal basis for the appointment, the financial years covered, the mandate\u2019s starting point and, where relevant, the group or controlled-company test. Attach the candidate\u2019s acceptance and independence confirmations. Keep the calculations showing balance-sheet assets, HT turnover and average employees, together with the group chart and the control rights created by the acquisition.<\/p>\n The agenda must be drafted with care. The foreign parent may have negotiated a preferred audit firm, but the appointment remains a decision of the French company\u2019s competent body. The appointment question, the proposed CAC and any substitute should appear clearly in the notice and agenda. The attendance sheet, proxies, voting result and minutes should be retained with the accounts file. If the buyer is relying on an acquisition agreement, the corporate secretary should still prepare a French-law resolution rather than treating a contractual signature as the appointment itself.<\/p>\n The Court of Cassation\u2019s commercial, financial and economic chamber addressed this point in its decision of 14 February 2018, pourvoi no 15-16.525<\/a>, published in the Bulletin. The case concerned a SARL whose meeting was asked to approve a different CAC from the candidate named in the circulated resolution. The Court held that the question of appointing a CAC and substitute had to be on the agenda and that a new resolution naming different candidates was irregular. The judgment\u2019s practical lesson is direct: if the candidates change, issue a compliant notice and hold the appropriate vote instead of relying on an improvised amendment at the meeting.<\/p>\n The resolution should also cover the scope of the appointment. If the same CAC has recently examined a contribution or merger involving the company or companies it controls, Article L. 821-40 requires the proposed resolution to mention that fact. This is important after an acquisition because the transaction may have included a contribution of shares, a merger, a contribution in kind or a capital restructuring. The corporate records should show whether a separate contribution or merger report was required and whether the proposed statutory auditor is independent for the certification mission.<\/p>\n There is no general contractual clause allowing the foreign parent to restrict the French assembly\u2019s choice to a closed list. Article L. 821-40 treats a contractual clause that limits the choice to categories or lists of CACs as unwritten. A group procurement policy can help identify candidates and negotiate fees, but the French corporate body must retain its legal decision-making power. A shareholders\u2019 agreement cannot be used to erase the agenda, voting or independence requirements.<\/p>\n After approval, the company should file the appointment or amendment through the applicable INPI and registry process, update the internal legal calendar and preserve the proof of submission, receipt and acceptance. The registry extract should be checked when the filing has been processed. The tax authority, bank, lender or foreign parent may ask for a current Kbis, but the Kbis is evidence of the registered status, not a substitute for the underlying resolution, acceptance and calculations. The company should retain both the public filing and the full board or shareholder file.<\/p>\n When the acquisition creates a controlled group, prepare the file in two layers. The first layer is the French subsidiary\u2019s own two-out-of-three calculation. The second is the control and group file: the acquisition agreement, voting map, direct and indirect ownership, figures supplied by each controlled entity, consolidation perimeter, any foreign auditor appointment and the reason each foreign entity was included or excluded. A bilingual document may be useful for the parent, but the French corporate records should use consistent legal terms and figures.<\/p>\n If the group is required to publish consolidated accounts, the company must also coordinate the appointment of the required number of CACs and the timetable for consolidated reporting. The individual French company\u2019s auditor and the group auditor may be the same firm only when the applicable independence, scope and appointment rules are satisfied. The fact that a foreign parent has an auditor in its home jurisdiction does not, by itself, prove that the French company has complied with the French appointment and certification rules.<\/p>\n A missed appointment should be treated as a governance defect requiring prompt regularisation. The company should identify the first financial year affected, the meeting that should have made the appointment, the accounts that were approved without the required report and every filing or transaction that relied on those accounts. The board should obtain a written threshold calculation and convene the competent body with a compliant agenda. If the company is in an acquisition dispute, the audit issue should be disclosed rather than buried in a closing certificate.<\/p>\n Article L. 821-47 provides a direct judicial remedy. If the assembly or competent body omits to appoint a CAC, any member of that body may ask the court to appoint one, after the legal representative has been called. The statute states that A defective resolution creates a separate risk from a missed resolution. Under Article L. 821-5 of the Commercial Code<\/a>, deliberations of the relevant body can be null where they were adopted without a regular CAC appointment or on the report of a CAC appointed or retained contrary to the applicable rules. The official provision begins, The company should also consider sanctions for the person responsible for failing to provoke an appointment where the legal obligation was clear. The current penalty analysis must be checked against the company form, the offence provisions in force at the relevant date and the facts showing knowledge and intent. The Court of Cassation, criminal chamber, in its decision of 29 November 2016, pourvoi no 15-84.635<\/a>, upheld a conviction arising from the failure to appoint a CAC after two criteria had been exceeded. The decision records that the company could not avoid the obligation by pointing to a later year in which the thresholds were no longer exceeded. It is an older-threshold case, so it must not be used to replace the current \u20ac5 million, \u20ac10 million and 50-employee figures; it remains relevant for the timing and compliance principle.<\/p>\n The acquisition agreement can allocate economic responsibility between buyer and seller, but it cannot make a French legal obligation disappear. If the seller\u2019s accounts were prepared without a required certification, the buyer should review warranty clauses, disclosure schedules, completion accounts and any indemnity for pre-closing compliance. If the buyer became the controlling shareholder before the affected meeting, it should document the steps taken to obtain an appointment. The directors\u2019 duties, the validity of shareholder decisions and the reliability of information provided to lenders may all be affected by the gap.<\/p>\n A late appointment does not automatically cure every historic consequence. The company needs to ask whether the CAC can audit the relevant periods, whether reports can be issued for the accounts already approved, whether a new approval is required and whether the registry and third parties must be informed. The answers depend on the date of the threshold crossing, the form of the company, the content of the resolutions and the nature of the affected transaction. A parent\u2019s foreign audit report may assist the factual review but does not automatically replace a French CAC report.<\/p>\n Voluntary appointment is available when the mandatory thresholds are not crossed. It may be sensible after an acquisition where the foreign lender requires audited accounts, where the parent wants independent assurance over the subsidiary, or where a future sale or financing is planned. Under Article L. 821-46 of the Commercial Code<\/a>, a company that appoints a CAC voluntarily, or in certain group situations, may limit the mandate to three financial years. A mandatory ordinary appointment remains subject to the statutory six-year duration in Article L. 821-44. The resolution should say which route is being used; calling a mandatory appointment \u201cvoluntary\u201d to obtain a shorter term creates avoidable uncertainty.<\/p>\n A voluntary appointment may also be requested by shareholders through the applicable procedure. For an SAS, Article L. 227-9-1 allows one or more shareholders representing at least one-tenth of the capital to ask the court for an appointment even when the ordinary thresholds are not reached. This is separate from the Article L. 821-47 remedy for an omitted mandatory appointment. The foreign parent and minority investors should review both provisions if the acquisition has produced a conflict over the audit firm, the group figures or the reliability of the financial information supplied during the transaction.<\/p>\n Finally, keep the legal calendar after the appointment. Record the financial years covered, the date of the sixth-year accounts meeting, any three-year voluntary term, the two-year exit test, the renewal or replacement process and the filing deadline. Each annual close should update the group chart and the three criteria. A change in foreign ownership, a new subsidiary, a share buyback, a management-control agreement or a consolidation decision can alter the analysis before the next acquisition. The safest file is one that allows a new director who has never worked in France to reconstruct the answer from the documents without guessing.<\/p>\n A foreign acquisition does not automatically require a statutory auditor merely because the buyer is foreign. It can, however, change the legal control perimeter and bring the French company or the group into the two-out-of-three test. Start with the current thresholds: \u20ac5 million of assets, \u20ac10 million of HT turnover and 50 average employees for the ordinary and group-head calculation; \u20ac2.5 million, \u20ac5 million and 25 employees for a controlled company within the relevant group regime. Then verify control under Article L. 233-3, separate individual from consolidated accounts, and check every existing mandate.<\/p>\n The appointment should be made by the competent French corporate body with a precise agenda, candidate acceptance, independence evidence, minutes and registry filing. A six-year mandate normally continues through a change of owner. If the body omits the appointment, a member may seek a judicial designation. If the resolution is defective, subsequent deliberations and accounts approvals may be challenged. The acquisition checklist should therefore include the CAC analysis before signing, at closing and at the first annual accounts meeting.<\/p>\n A foreign acquisition, change of control or group-restructuring file can require a rapid review of the thresholds, corporate resolutions, audit mandate and French registry steps. We offer a telephone consultation within 48 hours with a lawyer from the firm.<\/p>\n Call 06 46 60 58 22<\/a> or use the contact form<\/a> to send the transaction timetable and the latest French accounts.<\/p>\n","protected":false},"excerpt":{"rendered":" A foreign acquisition can change a French company\u2019s statutory-auditor test. This guide explains group thresholds, control, appointment, filing steps and remedies for SAS and SARL founders.<\/p>\n","protected":false},"author":251031309,"featured_media":16471,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_kj_source_type":"","_kj_official_id":"","_kj_official_url":"","_kj_judilibre_id":"","_kj_jur":"","_kj_lieu":"","_kj_chambre":"","_kj_rg":"","_kj_date":"","activitypub_content_warning":"","activitypub_content_visibility":"","activitypub_max_image_attachments":4,"activitypub_interaction_policy_quote":"anyone","activitypub_status":"federated","footnotes":""},"categories":[80314,80313],"tags":[],"class_list":["post-2107901","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-decryptage","category-doing-business-in-france"],"yoast_head":"\nI. When does a foreign acquisition trigger the French statutory-auditor test?<\/h2>\n
A. Which thresholds apply to the French company and to the acquired group?<\/h3>\n
\u00ab le total du bilan est fix\u00e9 \u00e0 5 000 000 euros, le montant hors taxe du chiffre d’affaires \u00e0 10 000 000 euros et le nombre moyen de salari\u00e9s \u00e0 cinquante \u00bb<\/q>. The practical translation is a two-out-of-three test. A French SAS with \u20ac11 million of HT turnover, \u20ac3 million of assets and 35 employees has crossed one criterion only. A French SARL with \u20ac6 million of assets and 55 employees has crossed two and must be assessed for appointment.<\/p>\n
\u00ab le total cumul\u00e9 de leur bilan \u00bb<\/q>, which is why an empty or lightly staffed holding company cannot automatically be treated as outside the regime when its controlled businesses are substantial.<\/p>\n
\u00ab vingt-cinq \u00bb<\/q> average employees. A French subsidiary with \u20ac5.5 million of HT turnover, \u20ac1.8 million of assets and 18 employees has crossed only one reduced criterion. A subsidiary with \u20ac5.5 million of turnover and \u20ac2.7 million of assets has crossed two and needs an appointment analysis even if the foreign parent\u2019s acquisition did not increase French sales.<\/p>\n
B. At what date must the company decide, and what happens to a prior mandate?<\/h3>\n
II. How should the company appoint and document the statutory auditor?<\/h2>\n
A. Which corporate resolution, documents and filings are required?<\/h3>\n
\u00ab l’assembl\u00e9e g\u00e9n\u00e9rale<\/a> ordinaire \u00bb<\/q>. For an SAS, the articles of association normally specify the collective procedure and voting majority, subject to the statutory rules in Article L. 227-9 and the specific appointment provision. For a SARL, the associates\u2019 meeting and notice rules must be followed. A wholly owned subsidiary still needs a properly documented decision by its sole associate or competent organ.<\/p>\n
B. What are the remedies and risks if the appointment is missed or defective?<\/h3>\n
\u00ab tout membre de l’assembl\u00e9e ou de l’organe comp\u00e9tent peut demander en justice \u00bb<\/q> the appointment. The court-appointed mandate ends when the assembly or competent body makes its own appointment. A foreign shareholder who cannot secure a vote because of a deadlock should therefore examine the court route rather than allowing the company to remain without the required auditor.<\/p>\n
\u00ab Sont nulles les d\u00e9lib\u00e9rations \u00bb<\/q>, and allows the nullity action to expire if the competent body expressly confirms the deliberations on the report of properly appointed CACs. This is why the 2018 agenda decision matters after a foreign acquisition: a rushed appointment can create a second defect in the accounts approval process.<\/p>\n
Conclusion<\/h2>\n
Need a quick opinion on your case<\/h2>\n