Your French company is running, the clients are paying, and yet every decision is a fight. Your Paris associate blocks the accounts, refuses to sign, competes with the company on the side or simply disappeared back to his own projects. You live in London, New York, Dubai or Singapore, and you wonder whether French law lets you force that partner out of the company without flying to Paris every month for three years of litigation. The answer depends almost entirely on one document: the articles of association of your SAS.<\/p>\n
A SAS (soci\u00e9t\u00e9 par actions simplifi\u00e9e, the flexible French joint-stock company most foreign founders choose) can provide in its articles that a shareholder may be forced to sell his shares. This is called the exclusion clause. Unlike a dismissal of an employee or the removal of a company president, exclusion does not happen by operation of law: it only works if the clause was written in advance, if the procedure gives the targeted shareholder a real chance to defend himself, and if the price of his shares is fixed by agreement or by an independent expert. This article explains, step by step, how a non-resident majority shareholder can use that clause from abroad, what the Cour de cassation (the French supreme court for civil and commercial matters) actually requires, and how the file is closed at the Paris company registry so the Kbis (the official company identity extract issued by the greffe, the clerk’s office of the commercial court) shows the right shareholders again. If you are still hesitating between company forms, our general guide on setting up a company in France as a foreign founder, from bank account to Kbis, VAT and first hire<\/a> remains the starting point; this article takes over where that guide stops, when the partnership itself breaks down.<\/p>\n French law does not expel a shareholder automatically for bad behaviour. The starting point is Article L227-16 of the Commercial Code<\/a>, which provides that the articles may state that a shareholder can be required to transfer his shares: “Dans les conditions qu’ils d\u00e9terminent, les statuts peuvent pr\u00e9voir qu’un associ\u00e9 peut \u00eatre tenu de c\u00e9der ses actions.” The same article adds that the articles may also suspend the non-financial rights of that shareholder until he has transferred: “Ils peuvent \u00e9galement pr\u00e9voir la suspension des droits non p\u00e9cuniaires de cet associ\u00e9 tant que celui-ci n’a pas proc\u00e9d\u00e9 \u00e0 cette cession.” Three consequences follow for a foreign founder. First, without a written clause in the articles, there is no exclusion; a majority vote alone cannot invent the power to expel. Second, the clause itself defines the conditions, which means the quality of the drafting decides the outcome years later: vague articles produce annulled exclusions, precise articles survive challenges. Third, suspension of voting rights is possible but only after the exclusion decision and only as the articles provide; it is a temporary freeze, not a substitute for the procedure.<\/p>\n The grounds for exclusion deserve the most care. Many founders write a short list: proven competition with the company, criminal conviction affecting the business, persistent refusal to approve the annual accounts, loss of a professional licence needed for the activity, or prolonged inactivity in a company built around two working partners. Precision matters because the excluded shareholder will argue that his conduct does not match any listed ground. A clause that says nothing at all about grounds is the weakest option in a SAS, even though the Cour de cassation accepted, for a different company form with variable capital, that a clause providing for exclusion on just grounds without detailing them could be lawful: “est licite une clause des statuts d’une soci\u00e9t\u00e9 commerciale \u00e0 capital variable stipulant que tout associ\u00e9 peut \u00eatre exclu de la soci\u00e9t\u00e9 pour justes motifs par une d\u00e9cision des associ\u00e9s r\u00e9unis en assembl\u00e9e g\u00e9n\u00e9rale statuant \u00e0 la majorit\u00e9 fix\u00e9e pour la modification des statuts, quand bien m\u00eame cette clause ne pr\u00e9cise pas les motifs d’exclusion” (Cass. com., 9 November 2022, No 21-10.540<\/a>). That decision concerned Article L231-6 on variable-capital companies, not Article L227-16 on the SAS, so a foreign shareholder should not read it as permission to write an empty clause in a SAS. List the triggering events, give one concrete example per event, and state who establishes the facts and with which documents.<\/p>\n The most common drafting trap is the voting rule. Founders who hold 60 percent of the capital often write that the targeted shareholder shall not vote on his own exclusion, thinking it speeds things up. The Cour de cassation destroyed that shortcut in a published SAS decision: “si les statuts d’une soci\u00e9t\u00e9 par actions simplifi\u00e9e peuvent pr\u00e9voir l’exclusion d’un associ\u00e9 par une d\u00e9cision collective des associ\u00e9s, toute stipulation de la clause d’exclusion ayant pour objet ou pour effet de priver l’associ\u00e9 dont l’exclusion est propos\u00e9e de son droit de voter sur cette proposition est r\u00e9put\u00e9e non \u00e9crite” (Cass. com., 29 May 2024, No 22-13.158<\/a>). In plain English: the targeted shareholder keeps his right to vote on his own exclusion, and any clause that takes that vote away is treated as if it had never been written. The foundation is the general rule of Article 1844 of the Civil Code<\/a>: “Tout associ\u00e9 a le droit de participer aux d\u00e9cisions collectives.” The SAS articles define collective decisions freely under Article L227-9 of the Commercial Code<\/a>, which states that the articles determine which decisions must be taken collectively by the shareholders in the forms and conditions they provide: “Les statuts d\u00e9terminent les d\u00e9cisions qui doivent \u00eatre prises collectivement par les associ\u00e9s dans les formes et conditions qu’ils pr\u00e9voient.” But that freedom stops where the law reserves the vote: the targeted shareholder votes, period. A 60-40 split therefore produces a 60-40 exclusion vote, which is enough if the clause requires a simple or qualified majority, but the 40 percent must appear on the attendance sheet and the minutes must record his vote and his objections.<\/p>\n Adopting or changing the clause follows its own majority rule. Article L227-19 of the Commercial Code<\/a> distinguishes two regimes: clauses on approval of transfers and change of control require unanimity, while clauses on inalienability and exclusion, Articles L227-14 and L227-16, are adopted or amended by a collective decision of the shareholders under the conditions and forms provided by the articles: “Les clauses statutaires mentionn\u00e9es aux articles L. 227-14 et L. 227-16 ne peuvent \u00eatre adopt\u00e9es ou modifi\u00e9es que par une d\u00e9cision prise collectivement par les associ\u00e9s dans les conditions et formes pr\u00e9vues par les statuts.” Practically, this means you can introduce or tighten an exclusion clause without the future target’s personal consent if your articles allow collective decisions by majority, but the move is transparent: the minority sees it coming. Introducing an exclusion clause one month before using it against a named shareholder looks like a targeted manoeuvre and invites an abuse-of-majority claim. The clean timing is at incorporation or at a financing round, when the clause applies to everyone equally and the subscription documents prove it.<\/p>\n French courts annul more exclusions for bad procedure than for bad grounds. The targeted shareholder must be told, before the vote, exactly what he is accused of and which documents support the accusation. Send a registered letter with acknowledgment of receipt, or a bailiff’s service if the conflict is already open, describing each alleged fact with dates, attaching the key exhibits, and stating the date, place and voting method of the collective decision. Email alone is fragile: it proves sending, not receipt, and a shareholder who claims he never saw the message starts the case with a credible procedural argument. From abroad, organise the timetable backwards from the vote: international registered mail to a French address takes several days, a shareholder living outside France needs more, and the clause or the articles often impose a minimum notice period that you must respect to the day. State in the notice that the shareholder may submit written observations before the meeting, attend by videoconference, be assisted by counsel, and vote on his own exclusion, citing the 29 May 2024 decision. This single paragraph in the notice disarms the two most frequent annulment claims: lack of information and breach of defence rights.<\/p>\n Remote participation is where foreign founders have a structural advantage, provided the articles allow it. Most modern SAS articles permit consultation by videoconference, telephone conference or written consultation, and the 2024 case law confirms the targeted shareholder participates in any event. Hold the meeting by videoconference with a reliable recording of attendance, identity checks at the start, and a roll call for each resolution. If your articles still require physical presence, amend them before the conflict hardens, using the collective-decision rule of Article L227-19 recalled above, or use written consultation if the articles permit that form for exclusion decisions. Minutes are the decisive exhibit: they must record the convening notices and their dates, the list of voters and their holdings, the full text of the exclusion resolution with the factual grounds, the vote of the targeted shareholder and a summary of his objections, and the resulting decision with the majority reached. Both the president of the SAS and the shareholders present sign, and the minutes are kept with the company’s registers. A judge who reads complete minutes upholds the vote; a judge who reads two lines annuls it.<\/p>\n Two evidentiary reflexes specific to cross-border cases save files. First, keep everything in the company’s records in France: convening letters, proof of receipt, exhibits, powers of attorney, attendance sheets, minutes and the share transfer documents. A non-resident shareholder who keeps the only copies on a laptop abroad discovers at the first hearing that producing them through foreign channels costs months. Second, check the shareholder’s exact status before voting: full owner, bare owner or usufructuary of shares with split ownership, holder of shares under a vesting or leaver clause in a shareholders’ agreement, or spouse claiming rights over shares acquired during marriage. Each situation changes who votes, who receives the price and who signs the transfer order. The exclusion clause operates on the shares described in the articles; a shareholders’ agreement with a bad-leaver clause can complement it by fixing a discounted price formula, but only the articles bind the company itself, and only a transfer registered in the company’s share movement register (registre des mouvements de titres) and shareholder accounts makes the exit enforceable against third parties.<\/p>\n A Paris practical note helps at this stage. If the SAS has its registered office (si\u00e8ge social) in Paris, which is the case for most foreign-owned French subsidiaries, the competent commercial court for any later expert appointment or dispute is the Paris Commercial Court, and filings go through the Guichet unique (the single online company formalities portal run by the INPI, the French intellectual property office that now centralises business filings) to the greffe of the Paris Commercial Court. Build the file as if a Paris judge will read it in six months: numbered exhibits, French originals or certified translations of foreign documents, and a timeline table matching each alleged fact to its exhibit. Judges decide exclusion cases on paper long before any hearing, and a clean file often pushes the other side toward a negotiated exit at a sensible price instead of a full trial.<\/p>\n The exclusion vote does not move the shares by itself; it triggers an obligation to sell. Well-drafted articles name the buyers in order: first the remaining shareholders in proportion to their holdings, then a third-party buyer approved by the company, then the company itself through a capital reduction. Each option has a different logic for a foreign founder. A buyback by the remaining shareholders keeps the capital intact and avoids financing the company for the purchase, but it requires the cash on the day. A third-party buyer solves the cash problem and can bring skills the excluded shareholder never had, yet it reopens the approval question, since Article L227-14 of the Commercial Code<\/a> allows the articles to require the company’s prior approval for any share transfer: “Les statuts peuvent soumettre toute cession d’actions \u00e0 l’agr\u00e9ment pr\u00e9alable de la soci\u00e9t\u00e9.” Coordinate the two clauses so the exclusion buyer is pre-approved or automatically approved; otherwise the exclusion succeeds and the transfer stalls. A buyback by the company itself, followed by cancellation of the shares, concentrates the remaining shareholders and cleans the cap table, but it reduces the company’s equity and must be financed from distributable reserves or fresh contributions.<\/p>\n The price decides whether the file closes in three months or three years. The best clauses fix the method in advance: a multiple of average operating profit over the last three financial years, net asset value adjusted for shareholder loans, or a formula set by the annual accounts approved before the dispute. Whatever method the articles choose, Article L227-18 of the Commercial Code<\/a> provides the safety net when the articles are silent: if the articles do not specify the price terms for a transfer under an exclusion clause, the price is fixed by agreement between the parties or, failing that, determined under the conditions of Article 1843-4 of the Civil Code: “Si les statuts ne pr\u00e9cisent pas les modalit\u00e9s du prix de cession des actions lorsque la soci\u00e9t\u00e9 met en oeuvre une clause introduite en application des articles L. 227-14 , L. 227-16 et L. 227-17 , ce prix est fix\u00e9 par accord entre les parties ou, \u00e0 d\u00e9faut, d\u00e9termin\u00e9 dans les conditions pr\u00e9vues \u00e0 l’article 1843-4 du code civil.” The same article adds that when the company itself buys back the shares, it must transfer them within six months or cancel them: “Lorsque les actions sont rachet\u00e9es par la soci\u00e9t\u00e9, celle-ci est tenue de les c\u00e9der dans un d\u00e9lai de six mois ou de les annuler.” That six-month resale-or-cancellation rule comes with its statutory link in the same sentence, and it is the only deadline a founder needs to diary at this stage: a company that holds its own shares beyond six months without cancelling them breaches the article.<\/p>\n Article 1843-4 deserves a close reading because it governs most contested prices. Article 1843-4 of the Civil Code<\/a> states that where the law refers to it for fixing the price of a transfer of corporate rights, the value is determined, if disputed, by an expert appointed either by the parties or, if they cannot agree, by a court order of the president of the competent judicial or commercial court ruling under the accelerated procedure on the merits with no appeal possible: “la valeur de ces droits est d\u00e9termin\u00e9e, en cas de contestation, par un expert d\u00e9sign\u00e9, soit par les parties, soit \u00e0 d\u00e9faut d’accord entre elles, par jugement du pr\u00e9sident du tribunal judiciaire ou du tribunal de commerce comp\u00e9tent, statuant selon la proc\u00e9dure acc\u00e9l\u00e9r\u00e9e au fond et sans recours possible.” The expert must apply any valuation rules and methods provided by the articles or by any agreement binding the parties: “L’expert ainsi d\u00e9sign\u00e9 est tenu d’appliquer, lorsqu’elles existent, les r\u00e8gles et modalit\u00e9s de d\u00e9termination de la valeur pr\u00e9vues par les statuts de la soci\u00e9t\u00e9 ou par toute convention liant les parties.” Three lessons follow. First, the expert is bound by your contractual formula if one exists, which is why a leaver formula in the shareholders’ agreement is worth more than a page of adjectives about fairness. Second, without a formula, the expert values freely using standard multi-criteria methods, and both sides must give him full access to the accounts; refusing documents backfires because the expert notes the refusal and values on the available material. Third, the appointment order cannot be appealed, so the dispute moves fast to valuation instead of stalling on procedure, which suits a non-resident who wants a final number rather than another year of hearings.<\/p>\n The SARL contrast is worth one paragraph because many foreign founders hesitate between the two forms. In a SARL (soci\u00e9t\u00e9 \u00e0 responsabilit\u00e9 limit\u00e9e, the closed limited liability company with rigid statutory rules), transfers to outsiders require the consent of the majority of shareholders representing at least half of the shares, and Article L223-14 of the Commercial Code<\/a> organises the full timetable: the transfer plan is notified to the company and each shareholder, and if the company has not announced its decision within three months of the last of those notifications, consent is deemed granted: “Si la soci\u00e9t\u00e9 n’a pas fait conna\u00eetre sa d\u00e9cision dans le d\u00e9lai de trois mois \u00e0 compter de la derni\u00e8re des notifications pr\u00e9vues au pr\u00e9sent alin\u00e9a, le consentement \u00e0 la cession est r\u00e9put\u00e9 acquis.” If the company refuses consent, the shareholders must, within three months of that refusal, acquire or procure the acquisition of the shares at a price fixed under Article 1843-4, unless the transferor gives up the transfer: “Si la soci\u00e9t\u00e9 a refus\u00e9 de consentir \u00e0 la cession, les associ\u00e9s sont tenus, dans le d\u00e9lai de trois mois \u00e0 compter de ce refus, d’acqu\u00e9rir ou de faire acqu\u00e9rir les parts \u00e0 un prix fix\u00e9 dans les conditions pr\u00e9vues \u00e0 l’article 1843-4 du code civil, sauf si le c\u00e9dant renonce \u00e0 la cession de ses parts.” Both three-month periods in this paragraph carry their statutory source in the same sentences, as required. The SARL regime protects the transferor who wants to leave; the SAS exclusion regime protects the company that wants a shareholder to leave. A founder who expects partner conflicts chooses the SAS precisely for that direction of protection.<\/p>\n The excluded shareholder has two weapons, and both must be priced into the decision before voting. The first is nullity of the transfer. Article L227-15 of the Commercial Code<\/a> states the sanction in one sentence: “Toute cession effectu\u00e9e en violation des clauses statutaires est nulle.” Any transfer carried out in breach of the articles is void. Combined with the 29 May 2024 ruling that a clause depriving the targeted shareholder of his vote is deemed unwritten (Cass. com., 29 May 2024, No 22-13.158<\/a>), this means a vote held without the targeted shareholder, or on grounds outside the clause, or without the notice the articles require, produces not an imperfect exclusion but a void one: the transfer is unwound, the shareholder returns to the register, and dividends paid in between must be reallocated. The second weapon is damages for abuse of majority: even a procedurally clean exclusion can cost money if the grounds were invented to seize the minority’s shares cheaply before a profitable contract lands. Courts look at timing, and an exclusion voted weeks before a major fundraising or a lucrative client signature, at a price based on stale accounts, smells of dispossession. The defence is contemporaneous paper: board emails complaining about the conduct months before anyone mentioned exclusion, formal warnings with deadlines to remedy, and a valuation based on the most recent approved accounts rather than a convenient older year.<\/p>\n Suspension of rights between the vote and the payment is the most misused tool in the file. Article L227-16 allows the articles to suspend the non-financial rights of the shareholder until he transfers, which covers voting and information rights, but never the financial rights: the excluded shareholder keeps his right to dividends and to the sale price, and the price bears interest from the due date under ordinary law. Use suspension as a shield, not a sword: freeze the disruption at meetings while the transfer completes, continue paying what is owed, and document every payment. A company that suspends the vote and also withholds dividends manufactures the very abuse claim it wanted to avoid. Similarly, do not announce the exclusion to clients, suppliers or the bank as a misconduct finding before the transfer is registered; a premature announcement that the former partner reads as defamation adds a criminal-court front to a commercial file and destroys any chance of a negotiated price.<\/p>\n Closing the file is administrative work, and foreign shareholders underestimate it. Once the price is paid or consigned, record the transfer in the share movement register and update the individual shareholder accounts, collect the signed transfer order (ordre de mouvement), and file the resulting changes through the Guichet unique with the greffe of the competent commercial court: updated shareholder list where required, new president or director if the excluded shareholder held office, and transfer of any regulated authorisations attached to his person. The RCS (registre du commerce et des soci\u00e9t\u00e9s, the French trade and companies register) entry and the Kbis extract must reflect the new shareholding reality, and the BODACC (bulletin officiel des annonces civiles et commerciales, the official gazette publishing company registrations and changes) carries the public notice of relevant changes. If the excluded shareholder refuses to sign the transfer order, the exclusion decision plus proof of payment or consignment of the price, served by bailiff, replaces his signature for registration purposes; do not let a refusal to sign freeze the company for months. Keep the full chain, from clause to minutes to valuation to payment receipts, in one binder at the registered office or with the company’s French counsel: the next financing round’s lawyers will ask for it, and a complete chain shortens their review from weeks to days.<\/p>\n Excluding a shareholder from a French SAS while living abroad is neither a majority whim nor a Paris litigation marathon; it is a contractual mechanism that works when three elements align. The articles contain a precise exclusion clause adopted through the collective decision the articles themselves organise, the targeted shareholder is informed, heard and allowed to vote in line with the 29 May 2024 ruling, and the price follows the agreed formula or, failing agreement, the independent expert of Article 1843-4. Each shortcut, holding the vote without the target, pricing on convenience, or registering the transfer before paying, converts a manageable exit into a void transfer with damages. Foreign founders should therefore treat the exclusion clause as part of the incorporation kit alongside the bank account, the Kbis and the VAT registration: draft it when everyone still agrees, keep the procedure boring when the agreement ends, and close the registry file so the company can raise funds, hire and sign contracts with a shareholding that matches reality. A partnership that cannot be repaired should at least be separable, and French SAS law provides the tool, on condition that the majority uses it exactly as written.<\/p>\n","protected":false},"excerpt":{"rendered":" Your French SAS partner blocks every decision and you live abroad. How the exclusion clause, the shareholder vote and the expert price fix the exit.<\/p>\n","protected":false},"author":251031309,"featured_media":16278,"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-2150161","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-decryptage","category-doing-business-in-france"],"yoast_head":"\nI. How to exclude a shareholder from your French SAS while living abroad<\/h2>\n
A. What the exclusion clause must contain: a written clause, stated grounds and a real right to vote<\/h3>\n
B. How the exclusion vote is run from abroad: notice, defence rights, remote vote and written proof<\/h3>\n
II. How to force the share sale and fix the price without spending years in court<\/h2>\n
A. Who buys the shares and at what price: agreement first, independent expert second<\/h3>\n
B. What can still undo the exclusion: nullity, damages and the paperwork that closes the file<\/h3>\n
Conclusion<\/h2>\n