In French law, a self-dealing agreement is called a convention réglementée. It is an agreement between the company and one of its directors or a shareholder with a shareholding above a certain threshold. A self-dealing agreement needs to be approved by the relevant decision-making body of the company.
Can a company refuse to perform a contract because a director has exceeded his or her powers?
A company will be bound by the actions of its CEO in regard to third parties, notwithstanding the fact that the director has acted ultra vires or in excess of his or her powers.
The current CEO of our French subsidiary is not performing well how can we terminate the CEOs role?
The first question is to determine what type of company the CEO works for. Certain positions in certain types of companies can be removed at will without the need to give reasons; such is the case of the President and members of the board of directors of société anonyme (SA). On the other hand in certain other types of companies, for example a SARL, justifiable grounds need to be given for the removal of the CEO and failure to provide justifiable grounds could give rise to a claim for damages. In principle the termination in all cases will be without notice and will take immediate effect. Sometimes difficulties of a formal or procedural nature can arise particularly in companies in which the CEO has the sole right to call meetings of shareholders; it may then be necessary to circumvent the CEO in order to call a meeting at which the CEO will be removed.
Can a director be removed at any time under French company law?
The answer depends on the type of director. The president of a board of directors of a société anonyme can be removed at any time without notice. However, in the case of a managing-director (director general) or a Gérant, justifiable grounds for the termination are required. It is important to note however that in principle the director will not, in France, have a contract of employment with the company; thus the rules on the termination of a contract of employment would not apply.
What are the rights of minority shareholders?
The minority shareholder has a right to information about the company accounts. It can put questions to the director or board of directors. Subject to certain thresholds in terms of shareholdings, they can seek the appointment by a court to undertake an expert report on the management.
What is a blocking minority in French company law?
In principle, with the exception of certain SAS companies, in which voting rights and shareholdings can be uncoupled, shareholdings give rise to proportionate voting rights. Whether a shareholder has a blocking minority will depend on the type of decision and the majority required to adopt that decision. If a simple majority is required, a minority shareholder would be unlikely to be able to block a decision. However, in cases where a qualified majority of two-thirds or three-quarters is required, a shareholder with a 34% shareholding or a 26% shareholding could prevent a decision being adopted.
What are regulated activities in French law?
There are certain areas such as the medical or legal professions which require specific qualifications and admission. However, there are many other regulated activities which require certain authorisations, qualifications or financial guarantees (travel agents, estate agents, transportation…)
How does one choose a company name in France?
Two sets of verifications should be undertaken: to check on existing identical or similar existing company names; and to examine existing identical or similar trade-marks.
Which company type should be chosen? In French law, there are several types of company (SA, SARL, SCA, SAS etc.) each with their own legal framework and rules. There is no one type of company which outclasses all the rest. The choice of the type of company should be adapted to the particular requirements in each case.
What happens if the company isn’t registered? If a company is not registered, it will not acquire legal personality and exist as a distinct legal person from its shareholders. Nevertheless, absent registration a company can exist de facto and create unlimited liability on the part of its members.
Is it lawful to have a company with one euro as share capital?
In a SAS or SARL, there is no legal minimum share capital. However, in practice the share capital can serve as a source of own equity to fund the company’s business development. The share capital also provides assurance to banks, suppliers and customers.
Do model articles of association exist in French law?
Unlike English law, French law only has one model set of articles of association approved by government regulation for a single shareholder limited liability company (EURL) in which the single shareholder has the role of director. Although there are a wide range of unofficial model articles of association accessible on the internet, it is strongly recommended that legal advice should be sought when drafting articles of association. Particular attention should be given to questions such as the corporate purpose, shareholdings, the date of the end of the financial year, the mechanisms for calling meetings and powers of the directors.