A shareholder agreement, known in French as a pacte d’associé or pacte d’actionnaire, is an agreement between some or all of the shareholders which is in addition to the articles of association. It contains right and duties of the shareholders which are only binding between the signatories. The contents are frequently undertakings as to how the company is to be managed or promises to sell if certain events occur. The shareholder agreement is not disclosed to the public.

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.

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 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.

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.

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.

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.

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…)