∼20
Articles of the French commercial code specifically dedicated to the SAS — everything else is left to the articles, with no statutory fallback
Void
The legal effect of a SAS article silent on a material governance question — not a default rule, a gap that courts cannot fill by analogy
10 years
Maximum duration of an inalienability clause under French law (Art. L 227-13) — beyond which the clause is invalid however carefully worded

Why the bylaws of a SAS are important

The bylaws of a SAS allow for a remarkable degree of contractual freedom. The French Commercial Code contains a very limited number of provisions devoted specifically to SAS. Beyond that narrow framework, and subject to a limited set of mandatory rules, the SAS is governed by whatever its articles provide. This is very different from a SARL, where the law itself sets most of the rules governing the functioning of the company, such as majority required to appoint the manager, the thresholds governing shareholders decisions, the procedure for approving share transfers — leaving the bylaws to do little more than restate those statutory requirements. A SARL drafted in summary terms remains fully functional, because the Commercial Code supplies what the articles leave out. A SAS drafted in the same way does not: gaps in the articles routinely surface later as shareholder disputes.

SAS articles must therefore contemplate the full life of the company. Founder disagreements, management changes, the entry of external investors, shareholder exits, deadlock, death or incapacity, and dissolution, each need an answer within the bylaws themselves. The Commercial Code will not necessarily supply one.

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The Core Risk: Silence Creates Legal Voids

In a SARL, contract gaps are filled by general principles, implied terms and the statutory defaults set by French law. The SAS offers very few such defaults. Where the articles are silent on a governance question, there is often genuinely no answer, which frequently leads to litigation. The appropriate response is not to hope the situation never arises, but to draft the articles as if every scenario will.

Risk 1 — The Bylaws Do Not Provide For a Presidential Removal Procedure (Art. L 227-6 of the French Commercial Code)

The law does not provide a removal mechanism for the SAS president. Article L 227-6 says the president is appointed according to conditions defined in the articles — it says nothing about removal. A SAS whose articles appoint a president but say nothing about how the president can be removed has, in effect, an irremovable president until the general principles of civil contract law are invoked — a route that is slow, uncertain and damaging to the company's standing. The articles must answer: who can initiate removal; what collective decision is required and at what majority; is cause required; what constitutes just cause; what happens to compensation; and when does removal take effect. These questions have no statutory answers. Presidential removal is one of the most litigated areas of SAS governance — precisely because absent clear contractual rules, parties argue over general civil law principles not designed for this context.

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The Over-Copied SA Clause Trap

Many founders import SA-style provisions into SAS articles without adaptation — including removal clauses that reference the board of directors or statutory conditions that apply only to SAs. These transposed provisions are legally inoperative in the SAS context and may create confusion about what the parties actually intended. SAS articles must be drafted for each specific SAS, in light of the strategy and aim of the company and its shareholders, and not borrowed from the articles of other corporate forms. 

Risk 2 — The Bylaws Contain an Incomplete Collective Decisions List (Art. L 227-9 of the French Commercial Code)

The articles of association of the SAS must identify which decisions require collective shareholder action and specify the forms and conditions: what form of consultation is required (assembly, written consultation, or deed); what quorum if any applies; and what majority is needed to pass. These omissions become critical when the company is under stress and shareholders disagree about whether a decision was validly taken.

For two equal shareholders: the articles must provide a deadlock resolution mechanism — alternating presidencies, tie-breaking mechanisms, referral to mediation or arbitration, or defined exit rights triggered by sustained deadlock. A 50/50 SAS with no such mechanism has no internal remedy when the shareholders disagree. Courts are reluctant to intervene in corporate deadlocks without specific legal grounds, and general civil law dissolution for mésentente is available but slow and uncertain.

Risk 3 — The Bylaws Are Vague or Incomplete On Share Transfer Restrictions (Arts. L 227-13, L 227-15 of the French Commercial Code)

Any transfer of SAS shares made in violation of the articles is null and void (Art. L 227-15 of the French Commercial Code) — making transfer restriction clauses genuinely powerful but dependent entirely on precision. An approval clause without a time limit, designated approval authority, price determination mechanism on refusal, and substitute buyer or company buyback obligation traps both the selling shareholder and the company. The inalienability ceiling is 10 years (Art. L 227-13) — a "permanent" clause or one tied to an event that might never occur is void beyond 10 years. A change-of-control clause is essential: without it, a corporate shareholder can exit by selling its parent company upstream, bypassing all direct share transfer restrictions.

High frequency risk
Silence on How to Remove President
No presidential removal mechanism defined. Result: contested removal becomes litigation. The president remains in post pending court proceedings; the company is paralysed and continues to be bound by the president's acts against third parties throughout.
High frequency risk
50/50 Deadlock With No Exit
50/50 shareholding with no tie-breaking or exit mechanism. Result: neither shareholder can force a decision; neither can exit cleanly. The company stagnates until someone capitulates or a court dissolves for mésentente — a slow, expensive, and uncertain route.
Medium frequency risk
Incomplete Approval Clause
Approval clause without time limits, valuation mechanism, or substitute buyer obligation. Result: exiting shareholder is trapped; parties argue indefinitely about procedure. Courts can intervene where approval is used abusively, but this is uncertain and slow.
Medium frequency risk
No Change-of-Control Trigger
Transfer restrictions cover direct share sales but not indirect exits via upstream corporate transactions. Result: a corporate shareholder exits by selling its parent company, bypassing all article-level restrictions entirely. Only a change-of-control clause closes this gap.

Risk 4 — The Bylaws Contain No Preamble or Statement of Purpose

The articles can include a preamble setting out the founders' objectives and the company's purpose. The preamble has the same legal force as the articles themselves and provides an interpretive key for resolving ambiguous provisions or gaps. In disputes, arbitrators and judges can draw on it to reconstruct the founders' common intention — for example, in an exclusion dispute, a clear preamble stating the SAS was formed as a cooperation between companies of a specific sector can support an exclusion argument even where the exclusion clause itself is imprecisely drafted. Founders who skip the preamble deprive themselves of context that can make a real difference if a dispute arises later.

Risk 5 — The Bylaws Provide For a Variable Capital Without a Floor (Arts. L 231-1 to L 231-5)

A variable capital clause must specify both the ceiling capital (maximum authorised) and the floor capital (minimum below which capital cannot fall through withdrawals — at least one-tenth of stated capital). A clause specifying a ceiling but omitting the floor is defective; a clause omitting the maximum authorised capital is void as a matter of case law, and any capital increase purporting to rely on it is null. The articles must also address: whether new shareholder admission requires a collective decision or the president can act alone within the ceiling; the withdrawal procedure; and the price at which a withdrawing shareholder recovers their contribution.

Risk 6 — The Bylaws Do Not Adequately Address Industry (Work) Contributions (Art. L 227-1 al. 4 of the French Commercial Code)

A SAS with industry contributors must address in the articles what happens if that contribution is not or cannot be delivered. Industry shares are inalienable and disappear upon death or departure — but if services cease and the articles do not provide a mechanism for addressing this, the company can find itself with a shareholder who contributes nothing but still holds voting rights and profit entitlement. The articles should specify: the nature and scope of the promised contribution; whether exclusivity is required; how performance is assessed; what triggers a right of withdrawal or exclusion on cessation; how the value of any remaining undelivered contribution is calculated for share redemption purposes; and whether the contribution is personal (it typically is, given the inalienability rule) or capable of performance through a substitute.

Risk 7 — The Bylaws Do Not Adequately Address the Sanction of Their Violation (Art. L 227-20-1 of the French Commercial Code)

Before October 2025, the Cour de cassation allowed nullity of decisions taken in violation of SAS articles only in specific circumstances — principally where the violated rule required a collective shareholder decision and the violation could have influenced the result. This made it difficult to challenge procedurally irregular decisions. From 1 October 2025, ordonnance 2025-229 introduced Art. L 227-20-1 allowing SAS articles to expressly provide that decisions taken in violation of the rules the articles establish are null and void. Without such a clause, the pre-existing restrictive approach continues to apply. Any SAS articles drafted or reviewed after October 2025 should include a carefully worded nullity clause covering the governance violations the founders consider most consequential.

Articles and Shareholders' Agreement: Getting the Architecture Right

Anything that needs to be enforceable against all shareholders — present and future, regardless of whether they signed the original agreement — must appear in the articles. A transfer restriction buried in a shareholders' agreement is contractually binding between signatories but cannot be invoked against a third-party buyer without notice of it. Conversely, commercially sensitive provisions — earn-out formulas, competitive restraints, pricing arrangements, investor ratchets — are better placed in a shareholders' agreement where they remain confidential. The two documents must be consistent: contradictions create uncertainty about which governs. Founders must also address what happens to the shareholders' agreement if the articles are subsequently amended or a new investor joins.

Drafting Risk Checklist: What Every SAS Needs and Most Skip
  • Presidential removal (Art. L 227-6 the French Commercial Code): who initiates, what majority, cause or no cause, compensation terms, effective date — none of this exists by statute. The single most common and consequential drafting failure in SAS articles.
  • Deadlock resolution for equal shareholdings: alternating presidency, tie-breaking vote, mediation/arbitration obligation, or defined exit trigger. A 50/50 SAS without a deadlock resolution clause often leads to litigation.
  • Collective decision architecture (Art. L 227-9 of the French Commercial Code): for every decision category, specify form (assembly/written/deed), quorum, and required majority. A reference to "majority vote" without further specification does not constitute a workable governance rule.
  • Transfer restrictions (Arts. L 227-13, L 227-15 the French Commercial Code): approval clause with time limits, designated authority, price determination on refusal, and substitute buyer/company buyback obligation. Inalienability: duration stated, within 10-year ceiling, proportionate. Change-of-control clause: treats upstream corporate change as equivalent to direct transfer.
  • Special provisions: preamble (interpretive key for future disputes); variable capital (ceiling and floor both stated, floor at least one-tenth of stated capital, admission and withdrawal procedure defined); industry contributions (scope, duration, exclusivity, performance assessment, exit mechanism on cessation, redemption value).
  • Post-October 2025 nullity clause (Art. L 227-20-1 the French Commercial Code): expressly provides that decisions taken in violation of the articles' governance rules are null and void. Without this clause, the pre-existing restrictive approach to nullity continues to apply. Include in any articles drafted or reviewed after October 2025. Verify no contradiction between articles and any parallel shareholders' agreement.
Existing SAS Articles That Need a Review?

Most SAS governance crises are not caused by unusual events — they are caused by ordinary events (a disagreement, an exit, a new investor) which have not been (properly) addressed by the SAS articles. A professional review of SAS articles can identify gaps before they become disputes. We review and redraft SAS articles for founders, investors, and groups across all sectors.

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This article is for general information only. It does not constitute legal advice. SAS governance disputes are highly fact-specific. Contact our French Corporate Lawyers for qualified legal advice before relying on any provision of your articles or taking any step in a shareholder dispute.