Drafting Your French SCI Statuts: The Clauses That Decide Who Controls What

Drafting your French SCI statuts: the clauses that decide who controls what

The articles (statuts) of a French SCI (société civile immobilière) are where control is allocated. The civil company gives its founders wide latitude, and on most questions the Civil Code applies only "unless the articles provide otherwise" - so what the articles say, rather than the default law, decides who manages, who votes, who can join, and who can leave. Left to the default, an SCI runs on unanimity, which is often unworkable; drafted deliberately, it can concentrate control where the founders want it while protecting the interests that need protecting. This guide sets out the clauses that carry the most weight, and what each decides.

These clauses carry the most weight in a family SCI, where the same clauses that organise day-to-day management also organise transmission - a parent who gives away most of the shares can keep control of the company through the drafting, and a survivor can be protected through it. The clauses below each carry real weight, and the way each is set changes who holds power in the company for its whole life.

The manager's powers: the first control clause

The single most important drafting choice is the definition of the manager's powers, because the SCI is run by its manager and the articles are free to set the extent of those powers. Two levels have to be kept apart. Towards third parties, the manager binds the company for any act falling within its corporate object (C. civ. Art. 1849), and limits placed on the manager's powers in the articles are unenforceable against a third party who dealt with the manager in good faith - so the object clause, which frames what the manager can do externally, has to be drafted with care. Internally, between the manager and the shareholders, the articles can restrain the manager as tightly or as loosely as the founders wish.

The internal limitation is where control is calibrated. The founders can leave the manager broad powers of administration, or they can subject specific decisions - above all the sale of a property - to the prior consent of the shareholders, often by a reinforced or unanimous majority. Because selling the company's building empties it of its substance, the articles frequently reserve that decision to a collective vote even where the manager otherwise has wide powers. The manager can be given powers close to those of an agent of an undivided co-ownership, or powers approaching those of an owner; the articles decide how much power the manager holds. For a family SCI, the manager is usually a parent, and the drafting is used to give that parent operational control while reserving the structural decisions to the shareholders.

Choosing the manager, and how the office passes

The articles also fix who the manager is and how the office passes. They can impose selection criteria - a required age, a requirement that the manager be a shareholder or, conversely, that the manager be a legal person - and, in a family SCI drawn from several branches, they can organise a rotating management, with the manager chosen in turn from within each group, or a management board with members drawn from each branch. A clause can pass the office automatically to a chosen successor on the manager's death, a designation that binds the deceased's heirs. And where the manager is given a power to sell part of the company's property, the articles should still keep the sale of an asset that would empty the company under a collective decision, because such a sale changes the company's substance and amounts to a change of its object. Manager selection, succession and the reach of the manager's power to dispose are drafting choices as much as the powers themselves.

Decision rules and majorities: who can pass what

The second control clause is the set of rules for collective decisions. In the silence of the articles, decisions exceeding the manager's powers are taken by unanimity (C. civ. Art. 1852) - a rule that gives every shareholder a veto and, in practice, paralyses a company of any size. The articles can and usually should replace it with workable majorities, and here the drafting has real freedom: simple majority, qualified majority, quorum requirements, and the number of votes attaching to each shareholder can all be set.

The way the majorities are set is what allocates control. A reinforced majority for important decisions can be calibrated on the number of votes held by a minority shareholder who needs protecting, giving them the power to block a measure that would harm them. A casting vote can be given to the head of the family in the event of a tie. Multiple-vote shares can be created, attaching two or three votes to certain shares, so that a shareholder with a minority of the capital can hold a majority of the votes - the majority is then computed on the votes the shares carry, not on their number. And the removal of a manager can be made to require a majority calculated so that it cannot pass without the manager's own votes, making a parent-manager effectively irremovable short of a court decision. These are the levers through which a founder who has given away most of the shares keeps control of the company.

Which control clause matters most for you?

Pick what you most want the articles to achieve - the check shows the clause that does it.

The approval clause: controlling who joins the company

The third control clause is the approval clause (agrément), which governs who can become a shareholder. In the silence of the articles, the transfer of shares to a third party requires the agreement of all the shareholders (C. civ. Art. 1861) - a rule that looks strongly protective but whose unanimity is often hard to obtain, even where the transfer is unobjectionable. The articles can replace it with a tailored procedure that keeps control of entry while keeping the company workable.

The drafting freedom here is wide. The articles can dispense with approval for transfers between existing shareholders, or to the spouse of a shareholder, while subjecting transfers to outsiders - or even to the founders' own descendants - to approval. Where approval is required, the articles decide who grants it, the manager or the shareholders, and on what majority. And crucially, the approval rules for a transfer for value can differ from those for a transmission on death or by gift: a family SCI often exempts lifetime gifts to children while controlling sales to outsiders, or the reverse. The approval clause is the instrument through which the founders decide, in advance and on their own terms, who will and will not be admitted to the company - the counterpart, on the entry side, to the withdrawal clause on the exit side.

Usufruct voting and the tontine clause: two specialist clauses

Two further clauses deserve their own treatment, because they are where family and estate planning enter the articles.

Usufruct voting. Where the shares are, or will be, split between usufruct and bare ownership - the standard transmission structure, in which parents give the bare ownership and keep the usufruct - the articles must organise how the usufructuary and the bare owner vote. The default divides the vote between them, but the articles can adapt it in view of the company's objectives, and in a family SCI the usufructuary parents' voting rights are usually widened beyond the usual clauses so they can control the important decisions. There is a limit the drafting cannot cross: both the usufructuary and the bare owner always keep the right to participate in collective decisions (C. civ. Art. 1844), whatever the articles say. Within that limit, the allocation of the vote between the two is a drafting choice that decides who really controls a dismembered SCI.

The tontine clause. A survivorship or accretion clause (clause de tontine) can be written into the articles, so that on the death of a shareholder their covered shares are deemed to have belonged to the survivor from the outset - used above all by unmarried and civil-partnership couples to protect the survivor. One drafting point is essential: where it is inserted into the company contract, the clause must be provided for at the formation of the company. A tontine agreed some years after the shares were acquired has been treated as an ordinary lifetime gift rather than a valid survivorship pact, so the clause belongs in the original articles, not in a later amendment. Its interaction with the usufruct structure and with the family's objectives should be worked through before it is used.

The clauses the articles must contain

Alongside the control clauses, the articles must record the statements the law requires, and getting these right is what keeps the incorporation valid. Under Article 1835 of the Civil Code, the articles must state the contributions of each shareholder, the form, the object, the name, the registered office, the capital, the duration, and the operating rules. The operating-rules heading is the widest, and it is where the control clauses above are housed - the powers of the manager towards third parties (C. civ. Art. 1849), the right of each shareholder to take part in collective decisions (C. civ. Art. 1844) and to obtain the company's books and documents at least once a year (C. civ. Art. 1855), the manager's duty to account at least once a year (C. civ. Art. 1856), the shareholders' rights in the capital in proportion to their contributions (C. civ. Art. 1843-2), their liability to third parties in proportion to their shares (C. civ. Art. 1857), the prohibition on increasing a shareholder's commitments without their consent (C. civ. Art. 1836), and the allocation of profits and losses in proportion to each shareholder's share (C. civ. Art. 1844-1).

If the articles omit a required statement, any interested person, and the public prosecutor, can ask the court to order the incorporation regularised, an action that lapses three years after registration (C. civ. Art. 1839). The mandatory statements are the frame; the control clauses are the content that makes the company fit its purpose. A well-drafted SCI has both - the required statements correctly recorded, and the manager, majority, approval, withdrawal, usufruct and, where used, tontine clauses set deliberately to allocate control the way the founders intend.

Default rules or drafted clauses: what happens if you leave the articles silent?

Pick the decision you are unsure about - the check shows what the default law does, and what drafting can change.

The SCI control clauses at a glance

Frequently asked questions about drafting SCI statuts

This article is for general information only and states French law as published in the sources available at the date shown above. It does not constitute legal or tax advice. The right clauses for an SCI depend on the shareholders, the control objectives and the transmission plan. Always seek qualified legal advice before drafting the articles of an SCI.