Shareholders' Agreement vs Bylaws in a French SAS: What Goes Where

Bylaws or shareholders' agreement: allocating the clauses of a French SAS

A French SAS runs on two parallel instruments — the bylaws (statuts) and the shareholders' agreement (pacte d'associés). They serve different purposes, bind different populations and are enforced by different sanctions: a share transfer violating a bylaws clause is void (C. com. Art. L 227-15), while a pacte breach classically yields damages between signatories. Getting each clause into the right document is therefore not a formality — it decides whether a hold-out founder can be forced to sell, whether a rogue transfer sticks, and whether sensitive terms sit in a public file.

This guide covers what each instrument does, the structural sanction only the bylaws deliver, what the pacte does better, the clause-by-clause allocation matrix, the enforcement mechanics on each side — including the bridge technique that lends a pacte clause the bylaws' sanction — and how the two instruments interact at investor rounds and exits. For the underlying clauses themselves, see our guides to negotiating SAS bylaws and to shareholder decisions.

The two instruments and who they bind

The bylaws are the company's foundational document: signed at incorporation, filed at the registry, amended by collective decision at the majorities they set (with unanimity for the protected clauses of Art. L 227-19, al. 1). They bind the company, every shareholder — including those who join later by any route — the officers, and they are opposable in the ways the law organises. They are also public: anyone can obtain them.

The pacte is a contract among some or all shareholders (the company itself sometimes intervening): unfiled, confidential, amended by the signatories' agreement alone, and binding only its signatories — a buyer of shares is outside it unless made to accede, which well-drafted pactes require as a condition of any transfer. It is inopposable to the company where the company is not party.

Three boundary rules structure the relationship. The pacte cannot derogate from the bylaws: a CEO removed without cause could not claim an indemnity promised in a side letter, because the bylaws excluded indemnities — extra-statutory instruments can complete the bylaws, not contradict them (Cass. com. 12 October 2022, n° 21-15382). Corporate organs live only in the bylaws: a board created in a pacte is not a corporate organ, and seats disappear when the bylaws stop providing for them (Cass. com. 25 January 2017, n° 14-28792). And breaching the pacte does not undo corporate decisions: a president removed by the shareholders in breach of a pacte clause allocating removal to another body stays removed — the breach is a contractual fault toward the signatories, damages the remedy (Cass. com. 18 September 2024, n° 22-23075).

What only the bylaws deliver: the L 227-15 sanction

Any share transfer made in violation of the SAS's bylaws clauses is void (C. com. Art. L 227-15). The sanction covers the family of statutory transfer controls: the approval clause (agrément, Art. L 227-14), the temporary inalienability clause (Art. L 227-13 — up to ten years), and statutory pre-emption clauses, whose violation voids even a sale between two shareholders. The nullity is absolute in nature, but its invocation is policed: an acquirer evicted by a statutory pre-emption cannot demand annulment, being a stranger to the protection (Cass. com. 2 February 2016, n° 14-20747), and case law from other company forms reserving the action to the shareholders whose consent was required may transpose to the SAS. In practice the sanction also works preventively — the company refuses to register the non-compliant transfer, and the transferee never enters the cap table; the court settles any dispute about it.

The same statutory family enjoys a second layer of protection: adopting or modifying the inalienability clause and the change-of-control clause set (Art. L 227-17) requires unanimity (Art. L 227-19, al. 1), a decision without it being void. The agrément clause left the unanimity rule with Ord. 2017-747 of 4 May 2017, and the exclusion clause with Loi 2019-744 — both are now adopted and modified at the bylaws-set majority — but the practical advice is unchanged: install the full clause set at incorporation, while the founding table is aligned, rather than negotiating amendments against a fuller cap table.

Two developments enrich the classic picture. The bridge technique: where a bylaws clause refers to the pacte — the statuts recording that the signatories commit not to transfer the shares covered by a pacte promise — a transfer breaching the pacte-defined restriction violates a statutory clause, and the L 227-15 nullity follows: a cession made during a ten-year pacte promise, locked by such a statutory echo, was annulled (Cass. com. 27 June 2018, n° 16-14097). And the 2025 reform: since 1 October 2025, the bylaws can expressly provide that decisions taken in violation of their rules are void (C. com. Art. L 227-20-1, from Ord. 2025-229) — a faculty that further widens the enforcement gap between the two instruments, to be used clause-by-clause rather than wholesale.

What the shareholders' agreement does better

Privacy. Valuation formulas, put and call strikes, named nominees, milestone mechanics — the pacte keeps them out of the public file the bylaws would expose.

Tailoring and bilateralism. A pacte can bind two shareholders on terms that concern only them — a specific buy-out, a bilateral lock-up — where the bylaws bind the whole table. Structures often run one multilateral pacte plus bilateral side pactes; the bylaws stay singular.

Light amendment. Signatories sign an amendment; no collective decision, no filing, no publicity. Detailed mechanics that will evolve — information packs, reporting cadences, waterfall spreadsheets — belong where amendment is cheap.

Personal undertakings. Founder vesting, non-compete and non-solicitation covenants, time-commitment and exclusivity clauses, confidentiality — commitments of identified people, contractually enforced.

Voting agreements — within limits. Signatories can agree in advance how to vote on defined questions: lawful, but bounded by the case-law framework — limited duration (perpetual commitments are prohibited, C. civ. Art. 1210), no harm to the corporate interest (reviewed after the fact), and no irrevocable surrender of the vote, which remains a fundamental shareholder right. They bind only signatories, are inopposable to the company, and their breach yields damages.

The cost of all this flexibility is the enforcement profile: a pacte breach classically leaves the act standing and converts the protection into a damages claim — often hard to quantify. That trade is exactly what the allocation exercise manages.

Where does your clause belong?

Pick the clause you are negotiating and see the standard home — and the trade behind it.

The allocation matrix, clause by clause

The matrix is a starting point, not a rule of law — priorities move clauses. A structure that values confidentiality over structural force can keep pre-emption pacte-side and accept the damages-only remedy; the bridge technique (a statutory clause echoing the pacte restriction) can recover the nullity where wanted. What never works is contradiction: where the two instruments collide, the bylaws prevail.

Enforcement: what each breach actually produces

Bylaws breach — the act falls. A transfer violating a statutory transfer clause is void (C. com. Art. L 227-15): the transferee never becomes a shareholder, the register stays clean, and the cap table reverts if the transfer was recorded. The company refuses registration in practice; the court confirms where disputed, with standing to invoke the nullity reserved to those the clause protects. Breaches of other bylaws rules run through the ordinary machinery — officer liability, decision annulment within the nullity regime's filters (from 1 October 2025, grievance, influence and proportionality under Ord. 2025-229, plus any express bylaws-nullity clause under Art. L 227-20-1).

Pacte breach — the act stands, money moves. Damages between signatories are the classic remedy, with all their quantification problems: what is a lost pre-emption worth? Specific performance and injunctions can be available where money is inadequate, and drafting reinforces the position — penalty clauses (liquidated amounts that spare the proof of loss), share pledges and escrows, promesses whose unilateral revocation is ineffective (C. civ. Art. 1193: a fixed-term promise cannot be revoked by the promisor). But the structural limits stay: the company is untouched unless it signed, and corporate decisions taken in breach of the pacte stand (Cass. com. 18 September 2024).

The two flagship scenarios. A drag-along only in the pacte leaves a refusing minority in place — damages against the hold-out, exit at risk; the statutory version forces the transfer through the company's own rules, the nullity sanction policing any non-compliant path. A change-of-control trigger only in the pacte yields a disclosure claim; the statutory clause (Art. L 227-17) arms the company itself — information duty, bylaws-organised voting suspension and exclusion of the corporate shareholder whose control changed. Where the strongest protection matters, the trigger belongs in the statuts.

And the bridge, for hybrid designs. A statutory clause referring to the pacte's restriction imports the structural sanction: the Cour de cassation annulled a transfer made in breach of a ten-year pacte promise because the bylaws recorded the signatories' commitment not to sell the promised shares (Cass. com. 27 June 2018, n° 16-14097). The technique keeps the detail confidential in the pacte while the statuts carry the nullity — drafted carefully, it is the best of both instruments.

The two instruments at investor rounds and at exit

At a round, three documents move together: the subscription agreement (round-specific terms, representations, conditions), the bylaws amendments (the new preference class and its rights, adjustments to the transfer clauses — remembering the unanimity rule for the L 227-13/L 227-17 set and the majority regime for agrément and exclusion), and the new or restated pacte (information rights, nomination and observer arrangements, vesting, options, exit mechanics), signed by founders, existing holders and the incoming investor. The accession clause keeps the pacte's population synchronised with the cap table — any transferee must sign on as a condition of the transfer, or the pacte erodes as shares move.

At a sale, the bylaws' drag-along forces the table to follow the accepted offer while the pacte's mechanics run the process — notices, valuation, escrow, indemnity allocation; the acquisition agreement then reallocates risk, the pacte is typically terminated at closing, and the bylaws are cleaned of investor-era machinery. At an IPO, the clean-up is deeper: classes consolidated, transfer restrictions dismantled (listed-company rules tolerate few), governance moved to the public-company model, and the pacte wound up or replaced by narrow lock-up undertakings. Anticipating the exit at the drafting stage — which clauses will need unanimity to remove, which terminate automatically — is part of the original allocation exercise.

Something was breached — what can you actually get?

Pick the scenario and see the remedy each instrument delivers.

Frequently asked questions about the pacte d'associés vs the bylaws

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 advice. The right allocation between bylaws and pacte depends on the clauses, the parties' priorities, and the company's trajectory. Always seek qualified legal advice before designing or amending the governing documents of a French company.