The Gérant of a French SCI

The gérant of a French SCI: appointment, powers, and removal

Every SCI (société civile immobilière) is run by one or more managers - the gérant - and how the gérant is appointed, what the gérant can do, and how the gérant can be removed are the questions that decide who really controls the company. The rules sit in Articles 1846 to 1851 of the Civil Code and are designed above all to protect the third parties who deal with the company, which is why the gérant's power towards the outside world is set by the company's object and cannot be cut down by private limits. This guide sets out who can be a gérant and how they are appointed, the powers the gérant holds and their limits, how the gérant can be removed and on what terms, and how co-management and the drafting of the gérance clause let a founder keep control of an SCI.

The subject matters because the gérant is where the control of an SCI is exercised day to day, and because the drafting of the gérance clause is what separates a company a founder controls from one they do not. A parent who wants to give shares to children while keeping the running of the property in their own hands, an investor who wants a co-owner unable to act alone, a family that wants a manager who cannot easily be removed - all of these are achieved, or lost, in how the gérant is appointed and empowered. Understanding the default rules is the first step to changing them where they do not serve the company's purpose.

Appointing the gérant: who can serve and how

The members must expressly appoint one or more gérants, and the gérant is chosen among the members or from outside them (C. civ. Art. 1846). There is wide freedom here, and the drafting of the articles plays a central role: the gérant can be named in the articles themselves or by a separate act or collective decision, and the articles can shape the appointment as the founders wish, subject to the general law. The appointment, like the later cessation of functions, must be published (C. civ. Art. 1846-2), so that third parties can know who is entitled to act for the company.

Who can serve is generously defined, which suits an international clientele. The foreign nationality of the gérant is no obstacle to their exercising the function in an SCI - a non-resident or foreign owner can be the manager of their own French SCI. A legal person can also be a gérant: where a company is appointed manager, the directors of that managing company are subject to the same conditions and obligations and incur the same civil and criminal liability as if they were gérants in their own name, and there is no obligation - unlike in a public company - to designate a permanent representative, though a director who delegates the role to a third party remains personally responsible (C. civ. Art. 1847). There is no statutory age limit unless the articles set one, and spouses, PACS partners or cohabiting partners can each be members and share in the management. On taking office the gérant accepts their functions, and for the registration formalities makes a declaration on their honour that they are under no criminal conviction or civil or administrative sanction preventing them from managing a legal person.

Two default rules on duration and vacancy are worth knowing. In the silence of the articles, and unless decided otherwise on appointment, the gérants are deemed appointed for the life of the company (C. civ. Art. 1846, paragraph 4) - so a gérant not given a fixed term stays in office until the company ends, removal aside. And if the company finds itself without a gérant, any member can convene the members or, failing that, ask the president of the court to appoint an agent to convene them to name one or more gérants (C. civ. Art. 1846, paragraph 5), so a vacancy in the management can always be cured. These defaults can all be varied in the articles, and deciding whether to do so - a fixed term, an age limit, a named successor - is part of designing the gérance.

The gérant's powers: the object is the real limit

The gérant's powers work on two levels, and the difference between them is the key to the whole subject. Internally - in the relationship with the members - the gérant can, in the silence of the articles, carry out all the acts of management necessary in the company's interest (C. civ. Art. 1848, paragraph 1), and the members are free to fix the extent of those powers in the articles, limiting them in matters such as borrowing, the disposal of the company's assets, or a change of the company's tax regime. So internally the gérant does what the articles allow, and a well-drafted SCI sets those internal limits deliberately.

Externally - towards third parties - the position is different and stricter. The gérant binds the company by acts falling within the company's object (C. civ. Art. 1849, paragraph 1), and clauses limiting the gérant's powers within the object are unenforceable against third parties, even where the third party knew of them (C. civ. Art. 1849, paragraph 3). The consequence is decisive: it is the object of the company that delimits the gérant's capacity to contract with the outside world, not the internal limits the members set. A too-wide object, or an imprecise object clause, can therefore bind the members beyond what they intended, because a third party can rely on any act that falls within the stated object regardless of the internal restrictions. This is why the object clause is not a formality - it is the true boundary of the gérant's external power, and it has to be drafted with that in mind.

One application of this matters more than any other for an SCI: the power to sell or mortgage the property. The general statutory formula reproducing Article 1848 does not, by itself, give the gérant the power to dispose of the company's assets. A gérant cannot sell or mortgage the company's building where the company's sole object is the management of that building - to do so would empty the company of its substance - and in case of doubt the gérant should obtain the members' authorisation. So the most important act an SCI can undertake, the sale or charging of its property, is normally reserved to the members rather than left to the gérant alone, unless the articles and the object deliberately provide otherwise. Getting this right is central to keeping control of the property where the founders intend.

What can your gérant do alone?

Some acts the gérant can do alone; others need the members. Pick the act - the check shows where it falls.

Removing the gérant

The default rule on removal is a simple majority of the capital. Unless the articles provide otherwise, the gérant is removable by a decision of the members representing more than half the shares (C. civ. Art. 1851, paragraph 1). That is the starting point, and it is one of the most important things a founder can change: a gérant who wants to be secure will reinforce this majority in the articles, while members who want to keep the gérant accountable will leave it at the statutory level or lower.

Two features of the removal decision are worth understanding. First, a gérant who is also a member takes part in the vote on their own removal, so a gérant-member with enough shares can block a removal - in which case the other members can apply to the court to have the gérant removed instead. Second, the members must respect the gérant's right to defend themselves: even a non-member gérant must be convened and invited to explain, and a removal decided abruptly, without giving the gérant that opportunity, is a source of damages. A removal decision regularly taken by the members cannot be annulled by a court even if it is not justified by a just cause - but if it is decided without just cause, it gives rise to damages, unless the articles have provided that removal will carry no damages even where it is unjustified, a clause the case law appears to accept. Just cause means faulty conduct by the gérant that has caused, or is certain to cause in the foreseeable future, harm to the company.

Removal is not the only way the gérant's functions end. Beyond the normal expiry of the term, they end by death, by the onset of an incapacity or disqualification, or by resignation. A gérant of an ordinary civil company can in principle resign at any time without giving a legitimate reason, though they may have to compensate the company for harm caused by an untimely resignation, and the articles can regulate resignation - requiring notice, for instance, or the orderly handover of the management. One further point should always be checked when the gérant is a member: unless the articles provide otherwise, a gérant-member who is removed may have a right of withdrawal (droit de retrait) from the company, which can oblige the company to buy out their shares - a consequence that has to be weighed when the gérance clause is drafted, because it can make removing a gérant-member expensive.

Appointing or removing your gérant

Appointment and removal each raise their own questions. Pick yours - the check shows what applies.

Co-management and drafting the gérance clause

The members can entrust the management to several gérants, and they can divide the powers between them as they wish - requiring, for instance, the agreement of all the co-gérants for the most serious acts, or setting simple majority rules among them. But there is a limit that mirrors the one on the object clause: an organisation of the co-management is unenforceable against third parties. In the silence of the articles, the co-gérants exercise their powers separately, each with the right to oppose an operation before it is concluded (C. civ. Art. 1848, paragraph 2); and towards third parties, the powers the law gives the gérant are held separately by each co-gérant, so an internal division of roles does not stop one co-gérant binding the company towards a good-faith outsider. Co-management therefore controls the internal relationship, not the external one, which remains governed by the object.

All of this comes together in the drafting of the gérance clause, which is where the control of an SCI is really settled. The object clause frames the gérant's external power and must be drawn no wider than the founders intend; the internal clauses set what the gérant may do without a members' vote, typically reserving the sale or mortgage of the property and a change of tax regime; the removal majority is calibrated up or down to make the gérant more or less secure; the treatment of a gérant-member's withdrawal on removal is settled in advance; and, in a family SCI, the whole is arranged so that a parent-manager keeps control of the company while giving away the capital - an irremovable or near-irremovable gérant, broad internal powers over management, and the significant acts reserved so the children cannot force a sale. The default rules of Articles 1846 to 1851 are the starting point; the gérance clause is how a founder turns them into the control structure the company actually needs.

The gérant of an SCI - at a glance

Frequently asked questions about the gérant of an SCI

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 gérance structure depends on the members, the control objectives and the transmission plan. Always seek qualified legal advice before appointing, empowering or removing the gérant of an SCI.