Nu-Prop
Only the nu-propriétaire has the status of associé in a company whose shares are démembred — settled definitively by the Cour de cassation in December 2021 after decades of doctrinal debate.
Art. 1844
The Civil Code default for SCIs, SARLs, and SASs: nu-propriétaire votes on all decisions except the allocation of profits — reserved irrevocably to the usufruitier; statuts can modify this but never remove the profit vote.
2009
The Cour de cassation decision that remains the most serious abuse-of-law risk for the apport-donation strategy: an SCI holding only nue-propriété, with no other assets or revenues, was found fictitious and the donations recharacterised.

Who Has the Status of Associé When Shares Are Démembred?

This is the threshold question that determines everything else. The quality of associé carries a bundle of rights and obligations: the right to vote, to receive distributions, to obtain information, to challenge decisions, to bring actions on behalf of the company. When shares are démembred, both the usufruitier and the nu-propriétaire have a relationship with the company — but they do not share that bundle equally.

After decades of doctrinal uncertainty, the Cour de cassation delivered a landmark opinion in December 2021. Drawing directly on Article 578 of the Civil Code, the court held that the usufruitier of company shares "cannot be recognised as having the status of associé, which belongs only to the nu-propriétaire" — but immediately added that the usufruitier "must be able to trigger a deliberation of the members on any question capable of having a direct impact on their right of enjoyment" (Cass. com. avis 1-12-2021 n° 20-15.164 FS-D). The civil chamber confirmed this formulation word for word in February 2022 (Cass. 3ème civ. 16-2-2022 n° 20-15.164 FS-B).

The practical consequences: the nu-propriétaire is the associé. They made the contribution, they participate in profits and losses, they have the affectio societatis. Rights that require associé status belong to the nu-propriétaire. The usufruitier exercises rights only where those rights have direct impact on their enjoyment — whether demanding the removal of a gérant who is destroying dividends, or requesting a management audit to investigate disappearing profits. The precise scope of that "direct impact" criterion will continue to be tested in the courts.

Voting Rights: The Default Rules and How to Modify Them

The voting rules for démembred shares differ by company type. Two distinct regimes exist, and the default in each can surprise families who have not read their statuts carefully.

Sociétés par Actions Other Than SAS: The SA Default

In joint-stock companies other than the SAS (SA, SCA), the default under Article L 225-110 of the Commercial Code splits the vote by meeting type: the usufruitier votes at ordinary general meetings (AGO); the nu-propriétaire votes at extraordinary general meetings (AGE). The usufruitier approves accounts, votes profit allocation, elects directors. The nu-propriétaire votes on statutory modifications, capital transactions, mergers, and dissolution. This default can be modified in the statuts — but one protection is absolute: a clause giving the nu-propriétaire the right to vote all decisions, including profit allocation, is null (Cass. com. 31-3-2004 n° 624 FS-PB).

SCIs, SARLs, SNCs, and SAS: The Reversed Default

For all companies whose capital is divided into parts sociales — SCIs, SARLs, SNCs, and SASs — the default under Article 1844 al. 3 of the Civil Code is the opposite: the nu-propriétaire votes on all decisions, except the allocation of profits, which belongs to the usufruitier (C. civ. Art. 1844 al. 3). This default is also adjustable by the statuts — for example, by reversing it to the SA model — but the profit allocation vote remains irrevocably with the usufruitier.

The SCI Default — What It Means for Families

In a typical family SCI, the default under Art. 1844 gives the children (nus-propriétaires) all the votes — including approving accounts, authorising renovations, changing management, or agreeing to sell the property — except the decision whether to distribute profits. The parents (usufruitiers) vote only on dividend distribution. If the parents intend to retain practical control over the SCI's day-to-day governance, the statuts must be drafted to that effect. Without that drafting, the children hold the governance power even though the parents receive all the income.

Company type Default: ordinary decisions Default: structural/statutory decisions Profit allocation vote
SA / SCA Usufruitier (AGO) Nu-propriétaire (AGE) Usufruitier — irremovable by statuts
SCI / SARL / SNC / SAS Nu-propriétaire Nu-propriétaire Usufruitier — irremovable by statuts

Conventional Redistribution Since 2019

Since the Loi PACTE 2019, the law expressly allows the nu-propriétaire and usufruitier to agree by separate convention — independently of the statuts — that the usufruitier will exercise the nu-propriétaire's voting rights, for all or part of the decisions (C. civ. Art. 1844 al. 3 and 4 as amended by Loi 2019-744 of 19-7-2019). This convention constitutes a mandate and can run for the full duration of the usufruit. It must specify which decisions it covers. The company should be notified of its existence and content — ideally by registered letter with a copy of the signed agreement. The statuts cannot prohibit this convention, and it terminates by revocation or on the death or legal incapacitation of either party.

The 2019 reform also made a second change: both the usufruitier and the nu-propriétaire now have an unconditional right to be convened to and attend all general meetings, regardless of who holds the vote. Neither can be excluded. Both must receive the same information documents. The party without the vote can still speak — they simply cannot cast a ballot.

Dividends vs Reserves: The Critical Distinction

The economic benefit flowing from démembred shares follows the same fruit/capital principle as for physical assets: the usufruitier receives the fruits (income); the nu-propriétaire retains the capital. But applying this to corporate distributions requires understanding when a company payment is income and when it is a return of capital.

Current-Year Profits Distributed as Dividends

The usufruitier's right attaches to distributed profits — not distributable profits. A profit becomes a fruit only from the moment the general meeting votes to distribute it. Until that vote, undistributed profits accumulate as reserves and increase the company's net assets — capital belonging to the nu-propriétaire's sphere. The Cour de cassation has confirmed this consistently: the usufruitier becomes a creditor of the company only when the distribution is voted, and only for the distributed amount (Cass. com. 5-10-1999 n° 1443; Cass. com. 28-11-2006 n° 04-17.486). Profits retained in reserves — never distributed — enrich the nu-propriétaire with no obligation to the usufruitier.

Reserve Distributions: An Unresolved Conflict

Where a meeting distributes previously accumulated reserves rather than current-year profits, the analysis is contested at the highest level. The commercial chamber has held twice — one decision reaching the highest PBRI publication level — that reserve distributions give rise to a quasi-usufruit for the usufruitier: they receive the distributed amount but become a debtor to the nu-propriétaire for the equivalent sum, repayable at the end of the usufruit (Cass. com. 27-5-2015 n° 14-16.246; Cass. com. 24-5-2016 n° 15-17.788). The civil chamber, in 2016, held the opposite: reserves "constitute an increase in the company's assets and revert as such to the nu-propriétaire," who alone receives reserve distributions (Cass. 1ère civ. 22-6-2016 n° 15-19.471).

The chambers remain unreconciled. Until the conflict is resolved — whether by a plenary assembly of the Cour de cassation or by legislation — the only prudent approach is to address reserve distributions expressly in the company's statuts, specifying whether they create a quasi-usufruit or go directly to the nu-propriétaire, and under what conditions.

The Reserve Distribution Trap for Family SCIs

A family SCI that has accumulated substantial reserves from years of rental income not distributed to the parents — perhaps because the parents did not need the cash flow — faces a genuinely uncertain legal position when those reserves are eventually distributed. Under the commercial chamber analysis, the parents receive the cash but owe the children the equivalent sum when the usufruit ends, reducing the estate value. Under the civil chamber, the children receive the distribution directly. Families operating on the assumption that reserve distributions simply add to the parents' income are likely operating under a misapprehension. Clarify the statuts before the first reserve distribution vote.

New Shares from Capitalising Reserves

Where reserves are incorporated into share capital and new shares are issued, those shares accrue to the nu-propriétaire — they are an increase in capital, not distributed income. The usufruitier's right extends over the new shares in proportion to their existing usufruit, but the shares themselves join the nu-propriétaire's capital sphere.

Other Governance and Minority Rights

Following the 2021 ruling, governance rights that require associé status belong in principle to the nu-propriétaire: the right to request a management audit (expertise de gestion), to call for a general meeting, to place items on the agenda, to bring the company's action in its own name (action ut singuli), and to seek dissolution for just cause.

The usufruitier may now exercise some of these rights where the matter directly affects their enjoyment. The 2021 avis arose specifically from an usufruitier of a société civile's parts demanding a deliberation to revoke the gérant and appoint co-gérants — a governance question with direct impact on the management of the income-generating activity. Future case law will define the contours, but the principle is now settled: the criterion is direct impact on the right of enjoyment, not any general interest in the company's affairs.

Rights open to any person with a legal interest — the right to sue for personal loss caused by management misconduct, the right to apply for a court-appointed administrator — remain available to both parties.

Withdrawal and Dissolution

Withdrawal from a Société Civile

In a société civile, a member may withdraw where the statuts permit it, with unanimous consent, or by court order for just cause. Since only the nu-propriétaire is an associé, the right to withdraw technically belongs to them alone. But the majority doctrine holds that withdrawal requires the usufruitier's agreement — or at least gives them standing to object — because withdrawal destroys the shares subject to the usufruit, depriving the usufruitier of their dividend stream and directly damaging their rights under Article 599 of the Civil Code. Following withdrawal, the usufruit continues on whatever asset is received in exchange — through a quasi-usufruit on cash proceeds or a conventional reallocation between the parties.

Company Dissolution

On dissolution, the liquidation proceeds are not simply divided between the usufruitier and the nu-propriétaire. The usufruit is instead carried forward onto those proceeds. Where cash is received, the usufruitier becomes a quasi-usufruitier on the liquidation distribution: they can use the funds freely but owe the nu-propriétaire a debt of restitution at the end of the usufruit (C. civ. Art. 587; Cass. 1ère civ. 8-3-1988 n° 86-11.144). A convention — in the statuts or adopted at the time of the dissolution decision — is essential to document the quasi-usufruit arrangements, the caution obligations under Articles 601 and 602, and any reinvestment or direct distribution agreement.

The SARL Gérant: When Démembrement Affects Social Charges

In a SARL, the gérant's mandatory social regime — and therefore the social charges applicable to their remuneration — depends on whether they are a gérant majoritaire (holding more than 50% of shares in full ownership or usufruit) or minoritaire/égalitaire. The financial consequence is significant: for equivalent net income, the cost for an employer under the salaried (minoritaire) regime is approximately 182% of net salary, compared to approximately 145% under the self-employed TNS regime.

The rule for determining majority status: only shares held in full ownership or in usufruit count toward the gérant's position. Shares held in nue-propriété are excluded (CGI Art. 211; C. séc. soc. Art. L 311-3-11°). A gérant who is a nu-propriétaire of shares — because their parents retained the usufruit and gave them the nue-propriété — does not count those nue-propriété shares toward their majority calculation.

Example: Jean Durand, Gérant — Majority or Minority Status?

A SARL has 1,000 shares. Jean Durand (gérant) holds 300 shares in full ownership and the usufruit of 400 shares. His adult daughter Isabelle holds 150 in full ownership and the nue-propriété of 200 shares. His adult son Pierre holds 150 in full ownership and the nue-propriété of 200 shares.

Jean's counted shares: 300 (pleine propriété) + 400 (usufruit) = 700 out of 1,000 → gérant majoritaire
Isabelle's 200 nue-propriété shares: not counted for Jean
Pierre's 200 nue-propriété shares: not counted for Jean
→ Jean is subject to the TNS (self-employed) social charges regime

If the structure were reversed — Jean held only the 300 full-ownership shares, while his children held the usufruit — only Jean's 300 shares would count (30%), making him a gérant minoritaire under the salaried regime. The démembrement structure between parent and children directly determines the gérant's social charges regime, which can amount to tens of thousands of euros annually.

The Apport-Donation: Contributing Property to an SCI, Then Donating the Shares

The most widely used SCI + démembrement planning combination operates in two steps. First, the property owner contributes the nue-propriété of a property to an SCI, retaining the usufruit. They receive SCI shares in exchange for the nue-propriété contribution. Second, they donate those SCI shares in full ownership to their children.

The gift tax saving arises from the gap between the barème fiscal and the real economic value of the nue-propriété. Where a property is donated directly, the nue-propriété is valued using the mandatory Art. 669 barème — which tends to overvalue the nue-propriété relative to its true economic worth, especially for high-yield properties. Where the SCI shares are donated instead, those shares are valued at their real economic value — which corresponds to the economic nue-propriété value, not the barème fraction. The difference can be substantial.

Example: Direct Donation vs Apport-Donation — Gift Tax Comparison

Isabelle (aged 62) owns a commercial property worth €2,500,000, generating €140,000 in annual net rent (5.6% yield). She wishes to transmit the nue-propriété to her two children while retaining the usufruit.

Option A — Direct donation of nue-propriété (barème):
Barème (61–70 bracket → 60%): taxable base = 60% × €2,500,000 = €1,500,000
Gift tax (two children, after €100,000 abatements): approximately €275,924

Option B — Apport-donation via SCI (economic value):
Economic nue-propriété value: €611,300
SCI shares donated at €611,300 (two children, after abatements): approximately €78,650

Saving: approximately €197,274

The Abuse-of-Law Risks

The tax authority has targeted the apport-donation as a priority abuse-of-law challenge (LPF Art. L 64). A 2007 Cour de cassation decision upheld a challenge on grounds of both the company's fictivity and the exclusively fiscal purpose of the operation (Cass. com. 15-5-2007 n° 06-14.262). A series of 2008 decisions reversed course in broadly similar structures, accepting the existence of legitimate non-fiscal motivations — avoiding indivision, facilitating joint management, securing intergenerational governance — as grounds to reject the challenge (Cass. com. 26-3-2008 n° 06-21.944; Cass. com. 20-5-2008 n° 07-18.397; Cass. com. 23-9-2008 n° 07-15.210; Cass. com. 4-11-2008 n° 07-19.870).

The most important risk factor remains the January 2009 decision: an SCI that holds only the nue-propriété of real estate assets — with no other assets, no revenue, and insufficient equity to meet its corporate purpose — was found fictitious, and the donations of its shares were recharacterised as direct donations of the underlying immoveable nue-propriété (Cass. com. 13-1-2009 n° 07-20.097). The court's reasoning — that a passive SCI with zero revenue cannot have a genuine corporate purpose — has been criticised doctrinally, but it remains good law and is actively cited by the tax authority.

The practical actions required to protect an apport-donation structure:

  • Contribute some assets in full ownership to the SCI alongside the nue-propriété — even a modest amount of cash or securities gives the company operating assets and revenue capacity, preventing a finding of fictivity on grounds of zero productive assets.
  • Hold real general meetings, properly convened and properly minuted, with genuine decisions made on substantive matters.
  • Maintain proper accounts — a société civile is required to keep accounts; they must be prepared, approved at the AGO, and retained.
  • Document and articulate non-fiscal purposes in the statuts and formation documents — avoiding indivision, centralising management, maintaining family control, facilitating transmission are all legitimate purposes that must be genuine, not merely listed as protective boilerplate.
  • Do not create a shell SCI whose sole function is the gift tax arithmetic — the structure must serve real property management and family governance goals alongside any tax efficiency.
Cross-Border Note for Expat Families

The SCI is a translucent entity for French income tax purposes — income flows through to the members as if they held the property directly, in the category of revenus fonciers. Foreign tax authorities may not recognise this characterisation. UK HMRC, for example, may treat the SCI as an opaque foreign company and apply different income and distribution rules, creating a mismatch with the French treatment. The members could face UK tax on deemed company distributions that have already been taxed in France as direct rental income. Any apport-donation strategy involving a cross-border family requires simultaneous French notarial advice and advice from a tax adviser in the relevant foreign jurisdiction before the first document is signed.

Key Points: SCI Shares in Démembrement — What Every Family Must Know
Only the nu-propriétaire is an associé — settled definitively in December 2021 (Cass. com. avis 1-12-2021); the usufruitier is not an associé but can demand a deliberation on any matter with direct impact on their right of enjoyment.
In an SCI, SARL, or SAS, the default (Art. 1844) gives the nu-propriétaire all votes except the profit allocation vote, which belongs irrevocably to the usufruitier; this default is the opposite of what most families intend and must be modified in the statuts if parents are to retain governance control.
Since 2019 (Loi PACTE), a convention between the parties can give the usufruitier the nu-propriétaire's voting mandate for all or specified decisions — this convention can run for the usufruit's full duration and cannot be prohibited by the statuts.
Both parties must be convened to and may attend all general meetings since 2019, regardless of who holds the voting right. Neither can be excluded; both receive the same information documents.
Distributed current-year profits belong to the usufruitier; undistributed profits held in reserves belong to the nu-propriétaire; reserve distributions are contested between the Cour de cassation's chambers (commercial vs civil) and must be addressed expressly in the statuts.
On dissolution, the usufruit is carried forward onto the liquidation proceeds — the usufruitier receives cash as quasi-usufruitier but owes the nu-propriétaire a debt of restitution (C. civ. Art. 587); a convention documenting this arrangement is essential at dissolution.
The SARL gérant's majority/minority status (and social charges regime) counts only full-ownership and usufruit shares — nue-propriété is excluded (CGI Art. 211); the démembrement structure can determine whether the gérant falls under the TNS or salaried regime, a difference worth tens of thousands of euros annually.
The apport-donation (contribute nue-propriété to SCI; donate shares in full ownership) can produce gift tax savings of €100,000+ compared to direct nue-propriété donation by using economic value rather than the barème fiscal (CGI Art. 669).
An SCI holding only nue-propriété with no other assets, no revenues, and no real corporate life may be found fictitious and its donations recharacterised (Cass. com. 13-1-2009 n° 07-20.097) — always contribute some full-ownership assets and operate the SCI as a genuine entity with real meetings and proper accounts.
For expat families, the SCI's French translucent treatment (revenus fonciers flowing through to members) may not be recognised by foreign tax authorities; UK HMRC may treat it as an opaque foreign company. UK and US tax advisers must be consulted on the specific structure before any documents are signed.
Structuring a French SCI with Démembrement?

Whether you are setting up a family SCI, reviewing an inherited structure, or planning an apport-donation, our guides cover the complete French framework — from the statuts drafting details to the cross-border tax considerations for expat families.

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This article is provided for general information and educational purposes only. It does not constitute legal or tax advice. The governance, tax, and estate planning consequences of démembrement of company shares depend heavily on the company's statuts, the type of entity, the applicable statutory regime, and each party's individual tax and legal position. The abuse-of-law risk in apport-donation structures requires careful, fact-specific assessment. Always seek advice from a qualified French notary or lawyer, and for cross-border structures from appropriately qualified advisers in the relevant foreign jurisdictions. References are correct to the best of the author's knowledge as of the date of publication.