Why Every French SAS Capital Raise Must Vote on an Employee Share Offer First

The employee share-offer resolution: a mandatory vote at every cash raise

Every French SAS that has employees and runs a cash capital raise must put a separate resolution to the shareholders' vote: a proposal to carry out a capital increase reserved for the company's employees under the conditions set out in Arts. L 3332-18 to L 3332-24 of the Code du travail. The vote is mandatory under Art. L 225-129-6 of the Commercial Code, even where the shareholders know they will reject the proposal. Skipping the resolution can void the capital increase — until 30 September 2025 automatically, and from 1 October 2025 under a more discretionary court review.

This guide covers the rule, when it applies, the exemptions, the procedural mechanics of the rejection vote (the default outcome in closely held SAS), the penalty for skipping the resolution, the 1 October 2025 nullity reform, the variable-capital incompatibility, the group exemption when a parent runs a group savings plan, and the question of whether a French SAS without a permanent statutory auditor needs to appoint one for the resolution. For the capital-raise procedure itself, see our step-by-step cash-raise guide.

The L 225-129-6 rule: what every French SAS capital raise must include

Art. L 225-129-6 of the Commercial Code requires that every decision to increase the capital in cash, in an SAS that has employees, be accompanied by a separate shareholder resolution proposing a capital increase reserved to the company's employees, carried out under the conditions of Arts. L 3332-18 to L 3332-24 of the Code du travail — the employee-savings-plan regime for capital participation.

The mechanism has two parallel layers:

Layer 1: the main capital increase. The shareholders vote on the cash capital raise as planned — the amount, the price, the suppression of the pre-emptive right (where applicable), the subscribers. This is the operation the company intends to close.

Layer 2: the employee share-offer resolution. The shareholders vote on the alternative — a separate resolution proposing to reserve a capital increase for the employees on the Code du travail terms. This is the proposal the company is required to put forward, even where it intends to reject it.

The two votes are taken in the same shareholder process — meeting or written consent — and voted separately. The main increase passes; the employee resolution typically fails. The legal requirement is the putting of the employee resolution to the vote, not the passing of it. Where the resolution is rejected, the main increase proceeds without an employee tranche.

The rule comes from the SA-derived capital-raise framework and applies expressly to the SAS. It also applies when the shareholders delegate their competence to the president to decide subsequent capital increases (Art. L 225-129-2): the collective decision granting the delegation must itself carry the employee share-offer resolution, even though the actual increase will be decided later by the president within the delegated cap.

When the employee share-offer rule applies to a French SAS capital raise

The rule applies when three conditions are met.

The capital raise is in cash. The rule targets augmentations de capital par apport en numéraire — cash subscriptions, on the standard analysis including those liberated by set-off. It does not apply to capital raises by in-kind contribution alone, by capitalisation of reserves alone, or on the exercise of previously issued instruments. Mixed raises are treated in practice as triggering the rule through their cash component.

The SAS has employees. The rule applies to companies with employees. An SAS without any does not put the resolution to the vote — the proposal would address a non-existent population. In practice, most operating SAS have employees early; the president is an assimilé salarié for social-security purposes but is not, on the standard analysis, an employee under an employment contract for this purpose — the question is whether the company has subordinated workers under employment contracts.

No specific exemption applies. The exemptions — prior issuance of securities giving access to capital, the group exemption, and the variable-capital incompatibility — are covered below.

In any other configuration, the rule applies. The default position for an operating French SAS running a cash capital raise is that the employee share-offer resolution must be on the agenda.

The rule does not require the employee population to be consulted at the time of the vote. The shareholders deliberate on the resolution; if they reject it (the typical outcome), no employee-side process follows. Where the shareholders accept the resolution (rare), the company implements the offer under the Code du travail regime, with its plan mechanics and holding rules.

When the employee share-offer rule does NOT apply to a French SAS capital raise

Three configurations remove the L 225-129-6 obligation.

Capital increases resulting from the prior issuance of securities giving access to capital. Where the increase results from the exercise of warrants (BSA), convertible bonds, BSPCE, or similar instruments issued earlier, the employee resolution does not run at the moment of the underlying share issuance — the statute carves that case out expressly. The obligation attaches to the decision that issued the instruments (where it was itself a cash-raise decision in scope); it does not run again on exercise or conversion.

The group exemption (detailed below). A French SAS controlled by a parent that operates a group savings plan is dispensed — the employee-equity question is handled at group level.

The variable-capital incompatibility (detailed below). On the prevailing analysis, a variable-capital SAS operates outside the obligation, both for intercalary issues within the capital autorisé and for decisions to lift the ceiling.

One obligation that used to apply no longer does: the triennial recurring vote. Until the Loi 2019-744 of 19 July 2019, the shareholders had to vote every three years on an employee share-offer resolution whenever employee-held shares represented less than 3 % of the capital — even with no capital raise on the table. In practice the resolution was routinely rejected, and the 2019 law abolished the recurring obligation. Only the capital-raise-driven vote remains: the rule now operates at the moment employee participation is genuinely on the agenda, not on a recurring abstract basis.

The structure of the employee resolution at a French SAS capital raise

The employee share-offer resolution is drafted as a parallel proposal to the main capital increase. It typically includes:

• The amount of the proposed employee tranche — typically a small percentage of the main increase, sized to express the statutory proposal rather than to commit to a substantial allocation;
• The price basis for the employee shares — compliant with the Code du travail regime, for an unlisted SAS typically a net-asset-revalued reference (actif net réévalué) or another method permitted by Art. L 3332-20;
• The conditions of subscription — the offer running through the employee-savings-plan framework of Arts. L 3332-18 to L 3332-24, with its plan mechanics and holding rules;
• The recommendation — the president's report addresses the resolution; in closely held SAS the recommendation is typically rejection, the company having no plan to run an employee equity scheme on those terms.

The shareholders deliberate and vote at the bylaws-set majority for capital changes. Where the resolution is rejected, the main capital increase proceeds; the rejection is recorded in the register of decisions.

In most closely held SAS the drafting is a procedural step rather than a substantive negotiation. Counsel uses a standard resolution that meets the statutory requirements without committing the company to anything; it is voted down, and the main increase moves forward.

What happens when the resolution is rejected (which it usually is)

In the vast majority of closely held French SAS, the employee resolution is rejected. The shareholders vote against, the result is recorded, and the main capital increase proceeds.

The rejection has no operational consequence beyond the procedural record. The company is not required to revisit the question for any defined period (the triennial obligation having been abolished); the next cash capital raise will simply trigger the same resolution again.

Two practice questions have been settled in the company's favour — both matter for SAS without a permanent statutory auditor.

No auditor's report for a resolution headed for rejection. A capital increase reserved to a category of persons normally calls for a special report of the statutory auditor (C. com. Art. L 225-138, II). Does a company need to produce that report — and an auditor-less SAS to appoint one — for an employee resolution everyone intends to reject? The ANSA's position is no: no provision attaches nullity to the increase for the absence of that report, and an SAS without an auditor therefore does not need a one-off appointment to present a report on a resolution it intends to reject (ANSA, comité juridique of 3 June 2020, n° 20-022).

Pricing without an auditor where the offer does proceed. A separate question arises where an SAS actually carries out an employee-reserved increase and prices it on the net-asset-revalued method: the Code du travail places that price determination under the statutory auditor's control (Art. L 3332-20). For an SAS not equipped with an auditor, the ANSA considers the company need not appoint one specially and can run the valuation itself. The point concerns the rare case where the offer is implemented — the rejection scenario never reaches it.

Together, the positions contain the procedural overhead for closely held SAS: the resolution is voted, rejected, and recorded; no one-off auditor appointment is needed; the main increase proceeds.

Does the employee resolution apply to your raise?

Pick the situation closest to yours and see whether the L 225-129-6 vote belongs on your agenda — and the point to settle before the decision is drafted.

The penalty for skipping the employee resolution at a French SAS capital raise

Where the company runs a cash capital raise without putting the employee share-offer resolution to the vote, the operation is exposed to nullity.

Until 30 September 2025, the nullity was automatic — the decision taken in violation of the rule was null as of right (C. com. Art. L 225-149-3, al. 2, in force until that date). Any interested party could invoke it within the prescription window.

From 1 October 2025, the nullity is no longer automatic. Under the reformed regime of Ord. 2025-229 of 12 March 2025 (C. civ. Art. 1844-10, al. 3), the court conducts a more searching review of the breach before deciding whether to void the operation. The change is part of the broader reform of nullities in French company law.

In any event, the nullity action is time-barred three months after the date of the collective decision that follows the capital-increase decision (C. com. Art. L 235-9, al. 3 until 30 September 2025; Art. L 225-149-4 from 1 October 2025).

A specific protection applies to regularisation. Where a cash raise was decided without the employee resolution, the company can regularise by holding a fresh collective decision that votes solely on the omitted resolution — with no need to revote the underlying capital increase. The Cour de cassation has confirmed the single-resolution regularisation (Cass. com. 28 November 2018, n° 16-28358). Once the resolution is voted (and typically rejected), the position is regularised.

The penalty therefore exists structurally but is rarely litigated where the company is willing to regularise. Foreign founders running French SAS that skipped the resolution at an earlier raise should run a regularising decision — the overhead is minimal and the protection real.

The 1 October 2025 reform: from automatic nullity to judicial review

Ord. 2025-229 of 12 March 2025 reformed the nullity rules for company decisions across French commercial forms, with effect from 1 October 2025.

The change matters directly for the L 225-129-6 rule. Before the reform, a capital raise decided without the employee resolution was null as of right — the claimant only had to show the omission, and the sanction followed (subject to the three-month prescription). After the reform, the nullity is facultative: the court conducts a more searching review of the breach before deciding whether to void the operation, within a reformed framework that reserves nullity to breaches of imperative provisions.

The shift reduces the procedural fragility of capital increases without touching the underlying obligation. A SAS running a cash raise after 1 October 2025 must still put the resolution to the vote; what changes is the consequence of an omission. Companies tempted to relax on the basis that the sanction has softened should note that a court can still void the operation where the breach is material — and that the three-month prescription and the regularisation route both survive the reform.

The right path is unchanged: vote the resolution, record the rejection, move on.

The variable-capital incompatibility with the L 225-129-6 rule

A French SAS with variable capital operates outside the L 225-129-6 obligation — the position of the ANSA legal committee (9 January 2019, n° 19-002), reasoned on the regime's structure:

Intercalary issues. When new shares are issued within the capital autorisé range, no collective capital-increase decision is taken — the admission is a cap-table movement under the variability clause. Without a decision, there is no occasion at which the employee resolution could be slotted in.

Decisions to lift the ceiling. When the shareholders raise the capital autorisé, they are not deciding a capital increase — not even a potential one, as a delegation of competence would be. They are setting an upper bound on a capital that may or may not later move up to it.

The result is that variable-capital SAS run rolling cap-table movements without triggering the employee resolution — one of the structural features of the regime, and one of its trade-offs. A founder who wants an employee equity scheme that integrates with capital increases should keep the company in fixed capital; a founder who wants light-procedure capital management without the L 225-129-6 overhead can consider variable capital, at the cost of the other features covered in our variable-capital guide (no statutory pre-emptive right on rolling admissions, the « à capital variable » mention, the floor rules).

The exception is specific: a variable-capital SAS still complies with the other company-law obligations — beneficial-owner declarations, auditor thresholds, accounts approval. Only the employee-resolution regime is out of reach.

The group exemption: when a parent's savings plan clears the subsidiary

A French SAS that is a controlled subsidiary in a group is dispensed from putting the L 225-129-6 resolution to its own shareholders, where two conditions are met (C. com. Art. L 225-129-6).

The parent controls the SAS within the meaning of Art. L 233-16 of the Commercial Code — the consolidated-accounts control test: a majority of voting rights, or control established by other means.

The group operates an employee savings plan under Art. L 3344-1 of the Code du travail — an intéressement agreement, a participation scheme, or a company savings plan (PEE) — from which the employees of the controlled subsidiaries, including the French SAS, can benefit. In that architecture, the parent manages the group's employee savings, and the consultation obligation rests on the parent.

Where both conditions hold, the SAS does not run the resolution at each cash raise — the group plan substitutes for it. The exemption is widely used by foreign groups operating French subsidiaries: the parent maintains a group-level programme, the French subsidiary participates, and the subsidiary's serial recapitalisations run without the resolution.

Two continuity checks keep the exemption alive. The plan must continue to operate and to cover the subsidiary's employees — a wound-down or restructured plan revives the rule. And the control relationship must hold — a sell-down taking the parent below the L 233-16 threshold takes the subsidiary out of the exemption's perimeter. Both points should be verified at every raise.

Skipped the resolution? Map your exposure and the regularisation window

Enter the date of the raise decided without the resolution and the date of the collective decision that followed (if any) — and see the prescription window, the applicable regime, and the regularisation move.

Frequently asked questions about the employee share-offer rule at a French SAS capital raise

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 handling of the L 225-129-6 employee resolution depends on the company's employee population, the group context, and the specific capital-raise configuration. Always seek qualified legal advice before launching a cash capital raise in France.