{"id":1422,"date":"2025-10-28T12:00:34","date_gmt":"2025-10-28T11:00:34","guid":{"rendered":"https:\/\/www.alkeom.law\/?p=1422"},"modified":"2025-10-28T12:03:49","modified_gmt":"2025-10-28T11:03:49","slug":"corporate-officers-mandates-the-companys-bylaws-prevail-over-shareholders-resolutions-and-contractual-arrangements","status":"publish","type":"post","link":"https:\/\/www.alkeom.law\/en\/corporate-officers-mandates-the-companys-bylaws-prevail-over-shareholders-resolutions-and-contractual-arrangements\/","title":{"rendered":"Corporate Officers’ Mandates: Bylaws Prevail Over Shareholders\u2019 Resolutions and Contractual Arrangements"},"content":{"rendered":"\n
\"Principe<\/figure>\n\n\n\n

The bylaws of a company define the rules governing its organization, including the management structure and the conditions for the appointment, removal, and execution of its corporate officers\u2019 mandates. Recent rulings of the French Cour de cassation<\/em> reaffirm that, in the context of a simplified joint-stock company (SAS \u2013 Soci\u00e9t\u00e9 par Actions Simplifi\u00e9e<\/em>), the freedom granted under Article L.227-5 of the French Commercial Code<\/a> offers significant flexibility in designing internal governance rules, but conversely requires their strict and consistent application throughout the company\u2019s existence.<\/p>\n\n\n\n

Yet what happens when, during the company\u2019s life, the shareholders agree with a prospective corporate officer on terms of office that conflict with the bylaws? Would a unanimous shareholders\u2019 resolution or a contractual agreement suffice, or is a formal amendment to the bylaws required beforehand?<\/p>\n\n\n\n

In a first ruling dated 9 July 2025,1<\/a><\/sup> the Cour de cassation<\/em> held that a shareholders\u2019 resolution may supplement the bylaws but cannot override them entirely, even when adopted unanimously. In a second ruling issued the same day,2<\/a><\/sup> the Court clarified that agreements concluded between shareholders and a corporate officer are not enforceable against the company itself: they bind only the signatories on a contractual basis, giving rise, where appropriate, to the officer\u2019s right to seek compensation for any resulting loss.<\/p>\n\n\n\n

Shareholders\u2019 Decisions cannot Override the Bylaws<\/h2>\n\n\n\n

In the first decision of 9 July 2025, the bylaws of a French simplified joint-stock company (SAS) provided that the General Director (Directeur G\u00e9n\u00e9ral<\/em>) could be dismissed by the President at any time, without cause.<\/p>\n\n\n\n

By a unanimous shareholders\u2019 resolution, the shareholders appointed a General Director and specified the terms of his office. Under those terms, he could only be dismissed by a collective decision of the shareholders in three defined circumstances.<\/p>\n\n\n\n

Some time later, the General Director was dismissed outside those limited cases. He then claimed that his dismissal breached the shareholders\u2019 resolution under which he had been appointed and sought damages from the company. The Court of Appeal upheld his claim, finding that the unanimous decision of the shareholders clearly evidenced their unequivocal intention to depart from the bylaws. It further noted that the decision had been adopted in accordance with the formalities required for amending the bylaws, and was therefore binding upon the company despite being inconsistent with them.<\/p>\n\n\n\n

The French Supreme Court overturned the Appeal Court’s decision on the basis of Articles L.227-1<\/a> and L.227-5 of the French Commercial Code<\/a>. It first recalled that the bylaws of an SAS establish the framework for the company\u2019s management, including the rules governing the removal of its corporate officers. Second, it reaffirmed that while a shareholders\u2019 resolution may supplement the bylaws, it cannot override or contravene them, even when adopted unanimously.<\/p>\n\n\n\n

This ruling forms part of a broader line of decisions from the French Cour de cassation<\/em> confirming the primacy of the bylaws in the hierarchy of rules governing an SAS, a principle first clarified in 2017.3<\/a><\/sup> In 2022, the Court nuanced its position, holding that contractual arrangements (such as shareholders\u2019 agreements) may supplement the bylaws, provided they do not contradict them.4<\/a><\/sup><\/p>\n\n\n\n

Highlights of the Court’s Ruling<\/h2>\n\n\n\n

The 2025 ruling brings two key insights. First, it confirms that shareholders’ resolutions, even when adopted unanimously, are subject to the same limitations as contractual arrangements: they may supplement the bylaws, but cannot contradict or circumvent them.<\/p>\n\n\n\n

Second, this decision\u2014like the previous ones\u2014relates to the rules governing the management of an SAS. A broader question remains open: whether this principle should extend to all situations in which the law entrusts the bylaws with setting out a particular mechanism or defining specific operating procedures.<\/p>\n\n\n\n

Finally, it has to be reminded that in light of its legal basis, the ruling appears to be limited to SASs. In the case of limited liability companies (SARLs), case law has recognized that it is possible to depart from a provision of the bylaws by a subsequent act, provided that all shareholders give their consent.5<\/a><\/sup><\/p>\n\n\n\n

Contractual Undertakings: Binding on Signatories Even in Contradiction with the Bylaws<\/h2>\n\n\n\n

In its second decision of 9 July 2025, the Cour de cassation<\/em> confirmed the validity of a contractual commitment contained in a shareholders\u2019 agreement entered into between the shareholders and a prospective SAS corporate officer. The agreement provided that the shareholders would take all necessary steps to ensure that the officer\u2019s appointment resolution granted a severance indemnity, even though the bylaws stated that the officer could be dismissed without compensation.<\/p>\n\n\n\n

The Court held that this commitment was binding on the shareholders themselves, thereby enabling the officer to seek their contractual liability in the event of non-performance. However, the agreement was not enforceable against the company, which could not be directly compelled to pay the agreed indemnity.<\/p>\n\n\n\n

This ruling offers only limited protection for officers. It remains uncertain whether such a commitment constitutes a binding obligation of result or merely a promise to procure performance (promesse de porte-fort<\/em>), giving rise only to uncertain damages. Future case law will likely clarify these issues.<\/p>\n\n\n\n

Practical Recommendations<\/h2>\n\n\n\n

In light of current case law, and in particular the rulings of 9 July 2025, prospective corporate officers of an SAS should ensure that the terms of their appointment, as negotiated, are fully consistent with the company\u2019s bylaws. If they are not, it is advisable to require that the bylaws be amended before the commencement of the mandate.<\/p>\n\n\n\n

From the shareholders\u2019 perspective, particular care should be taken when drafting the bylaws to ensure sufficient flexibility for the management of the company during its lifetime.<\/p>\n\n\n\n

Finally, the use of a letter of appointment may be considered to formalize the negotiated terms and to specify the manner in which the bylaws should be amended to reflect these agreements.<\/p>\n\n\n\n

<\/p>\n\n\n\n

\n\n\n\n
<\/div>\n\n\n\n

Discover our capacities in respect of Shareholder Advisory and Subsidiary Formation<\/a><\/mark>, Corporate Governance<\/a><\/mark>, ESG <\/a>and Mergers & Acquisitions<\/a> or contact us to discuss your projects.<\/h3>\n\n\n
\n
\"\"<\/a><\/figure>\n<\/div>\n\n\n
<\/div>\n\n\n\n
\n\n\n\n

<\/p>\n\n\n

  1. Cass. com., 9 July 2025, n\u00b024-10.428<\/a> \u21a9\ufe0e<\/a><\/li>
  2. Cass. com., 9 July 2025, n\u00b0 23-21.160<\/a> \u21a9\ufe0e<\/a><\/li>
  3. Cass.\u00a0com.,\u00a025\u00a0January 2017, n\u00b0\u00a014-28.792<\/a> \u21a9\ufe0e<\/a><\/li>
  4. Cass. com., 12 October 2022, n\u00b0 21-15.382<\/a> \u21a9\ufe0e<\/a><\/li>
  5. Cass. com., 12 May 2015, n\u00b014-13.744<\/a> \u21a9\ufe0e<\/a><\/li><\/ol>\n\n\n

    <\/p>\n","protected":false},"excerpt":{"rendered":"

    The bylaws of a company define the rules governing its organization, including the management structure and the conditions for the appointment, removal, and execution of its corporate officers\u2019 mandates. Recent rulings of the French Cour de cassation reaffirm that, in the context of a simplified joint-stock company (SAS \u2013 Soci\u00e9t\u00e9 par Actions Simplifi\u00e9e), the freedom […]<\/p>\n","protected":false},"author":9,"featured_media":1417,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":"[{\"content\":\"Cass. com., 9 July 2025, n\u00b024-10.428<\/a>\",\"id\":\"bf285d4b-aee0-4ad3-8756-01cf3c231d4a\"},{\"content\":\"Cass. com., 9 July 2025, n\u00b0 23-21.160<\/a>\",\"id\":\"2d44be3c-404d-4fae-a941-156d850dd66d\"},{\"content\":\"Cass.\u00a0com.,\u00a025\u00a0January 2017, n\u00b0\u00a014-28.792<\/a>\",\"id\":\"dc6595e3-cd18-4f6a-be7f-76b843798832\"},{\"content\":\"Cass. com., 12 October 2022, n\u00b0 21-15.382<\/a>\",\"id\":\"e9ce1dbd-9ce4-4c35-8034-b08a7cb381ff\"},{\"content\":\"Cass. com., 12 May 2015, n\u00b014-13.744<\/a> \",\"id\":\"535f1899-8b82-4376-a084-cf28a3032c32\"}]"},"categories":[23],"tags":[],"class_list":["post-1422","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-gouvernance-assemblee-generale"],"acf":[],"yoast_head":"\nAppointment of SAS corporate officers and primacy of bylaws | Alkeom<\/title>\n<meta name=\"description\" content=\"Two rulings issued on 9 July 2025 clarify the hierarchy of rules governing the appointment of a corporate officer in a French SAS\u2026\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.alkeom.law\/en\/corporate-officers-mandates-the-companys-bylaws-prevail-over-shareholders-resolutions-and-contractual-arrangements\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Appointment of SAS corporate officers 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