Cass. com., 9 July 2025, No. 24-10.428 and No. 23-21.160

The Court of Cassation has clarified in two rulings the limits and links between statutory provisions and extra-statutory commitments regarding the dismissal of directors in french SAS companies. In SAS companies, the articles of association cannot be circumvented – but the partners may enter into additional commitments outside the articles of association and outside the scope of a general meeting decision.

1. Dismissal ad nutum: when the articles of association take precedence over everything else

In case no. 24-10.428, Mr L.-V. was appointed managing director of the company Ile-de-France démolition by a combined general meeting on 2 October 2019. This meeting unanimously adopted an appendix specifying the specific and restrictive conditions for the dismissal of the managing director, explicitly deviating from the initial articles of association, which provided for dismissal ‘ad nutum’ (or dismissal without cause).

On 26 June 2020, Newco Green Holding, acting as chair of Ile-de-France démolition, dismissed Mr L.-V. without giving any specific reason. Mr L.-V. challenged his dismissal in court, claiming compensation for dismissal without just cause on the basis of the appendix adopted by the general meeting.

The Paris Court of Appeal initially ruled in his favour, considering that the appendix, although not part of the articles of association, was binding because it had been adopted unanimously.

The Court of Cassation overturned this ruling, clearly reiterating the absolute primacy of the provisions of the articles of association:

‘It follows from these texts that the articles of association of a simplified joint stock company lay down the conditions under which it is managed, in particular the procedures for dismissing its directors. While a decision of the shareholders may supplement the articles of association on this point, it cannot derogate from them, even if it was taken unanimously.’

It then added:

« By ruling thus, when the collective decision of the shareholders organising the conditions for dismissal differently, even if taken unanimously, could not validly contradict Article 23.2 of the articles of association expressly providing for the dismissal ad nutum of the managing director, the Court of Appeal violated Articles L. 227-1 and L. 227-5 of the Commercial Code. « 

Only the articles of association define the conditions for dismissal. Any derogation requires a formal amendment to the articles of association.

The high court thus reaffirms a fundamental rule: statutory rules are binding and exclusive in the organisation of the governance of SAS companies. Resolutions, annexes or collective decisions have no legal effect if they contravene the articles of association.

To accept the opposite would be to allow instability in the statutory framework depending of meetings that derogate from the articles of association and would make the rules applicable to the life of the company less clear.

2. Personal commitment: the parallel path of contractual flexibility

On the same day, ruling n°23-21.160 demonstrates that extra-statutory personal commitments remain a fully open option for modulating the relationship between shareholders or with the director, without calling into question the articles of association of the SAS.

In this case, Mr O. had been appointed managing director of Sogecler by the sole shareholder, with the guarantee of a lump-sum indemnity provided for in a resolution in the event of early dismissal. At the same time, in an investment agreement signed on the same day, the majority shareholders (Messrs B., L. and the company Troizef) had personally undertaken to ensure this appointment and to provide for such compensation in the appointment decision.

Dismissed before the expiry of the agreed period, Mr O. claimed the payment of the compensation provided for from Sogecler and the majority shareholders.

The Court of Appeal of Nancy dismissed the claim on the grounds that this commitment was incompatible with the articles of association, which provided for dismissal without compensation.

Once again, the Court of Cassation overturned the appeal decision. A personal commitment made by partners or third parties is not subject to statutory rules, as it does not bind the company itself.

For the Court of Cassation, « this extra-statutory provision contains only a personal commitment by the signatories of the investment protocol to take the necessary steps to ensure that the decision to appoint Mr. [O] as managing director of Sogecler provides for the payment of a lump-sum compensation in the event of his dismissal or reduction of his powers before the expiry of a two-year period, so that it is not contrary to Article 16 of Sogecler’s articles of association« .

This ruling therefore clearly distinguishes between the internal regime of the SAS (governed by the articles of association) and the private contractual regime between persons related to the SAS. It reinforces the scope of extra-statutory commitments by affirming their effectiveness, provided that they do not encroach on the prerogatives of the company or on the statutory management arrangements.

3. Two decisions, one clear rule

These two rulings, handed down on the same day, shed light on each other and provide a useful framework for practice.

The articles of association form a basis that guarantees legal certainty and transparency for third parties, while extra-statutory commitments allow for contractual customisation between partners or investors, in private and voluntary areas.

Commitments that derogate from the articles of association cannot be made by a decision of the general meeting, but they can be made by one or more partners in a separate agreement or contract.

A combined reading of these two decisions leads to the conclusion that extra-statutory acts may contain commitments that differ from the rules laid down in the articles of association, but that a decision of the general meeting cannot constitute an exceptional derogation from the articles of association, even if it was taken unanimously.

This solution must be approved because allowing a derogation from the rules of the articles of association by a collective decision of the partners would create legal uncertainty, particularly for new shareholders or third parties, and a lack of clarity in the company’s rules.

The rules of the articles of association prevail. If all the partners agree to change the rules, they must therefore amend them, but they cannot derogate from them by a decision of the general meeting.

On the other hand, if a shareholder wishes to make a personal commitment that is additional to the articles of association, they may do so, but only by means of a separate contract.

Conclusion

This solution has an impact on company law practitioners, but also on directors and investors.

The Commercial Chamber’s desire for clarification for educational purposes is to be welcomed.

SAS companies offer considerable statutory freedom, but this freedom is governed by formal requirements, which the Court of Cassation has opportunely reiterated.

The articles of association are the legal foundation of the company and are intangible unless formally amended.

Extra-statutory commitments are useful and effective instruments for protection or negotiation between partners, provided that they are clearly distinct from the statutory rules and carefully drafted.

Dismissing a director? Not without reading the articles of association. But also… not without rereading the contractual commitments.

By Olivier Vibert

Partner at KBESTAN, a law firm specialising in company law, employment law and commercial law in Evreux and Paris.