Primacy of SAS statutes: a firm limit set by the Court of Cassation
In a ruling dated 9 July 2025 (No. 24-10.428), the Court of Cassation emphatically reiterated that the articles of association of a simplified joint stock company (SAS) alone determine the conditions for managing the company, in particular the procedures for dismissing its directors.
The facts:
At a general meeting, the shareholders of an SAS appointed a chief executive officer, stipulating in an agreement appended to the minutes that he could not be dismissed without just cause, contrary to the articles of association, which allowed for dismissal ad nutum. Less than a year later, the CEO was dismissed without cause and claimed compensation. The Court of Appeal ruled in his favour, considering that the unanimous decision of the shareholders validly derogated from the articles of association. The Court of Cassation censured this analysis.
The decision:
A decision by the shareholders may certainly supplement the articles of association, but it may never derogate from them, even if taken unanimously at a general meeting.
Consequently, a decision adopted by the shareholders at a general meeting, which provides for compensation for dismissal contrary to the articles of association, is not enforceable against the company if it has not given rise to a genuine amendment to the articles of association.
This case law, which on closer reading may give rise to some criticism, marks a new stage: after ruling out the derogatory value of extra-statutory acts with regard to the terms and conditions for dismissing a director of an SAS, the Court of Cassation is now extending this prohibition to corporate decisions themselves, even if they were taken unanimously (i.e. under conditions that would in any case allow the articles of association to be amended).
Practical consequence:
Any SAS director who wishes to secure their terms of office (compensation, protection in the event of dismissal, etc.) must require an amendment to the articles of association. Otherwise, they will not be able to invoke collective decisions that are contrary to the articles of association, even if they are unanimous.
However, this rigour, intended to guarantee the primacy of the articles of association, risks complicating the flexibility appreciated in SAS companies by requiring repeated amendments for each specific situation.
Gramond assists companies and their directors in anticipating and securing these issues. For more information, please do not hesitate to contact us to discuss them.