The plenary assembly of the French Supreme Court (Cour de cassation) has ruled on the validity of statutory clauses governing the conditions for the adoption of ordinary resolutions in simplified joint stock companies (SAS).
In the case at hand, the shareholders of a simplified joint stock company (SAS) had passed a resolution to increase the company’s capital with 46% of the votes in favor, in accordance with the articles of association. The Paris Court of Appeal upheld this decision, citing article L. 227-9 of the French Commercial Code, on the grounds that “ the shareholders of an simplified joint stock company are free to determine, in the bylaws, not – in the absence of express provisions – a majority rule required to adopt resolutions in the matters listed therein, but the conditions under which decisions must be taken collectively, whether in matters defined by the bylaws or referred to in paragraph 2 thereof ”.
The French Supreme Court (Cour de cassation) overturned the appeal ruling, citing articles 1844 (paragraph1) and 1844-10 (paragraphs2 and3) of the French Civil Code and L. 227-9 (paragraphs1 and2) of the French Commercial Code:
“[t]he collective decision of the shareholders of a simplified joint-stock company, provided for in the articles of association or imposed by law, can only be validly adopted if it obtains at least a majority of the votes expressed, any contrary clause in the articles of association is deemed unwritten”.
The freedom granted to the shareholders of a simplified joint stock company to set the conditions under which collective decisions are taken is not unlimited: a collective decision within a simplified joint stock company can only be adopted if it obtains a majority of the votes expressed.
