The nullity of a share transfer in a SAS (French simplified joint-stock company) that breaches a pre-emption clause in the articles of association does not require any fraudulent collusion between the transferor and the transferee. The commercial chamber so holds on the basis of Article L. 227-15 of the French Commercial Code. In the case decided, the articles of association organised pre-emption and sanctioned its breach with nullity, and the transfer had taken place without the shareholders being given the opportunity to pre-empt.
The essentials
- The annulment of a share transfer in a simplified joint-stock company (société par actions simplifiée) that breaches a clause of the articles of association does not require proof of a fraudulent agreement between the transferor and the transferee.
- In the case decided, two cumulative elements were enough: articles of association setting up a pre-emption right and sanctioning its breach with nullity, and a transfer carried out without the shareholders being given the opportunity to pre-empt.
- The court of appeal held that the annulment of the transfer retroactively deprived the buyer of its status as a shareholder on the date of the later meetings.
- A general meeting may be annulled on account of that buyer's participation only if that participation is genuinely established: a judge cannot find such participation against the clear terms of the minutes.
What facts led to the annulment of the transfer?
The commercial chamber upholds the annulment of a share transfer carried out in disregard of the pre-emption right laid down in the articles of association, without requiring proof of fraudulent collusion (Com., 8 July 2026, No. 25-11.354). The share capital of a simplified joint-stock company was held by a company incorporated under Luxembourg law, an individual shareholder and a third company. On 2 December 2020, the Luxembourg shareholder transferred all of its shares to another Luxembourg company, a third party to the issuing company. The shareholder left out of the transaction brought proceedings against the transferor, the issuing company and the individual shareholder seeking the nullity of the transfer and of the later general meetings.
The decision under appeal (CA Versailles, 19 November 2024, No. 23/05073) declared the transfer of 2 December 2020 void and annulled two general meetings, those of 21 December 2020 and 22 August 2022. The claimants in the appeal to the Cour de cassation (France's highest civil court) argued that the nullity of a share transfer in a SAS requires collusion between the transferring shareholder and the third-party buyer. The commercial chamber rules out that condition (free translation):
It follows from Article L. 227-15 of the French Commercial Code that the annulment of a share transfer in a simplified joint-stock company on the ground that it conflicts with a clause of the articles of association is not subject to proof of fraudulent collusion between the transferor and the transferee.
The court of appeal had noted that Article 16 of the articles of association confers on the shareholders a pre-emption right in the event of a transfer of shares, and that Article 23 sanctions with nullity any transfer carried out in breach of that right. It had found that the disputed transfer had taken place without the shareholders being given the opportunity to exercise their pre-emption. The commercial chamber holds that it correctly inferred from this that the transfer was void.
The quashing, which is partial, concerns another ground. The decision of 19 November 2024 is quashed in so far as it annuls the general meeting of 22 August 2022 and rules on court costs and Article 700 of the French Code of Civil Procedure. The minutes of that meeting established that the transferee company had not taken part in it: the court of appeal distorted the clear and precise terms of that document. The case is remitted on these points to the Versailles court of appeal, differently constituted. The other complaints did not warrant a specifically reasoned decision.
What the ousted shareholder must establish
A shareholder deprived of its pre-emption does not have to prove an agreement between the transferor and the buyer: it establishes the clause of the articles of association and its breach. The burden of proof is thereby lightened decisively. Proving a fraudulent concert between two companies means gaining access to their internal exchanges, which a minority shareholder rarely obtains. Establishing that no prior notification was sent to it involves, by contrast, negative facts that are easy to articulate around the corporate documents.
On the buyer's side, the exposure is real. The court of appeal held that the nullity of the transfer meant that it had to be treated retroactively as not having the status of shareholder on the date of the later meetings. A buyer acting in good faith, unconnected with any scheme, therefore finds no protection against annulment in its ignorance. Its participation in the collective decisions taken in the meantime becomes fragile, as do the transactions flowing from them.
What are the consequences for share transfers in a SAS?
The ruling clarifies the sanction attached to pre-emption clauses in the articles of association of a SAS, without settling the fate of collective decisions already taken. As the case law stands on 8 July 2026, the nullity of a transfer that conflicts with the articles of association of a simplified joint-stock company does not run up against a requirement of fraudulent collusion. The drafting of the articles of association thus regains its full effectiveness: a pre-emption clause is not a mere undertaking whose breach would be resolved by compensation.
Contractual and evidential reflexes around pre-emption
In the case decided, nullity was expressly stipulated by the articles of association, alongside the pre-emption right. That link between the right granted and the sanction for circumventing it fed the reasoning of the court of appeal – which the commercial chamber approved – despite the fact that this sanction was already provided for in Article L. 227-15 of the French Commercial Code.
The second lesson concerns the documents. Annulling a collective decision on the ground that a person wrongly treated as a shareholder voted at it requires producing the corresponding minutes and checking the list of participants, including proxies. An application framed in general terms, covering all later meetings, risks an error of identification. A judge cannot find a participation that the document contradicts, and a decision that does so is liable to be quashed.
The checks to carry out before transferring shares
- Document in writing that each shareholder was given the opportunity to exercise pre-emption, shareholder by shareholder, before any transfer deed is signed.
- For the buyer, obtain proof that the procedure set out in the articles of association was complied with: good faith is no shield against annulment.
- For a shareholder challenging a transfer, identify precisely each meeting concerned and produce the minutes showing the transferee's participation.
Frequently Asked Questions
Is proof of collusion between the transferor and the buyer needed to have a share transfer annulled?
No. In its decision of 8 July 2026, the commercial chamber holds that annulling a share transfer in a simplified joint-stock company that breaches a clause of the articles of association does not depend on proof of fraudulent collusion between the transferor and the transferee. What must be established is the clause relied on, here a pre-emption right coupled with a sanction of nullity, and the fact that the shareholders were not given the opportunity to exercise it.
What happens to the buyer of the shares when the transfer is annulled?
The buyer loses its status as a shareholder. In the case decided, the court of appeal held that the nullity of the transfer meant it had to be treated retroactively as not holding that status on the date of the later general meetings. Good faith offers no protection against annulment, since no collusion needs to be shown. The collective decisions in which it took part may then be challenged.
Are general meetings held after an annulled share transfer automatically void?
No, annulment is not automatic. It requires proof that the buyer, now treated as a non-shareholder, actually took part. In the case discussed, the Cour de cassation quashed the annulment of a meeting of 22 August 2022 because the minutes of that meeting showed that the acquiring company had not attended. The case is remitted to the court of appeal, differently constituted, which will rule again on this point.
How can a company prove that a shareholder was invited to exercise pre-emption?
Proof is built before the transfer, never afterwards. As a rule, a written, dated notification sent individually to each shareholder holding the right, by a traceable means of dispatch, forms the backbone of the file. Replies received, waivers and failures to reply deserve to be archived with the transfer deed. Minutes of a general meeting or a signed waiver letter usefully strengthen that set of documents.
What should be checked in the articles of association before selling shares to a third party?
Three points deserve close and combined reading. First, whether a pre-emption right or an approval procedure exists, together with the formalities they impose. Next, the sanction that the articles of association attach to a breach of those clauses. Finally, the existence of shareholders' agreements outside the articles that may add undertakings between shareholders. A transfer concluded without following this route exposes both seller and buyer to long-running litigation.