Unauthorised remuneration of a SARL manager: summary proceedings

A manager (gérant) of a SARL (French private limited company) who pays themselves remuneration that is neither provided for in the articles of association nor voted by the shareholders causes the company damage the compensation of which is not open to serious dispute. The commercial chamber draws a direct consequence from this: the judge hearing summary proceedings (référé) may award an interim payment to the company, on the basis of Article 873, second paragraph, of the French Code of Civil Procedure.

The essentials

• The remuneration of the manager of a limited liability company is determined either by the articles of association or by a decision of the shareholders as a body.
• Where the manager has paid themselves remuneration without either of those two bases, the obligation to compensate the resulting damage to the company is not open to serious dispute.
• A shareholder bringing the derivative liability action (action sociale en responsabilité) may seek compensation for the entire damage suffered by the company, damages being awarded to the company.
• A serious dispute as to the substance of the right does not prevent the judge hearing summary proceedings from ordering protective or restorative measures.
• A judge before whom such measures are sought must assess the manifestly unlawful character of the disturbance or the existence of the imminent harm relied on.

Unauthorised remuneration of a SARL manager

The commercial chamber holds that the obligation to compensate the damage arising from a manager's remuneration paid without any basis in the articles of association or any decision of the shareholders is not open to serious dispute (Com., 11 March 2026, No. 24-15.111). Two shareholders had incorporated a limited liability company in August 2019, each holding half of the share capital, one of them being appointed manager. The non-managing shareholder claimed to have discovered that the manager had been allocating themselves, since 1 January 2020, substantial and unauthorised payments in respect of their duties.

On 30 September 2022, the shareholder brought summary proceedings against the manager and the company, seeking an order that the manager repay those sums to the company. The judge hearing summary proceedings in the commercial chamber of the tribunal judiciaire (first-instance civil court) of Strasbourg ruled by order of 8 February 2023. The court of appeal overturned that order, found that there was a genuine and serious dispute and held that there was no ground for summary proceedings (CA Colmar, 13 March 2024, No. 23/00791).

In order to refuse any interim payment, the court of appeal held that the manager kept the company alive through their work and that the whole of the unauthorised remuneration could not in itself cause damage to the company. The commercial chamber quashes that reasoning, on the basis of Articles L. 223-18 and L. 223-22 of the French Commercial Code and Article 873, second paragraph, of the French Code of Civil Procedure, in the following terms (free translation).

It follows that where the manager has paid themselves remuneration although it was determined neither by the articles of association nor by a decision of the shareholders as a body, the obligation to compensate the resulting damage suffered by the company cannot be regarded as open to serious dispute.

The court of appeal had nevertheless found that this remuneration had been authorised neither by the articles of association nor by a decision of the shareholders as a body. It therefore failed to draw the legal consequences of its own findings. The commercial chamber also quashes the dismissal of the other applications – a prohibition on paying any remuneration before prior authorisation by the general meeting, and disclosure of documents – on the basis of Article 873, first paragraph, of the French Code of Civil Procedure.

the mere finding that there is a serious dispute as to the substance of the right is insufficient to justify refusing the measures provided for by Article 873, first paragraph, of the French Code of Civil Procedure

The quashing is partial: it affects the decision only in so far as it finds the existence of a genuine and serious dispute and holds that there is no ground for summary proceedings. The case and the parties are remitted to the court of appeal of Metz. Several limbs of the two grounds of appeal were not considered such as to lead to a quashing and therefore received no reasoned answer.

What the shareholder may seek from the judge hearing summary proceedings

A shareholder of a SARL may obtain, in summary proceedings, an interim payment for the benefit of the company where the manager has paid themselves remuneration fixed neither by the articles of association nor by the shareholders. Article L. 223-22 of the French Commercial Code, whose wording the decision reproduces, entitles a shareholder bringing the derivative liability action to seek compensation for the entire damage suffered by the company. Damages are, where appropriate, awarded to the company. The shareholder acts for the company's assets, not on their own account.

The argument based on the usefulness of the manager's work is not enough to block the application. The court of appeal had objected that the manager generated the company's turnover and profit through their activity. The commercial chamber rejects that ground: it does not render open to serious dispute the obligation to compensate arising from remuneration paid without any decision under the articles of association or by the shareholders.

The second avenue opened by the decision is distinct from the interim payment. Even where a serious dispute exists, the judge hearing summary proceedings may order the protective or restorative measures required, either to prevent imminent harm or to put an end to a manifestly unlawful disturbance. Those two situations are alternatives. The judge must examine the disturbance or the harm relied on, rather than stopping at the finding of a serious dispute.

Two distinct bases for bringing summary proceedings

The decision confirms the separation between the interim payment and protective measures, and deprives managers of a frequent line of defence. A manager can no longer rely on their contribution to the company's business to turn the payment of unauthorised remuneration into a serious dispute. As the case law stands on 11 March 2026, the finding that there is no clause in the articles of association and no collective decision is enough to rule out any serious dispute as to the obligation to compensate.

Several questions remain open after this decision. The commercial chamber does not settle the admissibility of the derivative action brought by the shareholder, which the court of appeal had listed among the disputed points. The decision fixes no amount of interim payment: the court to which the case is remitted will assess the applications, including those concerning the disclosure of documents and the prohibition on any payment without prior authorisation by the general meeting.

Setting and documenting the manager's remuneration

The lawfulness of the payment is prepared upstream: the manager's remuneration must appear in the articles of association or result from a decision of the shareholders as a body. A clause in the articles of association sets out the principle and the terms of the remuneration. Failing that, a collective decision must be taken and then recorded in dated minutes. Consistency between the sums actually paid and the decision voted deserves regular checking, particularly where the manager is also the person who authorises the payments.

For a shareholder who discovers unvoted payments, the approach is built on documents. The articles of association, the minutes of meetings and the accounting records make it possible to establish the absence of a decision. The choice of basis then matters: an interim payment presupposes an obligation not open to serious dispute, whereas a protective or restorative measure requires a manifestly unlawful disturbance or imminent harm to be established.

Checks to carry out before any payment to the manager

• Check that the articles of association contain a clause fixing the manager's remuneration, or that a decision of the shareholders as a body has set it.
• Keep the minutes of the collective decision and reconcile the payments actually made with its content.
• In a company held in equal shares, anticipate how the remuneration is to be voted before disagreement arises.
• For a shareholder bringing a challenge, gather the articles of association, the minutes and the accounting records before applying to the judge hearing summary proceedings.
• Identify the appropriate basis: an interim payment for the benefit of the company, or a protective or restorative measure justified by a manifestly unlawful disturbance or imminent harm.