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For a French SARL (limited liability company) incorporated after the law of 2 August 2005, amendments to the articles of association must be decided by at least a two-thirds majority of the shares held by the partners present or represented. A clause in the articles of association setting a lower threshold (as in this case with a majority of more than 50%) is unlawful and renders decisions taken on this basis null and void.
Court of Cassation, Commercial, Financial and Economic Chamber, 5 November 2025, Nos. 23-10.763 and 23-12.302
The facts: a capital increase adopted by 60% of the votes
Iviflo, a limited liability company created in 2007 by two partners, Mr [A] (60% of the shares) and Mr [B] (40%), decided at an extraordinary general meeting on 24 June 2020 to increase its share capital.
The resolution was adopted by a 60% majority, in accordance with Article 8 of the articles of association, which allowed any change in capital ‘by decision of the partners representing at least half of the shares’.
Mr [B], a minority shareholder who opposed the decision, sued the company and Mr [A] to have the resolution and subsequent acts annulled on the grounds that this clause in the articles of association was contrary to Article L. 223-30 of the Commercial Code.
The Paris Court of Appeal ruled in his favour, annulling the resolutions and ordering the amendment of the articles of association and entries in the commercial register.
The directors and the company then lodged two joint appeals before the Court of Cassation.
The question: can the articles of association provide for a majority lower than two-thirds?
The appellants invoked Article L. 223-30 of the Commercial Code, as interpreted after the law of 2 August 2005 in favour of SMEs.
According to them, for companies incorporated after this law, the articles of association could freely set the majority for amendments to the articles of association, including a majority lower than two-thirds.
Only unanimity was expressly prohibited by the text, according to the appeal.
They therefore argued that their statutory clause, setting the majority at 50%, was perfectly lawful.
The solution: a two-thirds majority is a mandatory threshold
The Court of Cassation dismissed the appeals and upheld the position of the trial judges:
“It follows from Article L. 223-30 of the Commercial Code, in its applicable wording, that, for limited liability companies formed after the publication of Law No. 2005-882 of 2 August 2005 in favour of small and medium-sized enterprises, amendments to the articles of association other than a change of nationality are decided by a two-thirds majority of the shares held, with the articles of association being able to provide for a higher majority without requiring unanimity among the members.”
In other words, the Act of 2 August 2005 certainly introduced procedural flexibility (reduced quorum, majority of those present or represented), but it also set a legal minimum of two-thirds, below which no clause in the articles of association may derogate.
The statutory clause of Iviflo, providing for a majority of 50%, is therefore unlawful, and the resolution adopted on this basis is null and void.
Immediate application of the 2019 law on nullity
The directors also argued that the penalty of nullity for corporate decisions taken under the law of 19 July 2019 (No. 2019-744) could not apply to a company created before that date.
The Court rejected this argument:
“The purpose and effect of the last paragraph of Article L. 223-30 of the Commercial Code, resulting from the law of 19 July 2019, is to govern the legal effects of the articles of association. It therefore applies to all corporate decisions taken from the date of its entry into force, regardless of the date of incorporation of the company. ”
In other words, it does not matter whether the company was created before 2019: once a decision has been voted on after that date, the nullity provided for in the text may be invoked.
A company, and more specifically a limited liability company (SARL), is not limited to the will of its partners, but is also subject to economic public policy, which must be respected.
Its articles of association cannot override the mandatory operating rules laid down by the Commercial Code.
Three major lessons can therefore be drawn from this decision:
- Limited liability companies (SARLs) incorporated after 2005 must comply with a two-thirds majority threshold for any amendment to the articles of association (increase or reduction in capital, change of purpose, etc.);
- If the articles of association contravene these mandatory rules with more permissive clauses (e.g. 50% or 60% majority), these clauses will be deemed unwritten;
- Decisions taken on the basis of clauses that contravene the mandatory rules may be annulled at the request of any interested party, including a minority shareholder.
For limited liability companies, it is therefore essential to ensure that the majority requirements for meetings to amend the articles of association are compliant in order to avoid the risk of nullity. Any clause with a majority lower than two-thirds will create a significant risk for the governance of the company at extraordinary general meetings.
By Olivier Vibert,
Partner