FRANCE Law and Practice Contributed by: Sophie Vermeille, Vermeille & Co
10. Shareholders’ Remedies 10.1 Remedies Against the Company
for breaches of law, violations of the articles of association, or mismanagement ( faute de gestion ). • Standing: there is no minimum shareholding requirement. Any shareholder has standing to bring the claim, regardless of the size of their stake. • Standard of review: in theory, the concept of faute de gestion is broad and not protected by a doctrine equivalent to the US business judgement rule. In practice, however, French courts exercise restraint and rarely second-guess business decisions absent manifest wrongdoing. • Practical use: derivative suits remain rare in France, in both listed and non-listed companies, due to the limited development of fiduciary duties and the absence of a strong litigation or class action culture. 11. Shareholder Activism 11.1 Legal and Regulatory Provisions Shareholder activism in France is increasingly rec- ognised, although still less developed than in Anglo- American jurisdictions. On paper, French law is relatively favourable to share- holders: they enjoy extensive rights at general meet- ings, the ad nutum removal of board members, and statutory inspection rights for minority shareholders. In practice, however, difficulties arise at the level of the tribunaux de commerce , whose non-professional judges are elected by their peers within local cham- bers of commerce and are thus often perceived as being more favourable to companies than to investors. The main barrier is therefore less legislative than cul- tural, reflecting a reluctance to view minority share- holder activism as a legitimate and long-term benefit to companies, including for employment and govern- ance stability. This perception has started to shift, with the financial press increasingly taking a stance in favour of minority investors. Therefore, persistent obstacles lie more in the enforce- ment and interpretation of the law than in the law itself. They include restrictive case law on the abil- ity of shareholders to convene general meetings at
Shareholders in France may bring certain legal actions against the company, although remedies are narrower than in some other jurisdictions. • Direct actions: a shareholder with a legitimate inter- est ( intérêt à agir ) may sue the company if they suf- fer personal harm distinct from that of the company as a whole (eg, misleading information in a pro- spectus, misrepresentation in financial reporting). • Annulment of resolutions: shareholders may seek annulment of general meeting decisions adopted in breach of the law or the articles of association. The trend in recent reforms (notably the 2025 ordon- nance ) is to narrow annulment grounds to enhance legal certainty. • Enforcement of information rights: shareholders may obtain judicial enforcement of statutory rights of information, such as access to documents before a general meeting. 10.2 Remedies Against the Directors Shareholders may bring legal actions against direc- tors or officers, but only under limited circumstances. A shareholder can sue in their own name where they have suffered a personal and distinct harm separate from that of the company. For example, if directors approved false or misleading accounts, shareholders who acquired shares during the period of misrepre- sentation may claim that their investment decision was harmed by the dissemination of inaccurate infor- mation. 10.3 Derivative Actions French law expressly allows shareholders to bring a derivative action ( action sociale ut singuli ) on behalf of the company. This mechanism is available where the company itself has suffered harm, typically as a result of wrongful acts by its directors or officers. • Scope: the action is limited to claims against com- pany directors and officers (eg, board members, managing directors, members of the management board). Shareholders may seek to hold them liable
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