Under French law, a partner`s contract is simply a contract. There are no special formalities that apply to such an agreement. However, it is binding only on the contracting parties under contract law. A shareholders` agreement generally provides that it is mandatory for the transferors of the shareholders who are signatories to the agreement or for the holders of new shares issued by the company. In order to improve the applicability and practical implementation of these provisions, they are often accompanied by provisions obliging the company to require, as a precondition for the issue of new shares or the inclusion of shares in the company`s share statements, that the new shareholder or buyer is not bound by the shareholder agreement. – Powers of devaluation in favour of investors: multiple right of veto, right of veto, right of notification in addition to all the rights mentioned here. In France, it is now possible to ensure the control of minority shareholders over the company through a shareholders` agreement (either through voting rights or guarantees). – guarantees such as dilution protection clauses in favour of certain shareholders. – Directors, shareholders and obligations of the company The subject of a shareholders` agreement in France is generally limited to matters related to the management and management of the company and the management of the rights and obligations of shareholders vis-à-vis the company and other shareholders: all preferential rights of investors (priority dividends, multiple votes, veto rights, etc.) would then be mentioned in the company`s articles of association, which makes them public and enforceable against third parties. The shareholders` agreement would limit its scope to more confidential information, such as the business plan or the expected internal performance.
Not all forms of company allow such pejorative rights for the benefit of a given shareholder. The legal form “SAS” is today one of the most used vehicles in private equity agreements, as it offers a high degree of freedom in the organization of management and the conditions of reception or departure of a partner. The statutes of an SAS may (i) provide for clauses relating to pre-emption, (ii) tag-along and dragalong rights, iii) qualified majorities necessary for certain decisions, iv) ad hoc decision-making bodies and v) a right of withdrawal or a procedure for the expulsion of partners. Shareholder agreements are widely used in France, especially in private equity transactions. .