Shareholders’ Rights & Shareholder Activism 2025 Comparisons

In France, the main corporate forms include the following.

Publicly Listed Companies

For publicly listed companies, French law requires the use of either a société anonyme (SA) or a société en commandite par actions (SCA).

• The SA is the standard corporate form for listed companies. It may be organised under either a single-tier system with a chair/CEO and board of directors, or a two-tier system with a management board (directoire) and supervisory board (conseil de surveillance). In practice, shareholders in an SA play a relatively limited role in day-to-day management, with decision-making concentrated in the board, reflecting a strict statutory separation of powers.
• The SCA combines two categories of members: general partners, who are personally liable for the SCA’s debts (though in practice this liability is usually neutralised, as the general partner is often a shell limited liability company with minimal capital); and limited partners, who are ordinary shareholders. Historically, the SCA was sometimes used by listed companies as a defensive structure against hostile takeovers, but it has been in clear decline of late, illustrated by the recent conversion of Lagardère from an SCA into an SA.

Privately Held Companies

The most common form of privately held company is the société par actions simplifiée (SAS), which is valued for the high degree of contractual freedom it affords in structuring governance and shareholder arrangements. Unlike the SA, where governance is tightly regulated, the SAS allows parties to tailor almost every aspect of decision-making – who manages, what requires shareholder approval, and what thresholds apply.

The SAS is often compared to a US LLC because of its high degree of contractual freedom in structuring governance. However, it remains legally a corporation (société par actions), subject to certain statutory rules and corporate law concepts that do not exist for LLCs.

For listed companies, foreign investors invariably invest through an SA. The SA is the only real vehicle available on the French market for public companies and is broadly comparable to a US corporation in this respect. Unlike Delaware corporations, however, the SA leaves very little room for contractual freedom: governance rules, shareholder rights and disclosure obligations are largely fixed by statute, with relatively limited ability to customise them in the articles of association.

For private companies, the SAS is by far the preferred vehicle for foreign investors, including private equity funds and joint ventures. The SAS offers wide contractual freedom to tailor governance and shareholder rights, somewhat similar in spirit to the flexibility found in US LLC operating agreements. However, it remains a corporation under French law, subject to certain mandatory corporate law rules and corporate taxation. This combination of flexibility and corporate status explains its widespread use in cross-border transactions.

For listed companies (SA), the common class of shares is ordinary shares, which generally carry voting rights, information rights and proportional financial rights. These rights are mainly set out in the French Commercial Code and the French Monetary and Financial Code. In practice, non-voting preference shares are rarely used in listed French companies, even though they are permitted within certain limits by law.

For private companies (SAS), the regime is far more flexible. While ordinary shares are common, companies frequently issue preference shares with customised voting, information and financial rights tailored to shareholders’ needs.

As a general rule, French law follows the principle of “one share, one vote” , with the following exceptions.

• A 2024 reform now allows multiple voting rights in listed companies at the time of an initial public offering, subject to strict safeguards, including a mandatory sunset clause. It remains to be seen how widely this practice will be adopted in France.
• French law automatically grants double voting rights to shareholders who have held their shares in registered form for at least two years, unless expressly disallowed in the company’s by-laws. In practice, these “loyalty shares” are rarely disallowed – the main exceptions being large-cap companies without a controlling shareholder that seek to attract foreign investors. As a result, the regime tends to reinforce the position of French controlling shareholders, which remain common in listed companies (including the French State in certain strategic issuers). For foreign institutional investors, the benefit is largely illusory: because they typically hold shares through custodians and not in registered form, they do not qualify for double voting rights. This asymmetry is a major concern for many cross-border investors.

The rights attaching to shares are set out in the French Commercial Code and in the company’s articles of association.

Shareholders’ rights may only be varied through an amendment to the company’s articles of association, approved by at least a two-thirds majority of the votes. However, unlike in common law jurisdictions, the scope for such variation is more limited.

• Many shareholders’ rights in an SA are mandatory under French law, such as the right to participate in general meetings, voting rights and basic information rights. These rights are statutory in nature and cannot be waived or overridden by the articles of association.
• Flexibility exists primarily in relation to preference shares (actions de préférence). Their financial or voting rights may be customised, but any modification requires not only the extraordinary general meeting’s approval but also the consent of the affected class of shareholders, voting separately.
• Where rights arise from a shareholders’ agreement (typically in an SAS), they may only be varied with the individual consent of the contracting shareholder(s).

For an SA, the minimum share capital is EUR37,000.

For an SAS, there is no significant statutory minimum, but the legal requirement is EUR1.

For an SA, the minimum number of shareholders is two for unlisted companies and seven for listed companies.

For an SAS, there is no statutory minimum beyond one shareholder (single-shareholder SAS are permitted).

French law does not require any shareholders to be resident in France for either form.

In France, shareholders’ agreements are widely used for private companies, particularly in joint ventures and private equity transactions. In practice, there is a tendency to include as little as possible in the articles of association and as much as possible in the shareholders’ agreement, for confidentiality reasons. However, for enforceability against third parties, certain provisions – notably transfer restrictions – must be included in the articles of association.

Typical provisions include transfer restrictions, exit arrangements (tag-along/drag-along rights), governance rights, financing clauses, non-compete and confidentiality undertakings, and dispute resolution mechanisms.

Shareholders’ agreements are generally enforceable between the parties. However, French courts exercise substantive control over certain clauses and may strike down provisions deemed contrary to mandatory corporate law or public policy. In particular, the French Supreme Court (Cour de cassation) has consistently invalidated so-called “leonine” clauses – for example, provisions that would allocate all profits to one shareholder, exempt a shareholder entirely from losses, or allow the forced sale of shares at a purely nominal or manifestly inadequate price.

As a result, while exit and forced transfer clauses are common, they must be carefully structured to withstand judicial scrutiny, typically by providing for an objective or fair market value mechanism. This makes it especially important to seek tailored legal advice when drafting such agreements, as US-style flexibility cannot always be replicated in France.

In SAs, shareholders’ meetings are the mandatory vehicle for all collective shareholder decisions. This is a statutory obligation and cannot be waived.

French law requires that all SAs, whether listed or unlisted, hold an annual general meeting (AGM) to approve the annual accounts, allocate profits (including dividends), and appoint or renew directors and statutory auditors, as required.

In addition, companies must hold extraordinary general meetings (EGMs) to decide on matters expressly reserved by law – most importantly, any amendment to the articles of association (including capital increases, mergers or demergers). The AGM/EGM distinction is mandatory and not subject to contractual modification. However, in practice, SAs (especially listed ones) usually convene a single “mixed” shareholders’ meeting each year, with two agendas – one for ordinary resolutions (AGM matters) and one for extraordinary resolutions (EGM matters). Separate EGMs may still be convened during the year for specific transactions such as capital increases or mergers, but these are much less frequent.

In SAS, written consultations may generally be used instead of physical meetings, except for matters that the law expressly reserves to the shareholders collectively. These include:

• approval of the annual accounts and allocation of profits;
• the appointment of statutory auditors;
• capital increases or reductions;
• mergers;
• demergers;
• dissolution;
• transformation into another corporate form; and
• amendments to the articles of association.

Notice Requirements

Notice periods ahead of an AGM vary depending on the corporate form, as follows.

• Unlisted SA: shareholders must be notified at least 15 days before the meeting, whether it is an ordinary or extraordinary general meeting. Unlike in other jurisdictions, shareholders in French SAs cannot waive statutory notice requirements, even unanimously.
• Listed SA: the same statutory 15-day rule applies, but it is supplemented by additional requirements specific to listed companies. In particular, a public notice must be published in the Bulletin des Annonces Légales Obligatoires (BALO), an official gazette published online, at least 35 days before the meeting. This is designed to ensure equal access to information for all shareholders.
• SAS: there is no statutory notice period. The articles of association freely determine the rules. However, case law requires that shareholders receive “reasonable” notice to safeguard their information and participation rights. With unanimous shareholder consent, the notice period can effectively be reduced to zero.

See 2.1 Types of Meeting, Notice and Calling a Meeting (Notice Requirements).

Under the French Commercial Code, shareholders holding at least 5% of the company’s voting rights may require the board to convene a general meeting. In theory, certain shareholder associations may also exercise this right under very strict statutory conditions, but these are rarely met in practice.

In listed companies, French case law has added a judicial “necessity” requirement, under which shareholders must demonstrate a legitimate and pressing reason, such as evidence of governance malfunction; a mere disagreement with management’s strategic direction is insufficient. In the Lagardere case, the court has even refused requests to convene a meeting by shareholders holding more than 40% of the voting rights, considering that the AGM already provides a forum for shareholder oversight.

Given the restrictive case law, it is often strategically preferable to wait until the next AGM to challenge management or launch a proxy fight. Attempting to force an early meeting exposes shareholders to a high risk of judicial rejection, even with significant shareholding levels.

Notice of General Meetings

All shareholders are entitled to receive notice of a general meeting.

• Unlisted companies: notice must be sent directly to shareholders in accordance with the articles of association.
• Listed companies:
1. shareholders whose shares are recorded in registered form (nominatif pur or nominatif administré) receive a direct convening notice; and
2. all other shareholders, including the vast majority of foreign institutional investors – who almost never register their shares in nominatif form – are legally deemed to have been notified through the publication of a notice in the BALO.

Information Rights

Under French law, shareholders’ information rights can be understood at three distinct levels.

• Statutory minimum for SAs and SAS: limited to access to annual accounts, management and statutory auditors’ reports, and general meeting documents (agenda, draft resolutions, supporting explanations, and information on board nominees).
• Contractual enhancement (unlisted companies): in SAS and other private companies, shareholder agreements often grant broader information rights (eg, periodic financial reports, access to budgets, inspection rights).
• Regulatory enhancement (listed companies): in listed SAs, shareholders benefit from a comprehensive disclosure regime under the French Commercial Code, the Monetary and Financial Code and the General Regulation of the French Financial Markets Authority (AMF).

Shareholders’ Right to Inspection

In SAs, shareholders benefit from statutory rights of access to certain documents. Before each general meeting, they may obtain the annual accounts, management and statutory auditors’ reports, the text and explanatory notes of draft resolutions, and information relating to board nominees. They are also entitled to receive the list of shareholders notified (within the 15 days preceding the meeting) and to obtain copies of the minutes and attendance sheets for the past three years.

For activists, however, these rights have important limitations. They do not grant access to the complete register of beneficial owners with their contact details. The French Commercial Code deliberately restricts the scope of inspection rights, and the GDPR further prevents disclosure of personal data such as names and contact details of shareholders. Unlike certain EU member states that have implemented the Shareholders’ Rights Directive to allow greater transparency for proxy solicitation, France has not made use of this option, preferring to prioritise data protection.

This structural constraint means that proxy contests in France are conducted primarily through the official meeting process and public debate, rather than through direct shareholder solicitation. Activists must carefully time their initiatives and leverage disclosure obligations to place their proposals before the general meeting.

Minority Shareholders’ Expert Investigation (Expertise de gestion)

Shareholders holding at least 5% of the share capital may petition the court to appoint an independent expert to review specific management operations. This requires:

• written questions submitted to the board; and
• no satisfactory response within one month.

The expert’s mission is limited to targeted acts of management and cannot amount to a permanent audit. Courts apply this restrictively: initiating a review requires legitimate suspicion of mismanagement or harm to the corporate interest, not mere disagreement with strategy.

In practice, the procedure is hard to use effectively. It can provide useful evidence to pursue liability actions against directors but rarely delivers broad transparency. Activists often combine this with pre-litigation evidentiary proceedings (Article 145 of the Civil Procedure Code), which are more flexible.

For listed companies, French law does not allow general meetings to be conducted entirely virtually. Since September 2024, listed companies are required to broadcast their shareholders’ meetings live on their websites, and to make a replay available afterwards. However, this webcast obligation must not be confused with a right to live remote voting: under French law, shareholders may only vote by correspondence, electronically in advance via a secured platform, or by proxy. Voting in real time during the meeting is not permitted, even though a few experimental cases have tested it on a pilot basis (such as one Amundi meeting managed by CACEIS).

For unlisted companies, the articles of association may authorise fully virtual meetings, provided that shareholders holding at least 25% of the share capital do not object. In all cases, shareholders are entitled to participate remotely through written or electronic means, even if the by-laws contain no specific provision on the matter. The convening notice must specify the procedures for such participation.

Quorum Requirements

French law sets statutory minimum quorum requirements for general meetings under the Commercial Code. At the first call, the quorum is 20% of shares with voting rights for an ordinary general meeting and 25% for an extraordinary general meeting. On the second call, there is no quorum requirement for ordinary meetings, while a 20% quorum applies to extraordinary meetings.

In practice, SAS by-laws typically set higher quorum thresholds than those applicable to SAs, reflecting the more contractual and often closely held nature of these companies.

Shareholders’ Proposals of Resolutions

In listed SAs, shareholders holding at least 5 % of the share capital (either individually or collectively) may request the inclusion of agenda items or draft resolutions in the notice convening a general shareholders’ meeting. This threshold is subject to a sliding scale where the percentage decreases as the company’s capital increases.

The request must be sent to the company’s registered office by registered mail or electronic means (with acknowledgment of receipt), including the proposed resolution(s) and a brief statement of reasons, and must be accompanied by an account-attestation proving shareholding as of the request date – and again two business days before the meeting.

In non-listed companies (especially SAS), the regime is more flexible: the articles of association and shareholders’ agreements determine whether shareholders can table proposals, the applicable thresholds, and the conditions for doing so. However, the statutory sliding-scale threshold of up to 5 % may serve as a guiding benchmark even in the context of an SAS.

In listed SAs, French law draws a strict distinction between resolutions that fall within the scope of an ordinary general meeting (AGM) and those that must be decided in an EGM. This division is mandatory and cannot be altered by the company’s articles of association.

• Ordinary resolutions (eg, approval of annual accounts, appointment/removal of directors, dividend distribution) are adopted by a simple majority of votes cast (ie, more than 50%).
• Extraordinary resolutions (eg, amendments to the articles of association, capital increases, mergers, demergers or dissolution) require a two-thirds supermajority of votes cast.

In non-listed companies, notably SAS, the regime is more flexible. The articles of association may freely determine which matters require shareholder approval (subject to a limited list of matters that the law reserves to shareholders, such as approval of annual accounts, capital changes, mergers, and transformation of the company). They may also set the type of resolution and voting thresholds for adoption, including the possibility of requiring higher thresholds than those provided by law.

However, the Cour de cassation has recently made clear that this flexibility has limits. The articles of association cannot authorise a minority of shareholders to adopt collective decisions; decisions must always be grounded in a majority rule principle, even if the definition of “majority” may be contractually adapted.

In SAs, the allocation of powers between the board of directors (or management board and supervisory board) and the shareholders is strictly prescribed by the French Commercial Code and constitutes a matter of public policy. Courts enforce this separation rigorously:

• matters reserved to the shareholders cannot be usurped by the board; and
• matters within the board’s remit cannot be decided by the shareholders.

Typical shareholder approvals include:

• ordinary matters (approved at the AGM by a simple majority of votes cast) – approval of the annual accounts, allocation of profits (including dividends), appointment or removal of directors, and appointment or renewal of statutory auditors; and
• extraordinary matters (approved at the EGM by a two-thirds majority of votes cast) – amendments to the articles of association, mergers, demergers, capital increases or reductions, or dissolution of the company.

In SAS, by contrast, the law grants shareholders broad contractual freedom to organise decision-making through the articles of association. This flexibility allows:

• the allocation of decision-making either to the general meeting or to management;
• veto rights for specific categories of shareholders (often reinforced by shareholders’ agreements); and
• bespoke voting thresholds tailored to the investor base.

Limits to Flexibility

Despite this contractual freedom, a core set of fundamental matters must always be decided collectively by shareholders under the Commercial Code. These include approval of accounts, allocation of profits, capital increases or reductions, mergers, changes of corporate form, and dissolution.

In listed SAs, shareholders must evidence ownership of their shares two business days prior to the meeting (the statutory “record date”). By contrast, in unlisted SA, proof of shareholding is assessed on the date of the meeting itself, unless the articles of association provide for an earlier reference date.

Shareholders who cannot attend may vote in advance (by mail or electronically if authorised in the by-laws) or appoint a proxy. Proxies may either designate a specific person (who must be a shareholder or the shareholder’s spouse) or be sent to the company without naming a proxy holder, in which case the proxy votes in line with the board’s recommendations.

In France, it is important to distinguish between (i) agenda items that may be placed on the order of business of a shareholders’ meeting and (ii) resolutions that are formally submitted to a vote.

In SAs, a recent court decision has taken a strict view of the statutory separation of powers between the shareholders’ meeting and the board of directors. The commercial court of Nanterre has held that even a purely advisory resolution – in that case, recommending the separation of the CEO and chair functions – could not validly be put to a shareholder vote, as it concerned the conduct of the company’s business, which falls within the exclusive competence of the board. By extension, any proposed resolution – whether binding or advisory – that interferes with the board’s managerial prerogatives is inadmissible.

Shareholders may nevertheless request the inclusion of agenda items relating to matters falling within the board’s jurisdiction, but such items will only give rise to a discussion during the meeting, not to a vote. This leaves shareholders with significantly narrower tools than in jurisdictions where advisory “say on strategy” votes are more common.

In SAS, the regime is more flexible. The articles of association and, where applicable, shareholders’ agreements may grant shareholders broader rights to require that specific matters be submitted to their vote (whether binding or consultative), including issues that, in a listed SA, would normally fall within the board’s exclusive authority.

In France, a shareholder may challenge a resolution passed at a general meeting, but only on narrow grounds. The shareholder must show both standing (a legitimate interest to act) and a procedural defect, such as breach of the French Commercial Code or the company’s articles of association (eg, defective notice, quorum or voting irregularities).

Unlike in common law systems where courts may review the substance of shareholder decisions under fiduciary duty or “unfair prejudice” doctrines, French courts do not review the merits of resolutions. They will not annul a resolution simply because it is considered unfair to minority shareholders. Substantive grievances must instead be pursued through separate claims, such as an abus de majorité (abuse of majority) or liability actions against directors.

Recent developments have reinforced this restrictive approach. An ordinance adopted in March 2025 (effective 1 October 2025) significantly narrows the list of defects that may lead to the annulment of shareholder resolutions, in order to enhance legal certainty and reduce tactical litigation. The trend is therefore clearly toward limiting shareholder challenges, making annulment an exceptional remedy.

In listed companies, institutional investors in France have traditionally preferred to engage discreetly with boards and management rather than challenge them publicly. Open confrontation with large French corporates remains relatively uncommon compared to in the US or UK.

That said, practices are evolving. A notable example is the Atos case in 2023, where a French institutional investor sought the resignation of the board chair – something that would have been unthinkable a decade ago. Alongside this, foreign activist funds are increasingly visible on the French market and often drive more confrontational campaigns on governance or strategy.

French institutional investors are particularly active on ESG issues. They frequently co-ordinate voting strategies, submit written questions ahead of shareholder meetings, or engage in structured dialogues with issuers to influence corporate behaviour. Proxy advisers (such as ISS and Glass Lewis) also play a growing role, particularly for international investors who rely heavily on their recommendations when voting in French general meetings.

Overall, while shareholder coalitions remain less formalised than in the US or UK, the combination of rising ESG expectations, proxy adviser influence and occasional activist campaigns is gradually reshaping engagement practices in France.

In France, shareholders’ rights to receive information and to vote are formally the same whether they hold their shares directly (in registered form) or through a nominee (au porteur via a financial intermediary). Beneficial owners holding through intermediaries are entitled to receive the same meeting materials and disclosures, subject to the intermediary’s legal obligation to forward them.

In practice, while the law guarantees equal rights, operational frictions remain: the reliance on intermediaries, combined with GDPR restrictions on direct access to shareholder contact details, means that activists and institutional investors holding through nominees must generally use the company’s official communication channels to reach other shareholders.

The main structural distinction lies in loyalty shares (double voting rights): under French law, these accrue automatically to shareholders who have held their shares in registered form (nominatif pur or nominatif administré) for at least two years, unless the company’s by-laws expressly opt out. Shares held in bearer form (au porteur), which is the standard form used by foreign investors through custodians, do not qualify. This asymmetry can significantly reduce long-term foreign investors’ relative voting power compared to controlling shareholders, including the French State in strategic companies.

In SAs, French law does not permit written resolutions: shareholder decisions must be taken at a duly convened general meeting, whether ordinary or extraordinary. This rule is considered a matter of public policy and cannot be waived in the articles of association.

In SAS, by contrast, the French Commercial Code provides broad contractual flexibility. The articles of association may freely determine whether shareholder decisions can be adopted by written resolutions, by unanimous consent, or through other forms of consultation (including electronic consultation), rather than convening a physical meeting.

That said, the law imposes a mandatory core of matters that must always be decided collectively in a formal shareholders’ meeting, irrespective of what the by-laws provide. These include approval of the annual accounts, allocation of profits, capital increases or reductions, mergers and demergers, transformation into another legal form, and dissolution.

In practice, shareholders’ agreements often supplement the statutory and by-law rules, for example by granting veto rights to particular categories of investors or by defining specific procedures for strategic decisions.

In French sociétés par actions (including SA and SAS), statutory pre-emption rights (droit préférentiel de souscription) are a matter of public policy. They cannot be waived in advance nor excluded by the company’s articles of association.

These rights may only be set aside on a case-by-case basis, through a resolution of the shareholders’ meeting. Individual shareholders remain free to waive their own rights in relation to a specific issuance.

A 2024 Cour de cassation ruling confirmed that these statutory rules also apply to SAS, thereby rejecting earlier case law that had suggested broader contractual flexibility.

In listed companies, the suppression of pre-emption rights requires prior authorisation by an EGM. In practice, the shareholders’ meeting generally delegates this authority to the board of directors (or management board), which may then decide, on a case-by-case basis, whether to carry out an issuance with or without pre-emptive rights. Such delegations are subject to strict statutory limits – most commonly, issuances without pre-emptive rights cannot exceed 30% of the share capital for public offerings over a 12-month rolling period.

In listed companies, shares are freely transferable under French law; any restriction on transfer would be unenforceable.

In non-listed companies, particularly SAS, the by-laws may impose a wide range of transfer restrictions, including approval (agrément) clauses, pre-emption rights and lock-up periods. However, a total prohibition on share transfers can only be temporary and is limited by law to a maximum of ten years.

Shareholders may grant security interests over their shares under French law. The applicable rules differ depending on whether the company is listed or not, but in both cases it is legally possible. In private companies, the by-laws may impose restrictions (for example, prior approval requirements).

French law requires shareholders to disclose their interests, but the rules differ significantly between listed and non-listed companies.

• Listed companies (SA): shareholders must notify both the company and the AMF when they cross certain statutory thresholds of share capital or voting rights (5%, 10%, 15%, 20%, 25%, 30%, one-third, 50%, two-thirds, 90% and 95%). In addition, specific disclosure obligations apply during the course of a tender offer, notably for persons crossing 1% thresholds, to ensure transparency in market activity.
• Company-level disclosure: in both listed and non-listed companies, the articles of association may require additional disclosure of interests directly to the company when specified thresholds are crossed, sometimes set as low as 0.5% or 1%. Failure to comply with these disclosure requirements may result in the suspension of voting rights attached to the relevant shares.

In France, shares can only be cancelled after issue in very limited, legally defined situations, as follows.

• Share capital reduction – shares may be cancelled as part of a capital reduction, which must follow the strict procedures of the French Commercial Code (eg, EGM for SAs, protection of creditors).
• Buyback and cancellation – in listed companies, cancellation typically follows a share buyback authorised by the shareholders and carried out within statutory limits.
• Void issuance – shares can also be cancelled if their issuance is declared null and void by a court, but such cases are exceptional.

Outside these cases, shares cannot simply be cancelled at will once they have been validly issued.

Companies can buy back their shares; rules differ for private and listed companies.

• Private companies (sociétés par actions not listed) may only buy back their own shares for the purpose of awarding them to employees or officers under an employee incentive plan, and subject to strict conditions in the Commercial Code.
• Listed companies may repurchase up to 10% of their share capital, for a wide range of purposes authorised by law (eg, cancellation, employee plans, market-making). This requires prior shareholder authorisation and compliance with AMF regulations. Repurchases can also be conducted through a public share buyback offer (offre publique de rachat d’actions).

In France, dividends may only be paid out of distributable profits or reserves, as defined in the French Commercial Code, after the approval of the annual accounts by the shareholders’ meeting. Distributable profits are calculated after allocations to the statutory reserve (5% of net profit each year until the reserve reaches 10% of share capital) and any other reserves required by the by-laws.

Dividends are typically declared at the AGM following year-end and must be paid within nine months of the close of the financial year, unless an extension is granted by the court.

Dividends are most often paid in cash, but the shareholders’ meeting may authorise payment in kind, provided all shareholders receive assets of equal value.

Companies may distribute interim dividends before year-end if permitted by the by-laws and supported by interim accounts showing sufficient distributable profits.

In SA, including listed companies, shareholders retain strong rights over the composition of the board. Directors are appointed and removed by shareholders at an ordinary general meeting. Removal is always ad nutum (meaning at any time, without cause), regardless of contrary provisions in the articles or agreements. This is a matter of public policy and cannot be derogated from. Unlike other jurisdictions, French law does not recognise staggered boards or other mechanisms that insulate directors from shareholder action; in theory, the entire board of a listed company may be replaced at once.

Although the French Commercial Code permits new proposals for appointments or removals to be introduced directly at the meeting, this has become less practical in recent years with the increased use of advance and remote voting, which requires resolutions to be published beforehand. Still, in exceptional cases – particularly in distressed companies with significant retail investor mobilisation – shareholders have succeeded in reshaping the board during the meeting.

In SAS, the framework is far more flexible: the articles of association freely determine the rules for the appointment and removal of officers, which may include removal only for cause, different majority thresholds or specific procedures.

In France, shareholders cannot directly overturn or substitute their own decisions for those of the board of directors (conseil d’administration) in matters that fall within the board’s exclusive authority. The statutory separation of powers between the shareholders’ meeting and the board is strictly enforced in SAs.

That said, shareholders may bring a liability action against directors if they believe a board decision has caused damage to the company. This includes a derivative action (action sociale ut singuli) brought on behalf of the company. Unlike in US law, there is no “business judgement rule” that shields directors from liability for management decisions. However, in practice, French courts are cautious and rarely substitute their own judgement for that of directors; shareholder litigation for mismanagement (faute de gestion) remains infrequent. The exception is when a company enters insolvency proceedings, where commercial courts more readily pursue directors for mismanagement.

In SAS, the regime is more contractual. The articles of association can require that specific board decisions be approved by shareholders, or can grant shareholders broader oversight and direction rights.

Appointment

Shareholders must appoint the statutory auditor(s) (commissaire(s) aux comptes) at the ordinary general meeting, for a fixed six-year term, unless there is a statutory appointment requirement.

The law specifically renders unenforceable any clause restricting the shareholders’ freedom to choose auditors, including setting up lists of eligible auditors.

Removal

A statutory auditor cannot be removed ad nutum (at will); revocation requires a judicial order, granted only for legitimate reasons such as professional misconduct or incapacity.

The request for revocation can be made by shareholders holding at least 5% of the share capital.

French law requires that the board of directors (or the supervisory board, where applicable) in all SAs, whether listed or unlisted, presents a corporate governance report each year, attached to the management report.

For listed companies, the report must include additional disclosures (such as board composition, committee work, gender balance, application of the AFEP-MEDEF code, risk management and internal controls, and executive pay policies). Certain sections of the report – most notably those relating to executive compensation – must be verified by the statutory auditors, although the auditors do not issue an overall opinion on the company’s governance practices.

Under French law, a controlling company (whether through majority ownership or de facto control) may, in certain circumstances, incur duties and liabilities vis-à-vis minority shareholders of the controlled company.

Unlike some common law jurisdictions, French law does not recognise general “fiduciary duties” of controlling shareholders. Instead, liability arises in more specific cases, as follows.

• Abuse of majority (abus de majorité): courts may annul resolutions adopted in the sole interest of the controlling shareholder and to the detriment of the company and minority shareholders. Typical examples include the systematic refusal to distribute dividends despite recurring profits, in order to channel cash to the group’s benefit. However, case law sets a high threshold – the abusive decision must result from a vote in the general meeting, rather than mere board-level influence.
• Insolvency context: liability may be extended to a controlling company if it has interfered in management decisions in a way that contributed to the subsidiary’s financial distress.
• Listed companies: controlling shareholders are further constrained by takeover law. They must launch a mandatory tender offer upon crossing certain ownership thresholds or undertaking transactions materially affecting minority shareholders’ rights.

In practice, French courts are cautious in characterising controlling shareholder abuse, and successful claims remain rare.

In court-supervised insolvency proceedings such as sauvegarde and redressement judiciaire, shareholders may still vote on certain corporate decisions, such as capital increases. However, since the 2021 reform implementing the EU Pre-Insolvency Directive, the court can override a negative shareholder vote (cross-class cram-down) if the statutory thresholds and other strict conditions set out by law are met – which, in practice, is often the case for companies of a significant size. This means that shareholders can be compelled to accept capital increases through debt-to-equity conversions that significantly dilute their holdings.

From this perspective, shareholders are not treated less favourably than in other jurisdictions. What is more problematic, however, is that the valuation conditions underpinning the decision to disregard shareholders’ votes are not clearly defined, and the opportunities to challenge that valuation are very limited.

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 interest (intérêt à agir) may sue the company if they suffer personal harm distinct from that of the company as a whole (eg, misleading information in a prospectus, 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 ordonnance) 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.

Shareholders may bring legal actions against directors 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 misrepresentation may claim that their investment decision was harmed by the dissemination of inaccurate information.

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 company directors and officers (eg, board members, managing directors, members of the management board). Shareholders may seek to hold them liable 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.

Shareholder activism in France is increasingly recognised, although still less developed than in Anglo-American jurisdictions.

On paper, French law is relatively favourable to shareholders: they enjoy extensive rights at general meetings, 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 chambers of commerce and are thus often perceived as being more favourable to companies than to investors.

The main barrier is therefore less legislative than cultural, reflecting a reluctance to view minority shareholder activism as a legitimate and long-term benefit to companies, including for employment and governance 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 enforcement and interpretation of the law than in the law itself. They include restrictive case law on the ability of shareholders to convene general meetings at short notice, the uneven enforcement of the statutory right to minority expert investigations (expertise de minorité), and the underdevelopment of case law on the fiduciary duties of directors.

Overall, while the statutory framework governing shareholder rights has not evolved significantly in recent years, activism has been facilitated by evolving market practice, legislative support for ESG initiatives, and gradual cultural change within both the AMF and the institutional investor community.

Courts may now also be starting to play a role: in 2025, the Vivendi case marked a turning point when the Paris Court of Appeal upheld activist fund CIAM’s position and recognised the de facto control exercised by Bolloré, which in turn compelled the AMF to impose on the Bolloré Group the obligation to launch a mandatory tender offer for Vivendi. This decision is widely regarded as a landmark in French case law on shareholder activism.

The term activism covers several strategies, as follows.

• Influencing corporate strategy: shareholders may attempt to steer strategic decisions. However, this remains limited where matters fall within the exclusive remit of the board of directors, as even the use of shareholder resolutions (including consultative ones) can be challenged on this basis. The exception has been in the field of ESG (particularly environmental issues), where the regulatory environment has favoured shareholder initiatives (TotalEnergies and Engie are examples). Climate-related resolutions have affected corporate strategy in practice, even if 2025 saw some retrenchment.
• Corporate governance activism: more commonly, activism focuses on governance through the appointment or removal of directors. The legal framework in France has not changed materially in this respect and is, overall, favourable to shareholders (with the notable exception of the stringent rules governing the urgent convening of shareholder meetings). The principal limitation has instead been the lack of an activist culture among French institutional investors.
• Minority rights in transactions: activism has also been deployed to protect minority shareholders in the context of tender offers (eg, Neoen, Esso). Such campaigns are often more effective because they involve the AMF rather than the commercial courts, which are frequently seen as being overly deferential to issuers. In recent years, the AMF itself has undergone a cultural shift, showing greater sensitivity to the need to balance minority shareholder rights against those of controlling shareholders and management.

In France, activist strategies differ from those in Anglo-American jurisdictions, tending to focus less on litigation and more on regulatory engagement.

The most influential channel for activism in France is engagement with the AMF, which plays a more prominent role than the securities regulators in many other jurisdictions. In particular, the AMF exercises close scrutiny in the context of public tender offers, where it reviews compliance and, increasingly, has an indirect influence on the fairness of the offer price. Activist shareholders often challenge the conclusions of independent experts appointed under AMF regulations when they believe that the valuation is unduly favourable to the offeror. Activists also seek to involve the AMF in other corporate transactions that may trigger mandatory tender offer rules, especially where the AMF considers such transactions to be detrimental to minority shareholders.

Use of Shareholder Rights at General Meetings

Activists also rely on the exercise of voting rights and statutory tools in general meetings, such as proposing or contesting board appointments. However, French case law makes it difficult to convene extraordinary general meetings on short notice, which limits the tactical use of shareholder rights compared to other jurisdictions.

Litigation Before Courts

Activism before the tribunaux de commerce has been less developed, as these courts are often perceived as being issuer-friendly and hesitant to expand minority shareholder rights. While minority shareholders may technically pursue remedies such as annulment actions, liability claims or requests for expert investigations, these tools are unevenly enforced and less frequently used in practice.

Typical Agendas

The agendas pursued by activists generally fall into three categories:

• corporate governance improvements (board composition, executive accountability);
• transaction-related fairness (challenging the terms of public offers or mergers); and
• value realisation (pressuring for disposals, strategic reviews or return of capital).

In practice, therefore, shareholder activism in France remains more regulatory-driven than litigation-driven, with the AMF increasingly seen as the key arena for protecting minority shareholders’ interests.

In recent years, shareholder activism in France has shown several identifiable patterns.

Sectoral Focus – ESG-Driven Activism

A significant number of campaigns have been linked to ESG concerns, particularly environmental issues. The energy sector has been the most impacted, with activists targeting climate-related strategies, shareholder disclosure and transition plans. This trend was supported by the legislative and regulatory environment, which facilitated the filing of climate-related resolutions. However, there has been a visible slowdown in 2025, reflecting both a maturing of the debate and a certain pushback from issuers.

Market Capitalisation of Targets

For reasons of liquidity and visibility, activist investors generally focus on large-cap companies. These issuers offer greater scope for attracting market attention, building meaningful positions and exerting influence, whether through shareholder resolutions or public campaigns. Mid-cap activism does occur but tends to be less visible and less impactful, given the structural limitations of the French market.

Other Emerging Targets

Beyond ESG, recent activism has increasingly targeted public offers, particularly where the fairness of the price offered to minority shareholders is at stake (eg, Neoen, Esso, Vivendi). In this area, activism is not sector-specific but is linked to situations where control or transaction structures raise issues of minority protection.

Overall, while ESG activism (especially environmental) has been the defining feature of the past few years, the most consistent underlying trend continues to be the concentration of activism on large-cap companies, both for liquidity reasons and for their higher public profile.

In the French market, activism has historically been led by a relatively narrow set of actors, but the landscape is gradually diversifying.

Hedge Funds

Hedge funds, particularly foreign ones, have often been the most visible activists. However, they traditionally face greater difficulties in being heard in France, where market participants and courts may be less receptive to their campaigns. This is less of an obstacle with the AMF, which plays a central role in reviewing public offers. The AMF has increasingly shown that it is open to considering the positions put forward by activist funds, even foreign ones.

French Institutional Investors

Domestic institutional investors have historically been less vocal than their Anglo-American counterparts, often due to cultural factors and long-standing ties with issuers. This trend is now beginning to shift, particularly under the influence of ESG-driven campaigns, where French asset managers have found both legitimacy and regulatory encouragement to take more active positions.

Retail Investor Associations

Associations representing individual shareholders play a particularly important role in distressed situations, where the company’s financial position has deteriorated dramatically without clear explanations. In such cases, retail investors may represent a significant proportion of the shareholder base, and their collective organisation can make them a powerful voice in demanding accountability from management or seeking regulatory intervention.

Reliable quantitative data on the overall proportion of activist demands met in France remains scarce, as many campaigns are negotiated privately and outcomes are often partial or incremental. Nevertheless, several recent developments illustrate the evolving balance.

Tender Offers: Neoen, Compagnie Artois (Among Others)

In early 2025, minority shareholders achieved several notable victories in the context of tender offers, where co-ordinated campaigns and regulatory pressure led the AMF to take a more receptive stance on issues of price fairness and minority protection. These cases highlight that activism can be effective when combined with the AMF’s supervisory powers, particularly in ensuring compliance with mandatory tender offer rules.

Judicial Setbacks: TotalEnergies

By contrast, in 2024, the Commercial Court of Nanterre issued a rare but significant decision rejecting the filing of an advisory shareholder resolution in the TotalEnergies Case. This outcome illustrates the persistent structural barriers faced before commercial courts, where the judiciary often remains less favourable to minority shareholders compared to the AMF.

Vivendi/CIAM

Perhaps the most prominent success has been the Vivendi case, in which activist fund CIAM persuaded the Paris Court of Appeal to recognise the de facto control exercised by the Bolloré group, thereby compelling the AMF to impose a mandatory tender offer. This marked a turning point for French case law and is widely regarded as a major activist win.

In France, many boards and controlling shareholders still have a limited appreciation of the value minority investors can bring as an alternative perspective for directors. Dissent is often poorly tolerated, particularly when expressed publicly, and the presence of activist funds is frequently perceived as a destabilising threat rather than a potential source of market discipline or strategic insight. This perception is compounded by a general unfamiliarity with how hedge funds operate and the diversity of their investment strategies, which tends to fuel exaggerated fears of activism.

To minimise the risk of activism and respond effectively if approached, companies may consider the following practical steps:

• strengthening board composition by appointing independent directors with recognised expertise and credibility among institutional investors, capable of challenging management constructively;
• ensuring the board has independent advisory support (legal, financial and strategic) separate from management’s advisers, so that activist proposals can be assessed on their merits rather than dismissed reflexively;
• improving transparency and communication with the market, particularly in relation to major strategic transactions, governance changes and capital allocation policies, to reduce the information gaps that often fuel activism; and
• fostering a cultural shift within the company to recognise that engagement with activist shareholders is not inherently adversarial and may create long-term value for all stakeholders, including employees.