The Statutory Gap: Why This Is the Most Litigated SAS Question
Article L 227-6 of the commercial code states that the president is appointed under conditions determined by the articles. It says nothing about removal. There is no statutory default on who can initiate removal, what majority is required, whether just cause must exist, or what financial consequences follow. In a SARL, the gérant is removable by shareholders representing more than half the shares, with damages if there is no just cause. An SA PDG is freely revocable by the board at any time. The SAS has none of this. Every SAS must define its own removal mechanism in the articles — and those that do not face a governance void precisely when it matters most.
A SAS whose articles appoint a president but say nothing about removal has a president who can only be dismissed under general civil contract law — a process governed by uncertain case law, potentially requiring judicial proceedings, and likely to leave the president in post during any legal challenge. The president continues to bind the company in third-party dealings throughout. Every day the governance dispute remains unresolved is a day of operational and commercial risk.
What the Articles Must Define
A complete removal clause addresses five distinct questions: who has standing to initiate the removal procedure; what organ takes the removal decision and at what majority; whether removal requires just cause (juste motif) and, if so, what constitutes it; what financial consequences arise on removal; and when removal takes effect. Common definitions of just cause include: serious fault in management; criminal conviction for specified offences; serious conflict of interest; persistent breach of the articles; incapacity; or conduct incompatible with the duties of the office.
The choice between cause-based and cause-free removal is one of the most commercially consequential governance decisions in SAS article drafting. A cause-free (ad nutum) clause gives shareholders maximum flexibility but leaves the president with no job security. A cause-based clause protects the president but requires the company to establish the cause in any challenged removal — which may be factually and legally contested. Both the financial consequences and the mandate term are creatures of the articles. A president whose articles provide for an indemnity on removal without just cause has a financial cushion; a president whose articles are silent bears all the termination risk.
Transformation: How Change of Form Ends the Mandate
The transformation of a company into a SAS — converting a SARL or SA — automatically terminates the powers of the existing governance organs. The gérant of a SARL, the conseil d'administration and PDG of a SA, all lose their functions at the moment the transformation takes effect. They do not continue as president of the new SAS by operation of law — they must be specifically appointed or reappointed under the new SAS governance framework. Their mandate ends without any separate removal decision; the transformation itself is the terminating event.
However, the transformation does not affect pre-existing personal guarantees, cautions, or other individual commitments made in connection with the company's obligations. A SARL gérant who gave a personal bank guarantee continues to be bound after their mandate ends through transformation. The transformation does not create a new legal person and does not novate existing contractual obligations (Art. L 210-6). Only an explicit creditor release or the expiry of the guarantee discharges it.
Any president, manager, or director who gave a personal guarantee — caution, aval, or any other personal commitment — for company debts before a transformation remains bound after their mandate ends through the transformation. This applies whether the transformation was from SARL to SAS, SA to SAS, or any other form. Managers exiting through transformation must review all personal commitments before the operation completes and negotiate explicit releases with creditors where possible. Transformation is not a substitute for those releases.
Removal and Outstanding Personal Guarantees
Where a president has given personal guarantees for the company's obligations — bank borrowings, commercial leases, supplier credit — their removal as president does not automatically discharge those guarantees. The caution is a personal commitment that exists independently of the management mandate. A president approaching removal must review all personal commitments before the removal takes effect. Where a guarantee is open-ended, the guarantor can terminate it for future obligations but remains bound for all obligations incurred before the termination notice. In practice, a president approaching removal needs to identify every personal guarantee, determine its scope and term, and negotiate releases with creditors before the mandate ends.
Removal Compared Across Company Forms
| Company form | Removal mechanism | Cause required? | Financial consequence |
|---|---|---|---|
| SAS — President (Art. L 227-6) | According to the article clauses — simple or reinforced majority of shareholders; no statutory mechanism; articles may designate any organ | Ad nutum or juste motif — articles determine which; no statutory default | As articles provide — with or without indemnity; no statutory right |
| SARL — Gérant (Arts. L 223-25) | Shareholders representing more than half the shares; relative majority on second vote | No cause required by statute; damages if no just cause | Damages for unjustified removal |
| SA — PDG | Board of directors, freely, at any time | No cause required — ad nutum revocation | No statutory right to indemnity |
| SA — DG (non-PDG) | Board of directors, at any time | No cause required; but damages if removed without just cause | Damages if no just cause |
From October 2025: Nullity of Non-Compliant Removal Decisions
The analysis of any SAS presidential removal begins with the articles. Where the articles include a nullity clause, removal decisions taken in breach of article procedures can be challenged and annulled from 1 October 2025 under the ordonnance 2025-229 reform (Art. L 227-20-1). Strict procedural compliance has therefore become more legally consequential than before. The president being removed retains authority to bind the company in third-party dealings until the removal takes formal legal effect — minimising this interval by efficient procedure is critical. Where the articles are silent on removal, professional advice is required before any action is taken. Where a president holds both a management mandate and an employment contract, the two must be terminated separately under their respective legal regimes (C. trav. Art. L 1237-1 et seq.).
- No statutory removal mechanism (Art. L 227-6): the articles must specify the procedure entirely. A SAS whose articles are silent on removal faces a governance void. The articles must address who initiates, who decides at what majority, whether cause is required, financial consequences, and when removal takes effect.
- Until removal takes formal effect: the president continues to bind the company in third-party dealings — minimise the interval between decision and formal registration. From October 2025, removal decisions taken in breach of article procedures can be challenged and annulled (Art. L 227-20-1; ord. 2025-229).
- Transformation ends the mandate but not personal guarantees: the transformation of a SARL or SA into a SAS terminates the powers of existing governance organs without a separate removal decision — but pre-existing personal cautions given by former managers survive (Art. L 210-6). A specific creditor release is required to discharge them.
- Personal guarantees on removal: removal as president does not automatically discharge personal guarantees given for company obligations. A departing president must identify every personal guarantee, determine its scope and term, and negotiate releases with each creditor before the mandate ends. Where a guarantee is open-ended, the guarantor can terminate for future obligations but remains bound for past ones.
- Employment contract — separate regime: where the president holds both a management mandate and an employment contract, the two must be terminated separately under their respective regimes (C. trav. Art. L 1237-1 et seq.). Where the articles are silent on removal, take professional advice before initiating any action.
Whether you are a shareholder seeking to remove a president, a president defending your position, or an investor assessing governance risk, we advise on the legal framework, the procedural requirements, and the financial consequences. Presidential removal disputes in a SAS are highly article-specific and move quickly — early advice is essential.
Get Legal AdviceThis article is for general information only. It does not constitute legal advice. Presidential removal disputes are highly fact-specific and depend entirely on the content of each company's articles. Always seek qualified legal advice before taking any action in a management dispute.
Key Legal References
SAS president: appointed under conditions determined by the articles; statute is silent on removal mechanism
Transformation ends the powers of existing governance organs; no novation of existing contractual obligations
Personal guarantees given by former managers survive company transformation; explicit creditor release required
Nullity of corporate decisions in breach of mandatory provisions (from 1 October 2025); reform of SAS nullity regime
SARL gérant removal: shareholders representing more than half the shares; damages if no just cause
Employment contract of president — separate termination regime independent of mandate revocation
