10 years
Maximum duration of an inalienability clause prohibiting all share transfers — the absolute statutory ceiling under Art. L 227-13, regardless of how the clause is worded
Void
Legal effect of any transfer of SAS shares made in breach of the articles — not merely voidable, but null and void by operation of Art. L 227-15
Defence right
Mandatory minimum that every exclusion procedure must respect — a shareholder cannot be forced out without an opportunity to be heard, regardless of what the articles say (Art. L 227-16)

Four Tools for Controlling Who Holds SAS Shares

The SAS allows founders to design their own share transfer controls entirely in the articles — unlike the SARL, where the transfer approval mechanism is prescribed by statute, or the SA, where similar rules apply with significant formalism. Each mechanism has specific legal conditions and specific gaps that produce unintended consequences when the drafting is imprecise.

Hard lock-up
Inalienability Clause (Art. L 227-13)
Prohibits all transfers for a defined period. Maximum 10 years by statute — absolute ceiling regardless of wording. No third-party buyer is possible during the lock-up. Requires proportionate justification. Two-shareholder structures need special deadlock interaction provisions.
Soft control
Pre-Emption Right
Gives existing shareholders the right to acquire shares before they are offered to a third party. Transfer is possible — but only after the pre-emption procedure has been followed. Articles must define: beneficiaries, notification procedure, response period, price mechanism, allocation among multiple exercisers, and lapse consequences.
Gatekeeper
Approval Clause / Agrément (Art. L 227-14)
Requires the company's consent to any proposed transfer. Transfer conditional on approval by a defined organ at a defined majority. Since ord. 2017-747: can be adopted and modified by whatever majority the articles specify — no statutory unanimity required. Silence must be treated as either approval or refusal — specify this in the clause. Refusal obliges an alternative buyer or company buyback.
Forced exit
Exclusion Clause (Art. L 227-16)
Allows the company to force a shareholder to sell their shares on defined grounds. Most powerful mechanism — but requires a mandatory defence right (droit de la défense) that cannot be contracted away. Since loi 2019-744: same adoption/modification regime as approval clauses. Triggering conditions must be precise and objective. Valuation mechanism must be specified in advance.

Inalienability: The Hard Lock-Up (Art. L 227-13)

An inalienability clause prohibits the shareholder from transferring their shares — to anyone, for any purpose — for the duration specified. The maximum is 10 years (Art. L 227-13) — absolute ceiling; a clause expressed to last longer is valid up to 10 years and void for the excess. The 10-year period runs from the date of adoption. The clause must be proportionate to the legitimate interest it protects: a lock-up justified by the need to maintain a stable founding team during a critical development phase is clearly valid; one designed to trap a shareholder permanently is at risk of challenge.

For two-shareholder SAS companies with equal stakes: an inalienability clause combined with an irreconcilable deadlock creates a complete standstill — neither can force modification without the other's agreement. The solution is a specific provision allowing either party to lift the inalienability unilaterally after a defined deadlock period, or a mandatory buyout mechanism that operates independently of the inalienability clause.

Approval Clause and Exclusion: The Key Rules

The approval clause must define: the approving organ; the majority required; the time limit; and critically, whether silence is approval or refusal — most well-drafted clauses treat failure to respond as equivalent to approval (incentivising the organ to act). A refusal of approval cannot leave the selling shareholder permanently trapped — the articles should provide that refusal obliges the company or other shareholders to find an alternative buyer within a defined period, or to buy the shares at the article-defined valuation. Courts treat an approval right weaponised to prevent any exit as an abusive exercise.

For exclusion clauses: triggering events must be concrete and objective — not merely "if the company decides." Common well-defined triggers include: conviction for a specified offence; loss of a required professional qualification; breach of a non-compete; insolvency proceedings against a corporate shareholder; failure to meet specified minimum contribution thresholds; personal incapacity where the individual's involvement is essential. The valuation mechanism must be specified in advance — a manifestly disproportionate mechanism can be overridden by a court. Three common approaches: fixed formula (net assets, earnings multiple); independent expert under Art. 1843-4 C. civ.; or market-value determination by agreed independent experts.

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The One Mandatory Condition No Exclusion Clause Can Override

However the exclusion clause is worded, and whatever majority the articles require for the exclusion decision, the excluded shareholder must have the right to be heard before the decision is taken (Art. L 227-16). This is a fundamental principle of French procedural fairness that courts enforce consistently. An exclusion that proceeds without giving the shareholder notice of the grounds and an opportunity to respond can be annulled, and the company may face damages claims. Build the defence procedure explicitly into the clause — specify the form of notice (registered letter), the minimum response period, and the deliberation process for the decision.

Combining the Mechanisms: A Layered Defence

The most robust frameworks use multiple mechanisms in combination. A typical layered approach for a closely-held SAS: inalienability for the first five years to lock in the founding team; pre-emption rights exercisable by existing shareholders during and after the lock-up; approval required for transfers to specified categories of third parties; exclusion available for specific adverse events at any time. The articles must define clearly how the mechanisms interact: does pre-emption displace the approval obligation? Does the exclusion mechanism operate independently during a lock-up period? Does the approval clause apply to voluntary sales but not judicial forced sales? Where these interaction questions are not addressed, disputes arise about which mechanism governs in a given scenario.

A practical consequence of multiple overlapping restrictions: the more transfer restrictions a shareholder faces, the more the shares are discounted relative to their unrestricted value. This is a direct economic consequence explicitly acknowledged in the legal framework. Founders who impose very extensive lock-ups and approval mechanisms are also reducing the liquidity and value of their own shares — a discount that may need to be addressed explicitly in the terms of any future investment or exit transaction.

Share Transfer Control: Drafting Checklist
  • Inalienability (Art. L 227-13): duration within the 10-year ceiling; proportionate justification stated; for two-shareholder structures, interaction with deadlock provisions addressed — consider a provision allowing unilateral lift after a defined deadlock period or a mandatory buyout mechanism.
  • Pre-emption: beneficiaries identified; notification procedure specified; response period stated; price mechanism defined; lapse consequence stated; allocation among multiple exercising shareholders addressed. Remember Art. L 227-15: any transfer in breach of articles = void by operation of law.
  • Approval clause (Art. L 227-14; since ord. 2017-747): approving organ and required majority stated; response time limit defined; silence-as-approval or silence-as-refusal made explicit; alternative buyer obligation or company buyback on refusal addressed. Confirm the majority required for adoption/modification is stated in articles.
  • Exclusion clause (Art. L 227-16; since loi 2019-744 same adoption regime as approval): triggering events precise and objective; defence procedure explicit (notice form, minimum response period, deliberation); valuation mechanism specified (consider Art. 1843-4 C. civ. expert). Update any pre-2019 articles that contemplate unanimity for exclusion clause adoption.
  • Interaction between mechanisms: explicitly define how the mechanisms interact. Does pre-emption displace approval? Does exclusion operate during a lock-up? Does the approval clause apply to judicial forced sales? Consider whether a change in ownership of a corporate shareholder should trigger the same mechanisms as a direct share transfer.
Designing Share Transfer Controls for Your SAS?

Transfer restriction clauses that are incomplete, internally inconsistent, or fail to address real-world scenarios create the opposite of the intended protection. We draft and review SAS share transfer provisions — inalienability, pre-emption, approval, and exclusion — for founders, investors, and groups across all sectors and transaction types.

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This article is for general information only. It does not constitute legal advice. Share transfer restriction clauses are highly fact-specific and their drafting requires careful consideration of each company's specific structure and shareholder relationships. Always seek qualified legal advice.