Reform of Invalidities in French corporate law: What you need to know.

On March 12, 2025, Ord. No. 2025-229 was published. By reforming the regime of invalidity of corporate decisions, it marks a major turning point in corporate law. The reform will take effect from October 1, 2025, and the goal is clear: to simplify the legal framework, guarantee greater legal certainty, and reduce unnecessary litigation. But concretely, what impact will this reform have on your practices? Let's take a closer look.

1- A New Legal Framework: The Franch Civil Code as the sole reference:

One of the major changes brought about by this reform is the reorganization of the rules relating to the invalidity of social decisions. From now on, all relevant provisions will be incorporated into the Civil Code, thus simplifying the reading and application of the rules. This centralization aims to provide a clearer and more uniform framework for all companies, whether commercial or civil.

2- Statutory Violations: End of automatic invalidity:

One notable change is the abandonment of the principle of automatic invalidity in the event of a violation of the statutes. Thus, unless otherwise provided by law, a violation of the statutes no longer automatically justifies the annulment of the decision.

However, an exception remains for Sociétés par Actions compagnies (SAS): they can continue to provide for the invalidity of decisions taken in violation of their own statutory rules.

3- Mandatory Provisions: A concept to watch out for:

Another key point of the reform is the concept of mandatory provisions of corporate law, introduced by Article 1844-10 of the Civil Code. From now on, the invalidity of corporate decisions can only arise from the violation of such mandatory provisions.

But what exactly is a mandatory provision? This concept will likely be the subject of debate in the years to come, and its exact definition will be left to case law.

4- The Triple Test: A practical filter for judges:

One of the most anticipated additions of this reform is the introduction of a "triple test" to Article 1844-12-1 of the Civil Code.

Before declaring a social decision invalid, judges will now have to check three criteria:

1. Evidence of direct harm related to the violation of the rule;

2. The irregularity must have significantly influenced the content of the decision;

3. The consequences for the social interest of the disability must not be excessive.

This approach aims to introduce a more rational and proportionate logic into judicial decisions, in order to avoid excessive cancellations that could destabilize the company.

5- A more flexible approach to social interest

Two new articles of the Civil Code strengthen the protection of corporate interests:

• Article 1844-15-1 of the Civil Code: The invalidity of an appointment or the irregular maintenance of a body does not call into question the decisions taken by this body.

• Article 1844-15-2 of the same code: Judges can now defer the effects of invalidity if this retroactivity harms the corporate interest of the company.

6 - Prescription: A reduced period:

Another important point: the limitation period for bringing an action for nullity is now set at 2 years (compared to 3 previously).

What you need to remember?

• You need to be more responsive in disputes, especially in situations where decisions could affect the future of your company.

In conclusion: A welcome reform, but be ready for its implementation!

If you have any questions about the implementation of this reform or if you need personalized advice, contact our firm to assist you in this compliance before the new rules come into force. Act now and secure your decisions!