Exclusion of a partner: a clause depriving a shareholder of the right to vote on his or her exclusion does not cause him or her any grievance if he or she was able to participate in the vote

In a much-discussed ruling, the Court of Cassation ruled that the provisions of a clause setting out the conditions for the exclusion of a shareholder, which deprive the shareholder whose exclusion is being considered of the right to vote on the resolution concerning his or her exclusion, are deemed null and void. Thus, it is no longer the clause in its entirety that is censured, but only the part that deprives the shareholder whose exclusion is being considered of the right to vote.

Thus:

• The right to exclude the shareholder is maintained
• The withdrawal of the voting rights of the shareholder subject to exclusion shall be deemed null and void.
• The other terms of the clause remain valid

The Court of Cassation thus partially upholds the exclusion clause by opening the door for a revision of the clause in its implementation, in particular by effectively maintaining the voting rights of the shareholder whose exclusion is being considered.

This ruling is interesting because, assuming that the clause setting out the conditions for exclusion cannot be implemented without a prior amendment to the articles of association (previous position of case law), and that, furthermore, the articles of association stipulate that such an amendment requires unanimity, the shareholder whose exclusion is being considered could block this exclusion by voting against the resolution providing for the amendment of the articles of association.

The ruling therefore allows the clause to be brought into compliance, not by rewriting it, but by implementing it in such a way that it does not cause any grievance to the shareholder whose exclusion is voted on if that shareholder took part in the vote.

Reference
Cass. com., 29 May 2024, no. 22-13.158