#Shareholder Exit Lawyer in France: Withdrawal, Exclusion

A shareholder exit covers all the mechanisms that allow a shareholder (associé) to leave a company and recover the value of their shares. It takes the form of a transfer, a withdrawal, an exclusion or a buy-back by the company. A shareholder exit lawyer secures the transaction, values the shares and prevents disputes. Hashtag Avocats, a law firm in Paris, assists majority and minority shareholders in these often contentious situations.

How can a shareholder exit a French company?

Transfer of shares

A transfer is the most common way to exit. The shareholder sells their shares (parts sociales or actions) to another shareholder, to the company or to a third party. The articles of association often govern transfers through an approval clause. This clause makes the entry of a third party subject to the consent of the existing shareholders.

A transfer requires agreement on the price and on the terms of transfer. A share transfer agreement formalises the transaction and organises the warranties. Our team drafts these agreements in line with the corporate law applicable to the company form concerned.

The approval procedure varies with the company form. In a limited liability company (SARL), a transfer to a third party requires the consent of a majority of the shareholders representing at least half of the shares, unless the articles of association provide for a higher majority (Article L. 223-14 of the French Commercial Code, Code de commerce). If approval is refused, the shareholders must, within three months, buy the shares or have them bought; the company may also buy them back by reducing its share capital, with the transferor’s consent. The price is then set by agreement or by an expert.

In a non-trading company (société civile), Article 1861 of the French Civil Code in principle makes any transfer subject to the approval of all the shareholders, although the articles of association may adjust this rule. Where the company is predominantly invested in real estate, an exit by transfer of shares must also follow the form imposed since 27 June 2026 by Article 1865-1 of the Civil Code (transfer of SCI shares).

Withdrawal of a shareholder

The right of withdrawal allows a shareholder to leave the company and obtain repayment of the value of their interest. In non-trading companies, Article 1869 of the Civil Code permits withdrawal under the conditions set by the articles of association or, failing that, by unanimous decision of the other shareholders. The court may also authorise it on legitimate grounds.

A withdrawing shareholder is entitled to repayment of the value of their shares. Failing an amicable agreement, this value is set in accordance with Article 1843-4 of the Civil Code. The right of withdrawal protects the minority shareholder who wishes to exit.

Exclusion and buy-back by the company

Exclusion removes a shareholder against their will. It requires a precise clause in the articles of association or a statutory provision specific to the company form. The procedure must respect the targeted shareholder’s rights of defence. The company’s buy-back of their shares often accompanies the exclusion.

A buy-back by the company, or by the other shareholders, makes it possible to settle the exit. It requires compliance with share capital rules and, where applicable, a reduction of share capital. Valuing the shares remains the sensitive point of the transaction.

A company’s buy-back of its own shares is subject to strict rules. It must not impair the share capital or the rights of creditors. Suitable financing secures payment of the price to the exiting shareholder. Our team checks the legal and financial feasibility of each structure.

Share valuation and the Article 1843-4 expert

The valuation of shares is at the heart of most disagreements. Seller and buyer argue for opposing methods. In the event of deadlock, Article 1843-4 of the Civil Code offers a solution. It allows the value of the shares to be set by an expert.

The expert is appointed by the parties or, failing agreement, by judgment of the president of the competent civil court (tribunal judiciaire) or commercial court (tribunal de commerce), ruling under the expedited procedure on the merits, with no possibility of appeal. Where they exist, the expert applies the valuation rules and methods laid down in the articles of association or in an agreement binding the parties. This remedy applies where a statutory provision refers to this article, or where the articles of association provide for a transfer or buy-back without the price being determined or determinable.

The choice of method has a strong influence on the result. Net asset value, earnings value or a cash-flow approach lead to different figures. Legal advice in advance secures the valuation clause.

The valuation date chosen also affects the amount. The articles of association would do well to specify it. The expert remains bound by the methods set in the articles of association, where they exist. A precise valuation clause therefore reduces the uncertainty of litigation.

Articles of association and shareholders’ agreement

The articles of association and the shareholders’ agreement organise the exit in advance. They set the conditions for transfers, the approval procedures and the valuation methods. Drafting them early limits disputes at the time of departure.

The shareholders’ agreement often contains specific exit clauses. The drag-along clause, or compulsory joint exit, obliges minority shareholders to sell in the event of an offer for the majority. The tag-along clause, or joint exit right, allows the minority shareholder to sell on the same terms as the majority shareholder. Purchase and sale undertakings (promesses d’achat et de vente) organise exits on predefined terms.

Our team drafts and reviews these clauses within the shareholders’ agreement. A balanced agreement protects each party and smooths future exits.

Disputes and dissolution

A shareholder exit sometimes leads to litigation. Disagreement over the price, refusal of approval or abuse of majority fuel disputes. Disagreement between shareholders can even paralyse the company.

A poorly prepared exit carries several risks. A shareholder may challenge the lawfulness of their exclusion. A minority shareholder may invoke abuse of majority to block a decision. A disputed valuation delays repayment for the shares. Structured negotiation limits these disputes.

When deadlock becomes total, judicial dissolution remains a way out. Article 1844-7 of the Civil Code provides for early dissolution ordered by the court, at the request of a shareholder, on legitimate grounds. Disagreement between shareholders that paralyses the functioning of the company is such a ground. This route remains a last resort.

Every situation is different. The exit route depends on the company form, the articles of association and the relationship between shareholders. Our team favours negotiation before considering litigation.

FAQ

Can a shareholder leave a company whenever they wish?

Freedom to exit depends on the company form and the articles of association. In a non-trading company, withdrawal is possible under the conditions of Article 1869 of the Civil Code. In a joint-stock company, an exit usually takes place through a transfer. The articles of association govern these options.

How is the price of shares set in the event of disagreement?

In the event of disagreement, Article 1843-4 of the Civil Code allows recourse to an expert. This expert is appointed by the parties or, failing that, by the president of the court. The expert applies the methods laid down in the articles of association or the agreement. The expert’s task is to set the disputed value.

Is it possible to exclude a shareholder?

Exclusion requires a precise clause in the articles of association or a statutory provision. The procedure must respect the rights of defence of the shareholder concerned. The buy-back of their shares accompanies the exclusion. Irregular implementation creates a risk of litigation.

What can be done in the event of total deadlock between shareholders?

Total deadlock first calls for an attempt at negotiation. Failing that, Article 1844-7 of the Civil Code opens the way to judicial dissolution on legitimate grounds. Disagreement that paralyses the company is one such ground. This solution remains a last resort.

Official sources

• Article 1843-4 of the French Civil Code, appointment of an expert to value shares: Légifrance (in French)
• Article 1869 of the French Civil Code, withdrawal of a shareholder from a non-trading company: Légifrance (in French)
• Article 1844-7 of the French Civil Code, dissolution of the company: Légifrance (in French)

Law checked as at 5 October 2026. This content provides general information and does not constitute legal advice. Every situation is different: contact our team to organise a shareholder’s exit.