Appointing or Removing a Company Director: Procedure and Precautions

Quick answer. Appointing and removing a director depend on the company form. A SARL manager can only be removed for just cause (article L223-25 of the Commercial Code): otherwise they are owed damages. A SAS president and general manager are removed under the by-laws (article L227-5), often ad nutum where nothing is provided. In an SA, the director and the chair of the board are removable ad nutum (articles L225-18 and L225-47), while a general manager removed without just cause may be compensated (L225-55). Every change is filed with the INPI single window and published in a legal gazette, within one month.

Changing a director is not an administrative detail. It is a corporate decision that engages the company's liability, alters the power to bind it toward third parties and may, if a removal is mishandled, trigger sometimes heavy damages. The rules vary widely depending on whether you run a SARL, a SAS or an SA: the same sentence — "the director may leave" — does not cover the same rights at all.

Since January 2023, all amendment formalities go through the single window for business formalities, run by INPI. Online filing has replaced registry filings, but the substance of the law — who decides, on what terms, with what severance — remains that of the Commercial Code. Before acting, you must first re-read your by-laws: they may tighten the statutory rules (reinforced majority, a just-cause requirement where the law imposes none), and that is often where disputes are decided. The right reflex is to review your SAS or SARL by-law clauses before any decision.

A director can be designated at incorporation, in the by-laws, or during the company's life by a shareholder decision. The competent body depends on the form:

The appointment steps are similar across forms:

1. Check eligibility: capacity, no incompatibility or management ban, and — for a non-EU foreigner operating in France — an adequate residence permit.
2. Adopt the decision in the competent body (shareholders' meeting, sole-member decision, board) and record it in minutes.
3. Collect the documents of the new director: ID copy, sworn statement of no conviction and parentage, acceptance of office.
4. File with the single window within one month, and publish a legal notice in an authorised gazette of the registered-office district.
5. Update the national business register (RNE) and, where applicable, the beneficial-owners register if control changes.

This is where the regimes differ most. The table below summarises the law absent a contrary by-law clause.

Just cause and abusive removal#

Two notions not to be confused. Just cause conditions the right to severance in some forms (SARL manager, SA general manager who is not chair): a management failing, a dispute compromising the corporate interest, or a justified strategic change. Without just cause, the removal remains valid — the director leaves — but opens a right to damages.

Abusive or vexatious removal is another issue, affecting all forms, including ad nutum removal. Even where no just cause is required, the director must have been able to present their observations (adversarial principle) and the removal must not occur in insulting, public or brutal circumstances. A removal that is perfectly sound on the merits can thus be sanctioned by damages if the manner was humiliating. This is the most frequent and most costly mistake.

Precautions before removing#

• Re-read the by-laws and the shareholders' agreement: a clause may require just cause in a SAS, provide a contractual severance (golden parachute) or a notice period.
• Respect the adversarial process: summon the director, set out the grievances, let them explain before the vote.
• Mind the manner: no vexatious circumstances, no public announcement before the decision, no same-day eviction from the premises.
• Document the reason: even when the law does not require it, recording the grounds protects you in any later dispute.
• Check the overlap with any employment contract: removing the office does not, by itself, end a separate and effective employment contract.

• The majority-shareholder SARL manager. They vote on their own removal with their shares: in practice, they are irremovable by that route. Minority shareholders then have one recourse: judicial removal for legitimate cause, open to any shareholder (L223-25).
• Overlapping office and employment contract. This requires effective employment, distinct from management duties, a relationship of subordination and separate pay. Removing the office leaves the employment contract in place, which then follows dismissal law. The topic ties into the director's social-security status.
• Removal off the agenda (incident during the meeting). In an SA, a director may be removed even if the matter was not on the agenda, where it arises as an incident during the meeting. This flexibility does not exist everywhere: check by form.
• The resigning director. Resignation is free but must not be abusive (a sudden departure leaving the company without a representative). A reasonable notice period and the calling of a meeting to appoint a successor avoid liability.

• The one-month deadline to file the change with the single window runs from the decision: a delay creates banking and contractual difficulties, as the company extract is out of date.
• Unenforceability against third parties: until publicity is done, the former director can still bind the company in good faith toward third parties. A prompt update protects the company.
• Beneficial owners: if the change of director comes with a change of control, the beneficial-owners register must be updated.
• Continuity of bank signatures: notify the bank and update the mandates on the day duties begin, or payments may be blocked.

Last year we handled the removal of a SAS general manager whose by-laws, hastily drafted at incorporation, required "just cause" — a clause the shareholders had forgotten. They were about to vote an ad nutum removal, convinced the SAS always allowed it. Without a review, the company would have exposed itself to a severance claim, as just cause was not made out. We first documented the management failings, organised an adversarial meeting, then put the removal to a vote on established grounds. The result: a secure departure, with no litigation.

The lesson is simple: with directors, the risk almost never comes from the law, but from the by-laws no one re-read and the manner that was neglected. A removal is prepared as an operation in its own right, not as a box to tick at the single window.

Hayot Expertise tip. Before any appointment or removal, have your by-laws and shareholders' agreement reviewed: that is where reinforced majorities, just-cause clauses and golden parachutes hide. Prepare reasoned minutes, respect the adversarial process, and file the change within one month. We help you secure the legal decision and its tax and social consequences.