Drafting SAS Bylaws: The Clauses That Truly Matter

Quick answer. The SAS offers broad statutory freedom framed by the Commercial Code (art. L.227-1 onward). A president is mandatory; the rest — governance, entry and exit conditions, majorities — is freely drafted. Key clauses (approval, pre-emption, lock-up, exclusion) structure the capital and protect shareholders; without them, the promised flexibility becomes a source of deadlock at the first disagreement. Bylaws (public, enforceable against all) and the shareholders' agreement (confidential, contractual) play complementary roles.

The SAS owes its popularity to statutory freedom: unlike the rule-bound SARL, it lets shareholders write most governance and transfer rules. This freedom is never free: overly brief bylaws are costly, first in later negotiations, then in court if conflict arises. For the general framework, see our definition and principles of the SAS and the SARL vs SAS comparison.

Every SAS bylaw must contain, at minimum: the corporate name followed by "SAS"; the form; the corporate purpose; the registered office; the term (usually 99 years); the capital amount; contributions and their allocation into shares; the identity of shareholders; the identity of at least one president (art. L.227-6); and the powers of the management bodies. The bylaws also set the majorities for amending the bylaws themselves — a frequently overlooked point. These provisions are part of the legal obligations at incorporation.

Approval clause (art. L.227-14)#

It subjects any share transfer to the consent of a body (assembly, president, committee). The bylaws specify who approves, by what majority, within what deadline, and the consequence of a refusal (repurchase by the company or shareholders, at what price). Without approval, anyone can enter the capital on the mere agreement of the seller and the buyer.

Pre-emption clause (right of first refusal)#

On notice of a transfer, shareholders have a priority repurchase right. The bylaws set the priority order, the option period and the pricing method. Approval says "you cannot sell to that person"; pre-emption says "if you sell, I buy first."

Lock-up clause (art. L.227-13)#

It temporarily prohibits share transfers, for a maximum duration of 10 years. Useful to lock in the founding team, notably during fundraising, with provided exceptions (succession, disability, unanimous consent).

Exclusion clause (art. L.227-16)#

It allows a shareholder to be removed from the capital, on grounds and via a procedure defined in the bylaws (notice, right to be heard, compensation at market value). Without it, a defaulting or damaging shareholder cannot be removed.

In practice, structural clauses go in the bylaws (enforceable against all) and fine details in the agreement (confidential). A transfer breaching a statutory approval clause is null; the same breach of an agreement only gives rise to damages.

1. Validate the mandatory provisions (name, purpose, office, capital, president…).
2. Set governance: president alone, or president plus general manager? powers and commitment caps?
3. Choose the protective clauses suited to the profile (startup, family SAS, investor entry).
4. Define amendment majorities, with a heightened majority for critical decisions (purpose, capital, exclusion).
5. Coordinate with the shareholders' agreement: reference execution details without spelling them out in the bylaws.

A useful approval clause does not merely require consent: it organises the whole procedure. Robust drafting specifies, for instance, that "any transfer of shares to a third party is subject to the prior approval of the shareholders acting by a two-thirds majority; the competent body has three months to rule, its silence amounting to approval; in case of refusal, the company or the shareholders repurchase the shares within six months at a price set, failing agreement, by an expert appointed under article 1843-4 of the Civil Code." This precision — majority, deadline, meaning of silence, consequence of refusal and pricing mechanism — avoids the most common deadlock: a shareholder stuck with no exit and no reference price. It is exactly the kind of drafting we secure with legal counsel in company law.

SASU (sole shareholder). Governance lightens, but provide a succession clause and, where relevant, a lock-up to protect heirs. Moving to multiple shareholders is prepared like a structure conversion.

Investor entry. Reinforced approval, veto rights on certain decisions, qualified majorities: points to settle before the round, often with legal counsel in company law.

Group (holding + subsidiary). Anticipate minority rights on group decisions and a possible liquidation-preference clause.

• Approval without a repurchase price: the exiting shareholder is left without a solution. Always provide the pricing mechanism.
• Pre-emption without hierarchy: with several repurchase candidates, conflict is guaranteed.
• Lock-up beyond 10 years: the clause is void; do not artificially extend it via the agreement.
• Unset majorities: the law applies default unanimity (art. L.227-19) for certain decisions; a decision passed by an unprovided majority is fragile.
• Mandatory statutory auditor: required once the SAS exceeds, over two consecutive years, two of three thresholds — revenue above €12M, balance-sheet total above €6M, more than 50 employees — or if it controls or is controlled by one or more companies.

As a chartered accountant registered with the Ordre des experts-comptables and a statutory auditor, we find that most shareholder conflicts stem from overly brief bylaws. Recently, two founders had used a free online template mentioning approval but with no deadline, majority or consequence of refusal. When an investor arrived three months later, the disagreement turned into deadlock, for lack of procedure and pricing clause. Precise bylaws — approval at a 75% majority, a response deadline, repurchase at an expert-determined price on refusal — would have avoided several weeks of paralysis.

Second observation: a SAS without a shareholders' agreement is often an empty shell. The bylaws set the enforceable frame; the agreement protects minorities and organises execution (vesting, anti-dilution, exit). Drafting it at incorporation costs far less than resolving a conflict for lack of one.

Hayot Expertise advice. Statutory freedom has value only if used consciously. Take the time to draft — or have drafted — clauses suited to your profile (startup, family SAS, investment SAS), and anticipate the shareholders' agreement from incorporation. Our business creation in Paris, combined with legal counsel in company law and the follow-up of your chartered accountant in Paris, secures this foundational step. The choice between close forms is prepared with our SASU vs EURL comparison.