Pre-emption or Lock-up Clause in a SAS: Which to Choose

Quick answer. The pre-emption clause and the lock-up clause meet two different needs. Pre-emption gives shareholders a priority repurchase right when one of them wants to sell: the transfer remains possible, but shareholders go first. Lock-up purely prohibits selling the shares for a limited period, capped at ten years in a SAS by article L.227-13 of the Commercial Code. You choose pre-emption to keep control over who enters the capital without freezing it; lock-up to temporarily secure a founding team. The two are often combined.

When a SAS is set up, or just before a fundraising round, the same question comes back: how do you prevent a key shareholder from leaving overnight with their shares, or selling them to a third party no one wants on the cap table? Two statutory tools keep coming up, and they are regularly confused in the templates found online: pre-emption and lock-up.

Confusing them is costly. A lock-up placed where pre-emption would have been enough needlessly freezes the capital and may be held void if poorly calibrated. Pre-emption drafted in place of a lock-up, conversely, leaves a founder free to leave at the worst moment. Before filling in your SAS bylaws, you need to know precisely what each clause does, and what it does not.

The pre-emption clause: a priority repurchase right#

Pre-emption (or right of first refusal) does not prohibit the sale. It organises a mandatory step: before transferring shares to a third party, the selling shareholder must first offer them to the other shareholders, on the notified terms. If they exercise their right, they buy; if not, the seller remains free to transfer to the original third party.

A useful pre-emption clause states in the bylaws: the priority order among shareholders, the deadline to decide, the pricing method (price offered by the third party, expert valuation, formula) and how shares are allocated if several shareholders want to pre-empt. Without these details, the clause becomes a source of conflict from the first transfer.

The lock-up clause: a temporary ban on selling#

Lock-up goes further: during its term, the shareholder concerned cannot transfer their shares, even to another shareholder, except for provided exceptions (succession, disability, unanimous consent). It is a lock, not a right of first refusal.

In a SAS, this statutory clause follows a duration rule set by a specific text: under the rules in force in spring 2026, article L.227-13 of the Commercial Code allows the shares to be made non-transferable for a period not exceeding ten years. This is the only cap imposed by the Commercial Code, and it is mandatory: a clause providing for a longer period risks being void.

In incorporation and fundraising files, the choice is driven less by principle than by objective.

Choose pre-emption when you want to stay in control of who enters the capital without barring anyone from leaving. This is the reflex of a family SAS that wants to avoid an outsider joining, or of a company whose shareholders accept that each may leave, provided they first offer their shares to the others. Pre-emption preserves each shareholder's liquidity: no one is a prisoner of their investment.

Choose lock-up when the stake is to keep a team together over a set period, typically a startup's first years or the window of a fundraising round. The incoming investor wants assurance that the founders will not resell their shares as soon as the round closes. Lock-up answers exactly that need, within the ten-year limit.

Combine the two in most structured SAS companies. Lock-up secures the sensitive period; pre-emption then takes over, so future transfers stay controlled. This is the most common architecture we set up with legal advice in corporate law.

The danger is not forgetting these clauses, but drafting them badly. Three traps recur.

A lock-up beyond ten years. The ten-year cap set by article L.227-13 is mandatory. Beyond it, prevailing notarial practice and doctrine consider, as a logical consequence of this public-policy cap, that the duration cannot be extended or tacitly renewed so as to result in a block of more than ten years. This reading is not written word for word in the text; it is widely accepted, but should be assessed case by case. In practice, you therefore avoid artificially extending the lock, and prepare the next stage with other contractual tools.

A lock-up imposed without justification or duration limit. For the SAS, the only textual criterion specific to this clause is the ten-year limit (art. L.227-13, Commercial Code). The often-cited requirement of a serious and legitimate interest does not appear in the Commercial Code: it stems from article 900-1 of the Civil Code, which covers gifted or bequeathed assets, and from case law applied by analogy to statutory clauses. It is therefore not a textual obligation of company law, but a precautionary condition that is widely followed. In concrete terms, it is better to justify the lock-up (protecting the team during the round, securing know-how) and clearly bound it, rather than imposing it bluntly: a justified and limited clause stands up better to a challenge.

A clause in the agreement rather than in the bylaws. A transfer violating a statutory pre-emption or lock-up clause is void (art. L.227-15). The same violation of a mere shareholders' agreement clause gives rise, in principle, only to damages. For a truly enforceable lock, the clause must be in the bylaws; the cofounders' agreement and vesting completes it, it does not replace it.

Two founders set up a SAS with a free bylaws template. They add a pre-emption clause, thinking everything is secured. A year later, an investor enters the capital and requires the founders to commit not to transfer their shares for the duration of the plan. Yet pre-emption guarantees nothing of the sort: it does not prevent a founder from selling, it only organises the priority repurchase. The bylaws must then be amended to add a lock-up, mid-negotiation, under pressure.

Conversely, a SAS that had imposed a ten-year lock-up without pre-emption would find itself, once the lock expires, with no control over future transfers. The two clauses must be designed together, from business creation in Paris and throughout the company's life.

1. Identify the real objective: control entries (pre-emption) or prevent exits during a period (lock-up)?
2. Check the horizon: if the need to lock exceeds ten years, lock-up alone will not be enough; combine it with other mechanisms.
3. Draft the full mechanics: for pre-emption, order, deadline and price; for lock-up, duration, scope, exceptions and justification.
4. Place the lock in the bylaws, not only in the agreement, to benefit from the nullity of an irregular transfer (art. L.227-15).
5. Coordinate with the shareholders' agreement for the fine details (vesting, exit, anti-dilution).

As a chartered accountant registered with the Ordre and a statutory auditor, we see the two clauses confused in most bylaws drafted without support. The sound reflex is to start from the objective, never from the clause. When a director tells us they want to prevent a shareholder from selling, they often think pre-emption while describing a lock-up, and vice versa.

Our reading is simple: pre-emption protects the shareholding over time without depriving anyone of liquidity; lock-up protects a critical period at the cost of a temporary block. Most structured SAS companies need both, properly coordinated, with a shareholders' agreement as backup. And since the lock says nothing about the exit price, also anticipate the taxation of share transfers for the day a shareholder leaves.

Hayot Expertise tip. Before signing your bylaws, have your pre-emption and lock-up clauses reviewed by a professional: a miscalibrated clause is always discovered at the worst moment, during a conflict or a round. Our support for business creation, combined with legal advice in corporate law, secures this trade-off. For a president who holds a minority stake, also see how to secure the power of a minority president.