SCI clauses and shareholders' agreements: approval, pre-emption, reciprocity

Quick answer. In an SCI, share transfers are by default subject to the approval of all partners (Civil Code art. 1861), but the articles can soften or tighten this rule. To this are added pre-emption, reciprocity or inalienability clauses, inserted in the articles or in a confidential shareholders' agreement, to control who enters, who exits and on what terms.

An SCI often brings together partners linked by family or a common project, and the question of exit can become explosive if nothing has been planned. Statutory clauses and the shareholders' agreement serve precisely to organise entry and exit, to avoid the arrival of an unwanted third party and to smooth buybacks. Let us review the available tools.

The foundation of partner control is the approval clause, provided by default in any civil company.

Article 1861 of the Civil Code states that shares can only be transferred with the approval of all partners. The articles can however adjust this rule: provide for approval by a set majority, entrust it to the manager, or exempt certain transfers from approval, notably between partners, to the spouse, or to the transferor's ascendants and descendants. The planned transfer must be notified to the company and to each partner, who decide on the approval.

This flexibility allows the degree of control to be tailored to the nature of the SCI: very closed for a family SCI keen to stay among relatives, more open for an SCI bringing together business partners.

The pre-emption clause organises a priority of purchase for the existing partners.

When a partner wants to transfer their shares, the others have a right to acquire them in priority, before any third party, generally at the price offered by the prospective buyer or under a planned valuation method. This clause avoids dilution and the arrival of an unchosen newcomer, while offering an exit to the transferor. It often combines with approval for full control of capital movements.

Other clauses frame the freedom to transfer more strongly, to stabilise the ownership.

The inalienability clause temporarily prohibits the transfer of shares, for a limited duration justified by a serious and legitimate interest, in order to freeze the ownership for the time of a project. So-called reciprocity clauses organise cross commitments between partners, for example a mutual obligation to offer one's shares to the others before any third party, or reciprocal buy-and-sell mechanisms in case of disagreement. These more sophisticated clauses often find their place in a shareholders' agreement.

The choice between the articles and the agreement is not neutral, because their scope differs.

The articles are a filed document enforceable against third parties: a breached statutory clause can entail the nullity of the transfer. The shareholders' agreement is a confidential contract between partners, more flexible and discreet, but whose breach is mainly resolved in damages, without necessarily cancelling the operation. So you place in the articles what must be enforceable and solid, such as approval, and in the agreement what relates to finer arrangements between partners, such as certain reciprocity clauses. The right balance depends on the configuration, a subject we link to the overall wealth structuring developed in our comparison SCI or direct ownership.

The partner clauses of an SCI are not a legal luxury: they prevent the conflicts that, for lack of anticipation, often end in deadlock or court. Approval and pre-emption form the minimal foundation of any SCI bringing together several partners.

We advise calibrating these clauses at the time of creation, when relations are good, rather than waiting for the first dispute. The articles-and-agreement pair allows enforceability and confidentiality to be balanced. For a family SCI geared towards transmission, these clauses combine naturally with the split ownership of shares, as we explain in our article on the split ownership of SCI shares to pass on.

An SCI brought together three partners with no clause framing transfers beyond the legal approval. When one of them wanted to sell his shares to an outside third party, the other two found themselves with no organised purchase priority and no agreed valuation method, on the brink of conflict. The analysis led to introducing, through an amendment of the articles and an agreement, a pre-emption clause with a price formula and a reciprocal buyback commitment in case of disagreement. The SCI regained clear governance, and the partner's exit happened without a rupture.