Every company has a director, whose name is recorded in the articles of association. The manager's role is to ensure the company's economic profitability, with a view to building up equity for the future and remunerating the risk taken by the shareholder.
He is also in charge of developing the company's employment and social assets. They may or may not be partners. Managers, like any other employee, can be replaced during the life of the company.
However, this change must comply with specific formalities to ensure legal compliance. It is essential to follow a three-step procedure: appoint the new director, inform third parties, and update the legal information concerning your company in the RCS.
Failure to comply with the procedure can result in substantial penalties for the company.
Here are all the steps you need to follow in order to make a smooth transition to a new company director .
Each company has its own Articles of Association, which set out the details of its operations.
The K-Bis is a document containing all this information, including the name of the director. The name of the director must be entered on the company's articles of association, which is why it is compulsory to amend them.
The K-Bis must always be up to date in order to provide accurate information to third parties.
Amendments to the bylaws are decided at an Extraordinary General Meeting attended by all associates.
They must decide together, through a vote, to dismiss the former director (if this is the reason for the change of director) and appoint a new one to replace him/her.
In a SARL or EURL, in the absence of a higher majority specified in the bylaws, the decision to replace the director is approved if it is supported by the votes of one or more partners holding more than half the company's shares. In a SAS (simplified joint stock company), the shareholders' meeting defines the terms and conditions for replacing the director.
In SASU, the decision is taken unilaterally by the sole shareholder.
All the choices made at the Extraordinary General Meeting are recorded in minutes. It is possible toissue new articles of association containing the name of the new director, or simply to produce a separate deed.
This second solution is less administratively burdensome and avoids the need to amend the Articles of Association in their entirety each time there is a change of manager.
The second step is to inform third parties of your decision. To do this, you must publish a legal announcement in an approved newspaper. The company hasone month in which to do this. The published announcement must include the following information:
- Company name and legal form, address of registered office, SIREN number, amount of share capital, RCS registration number and town concerned
- Explicit mention of the change in company officer
- Name of former manager and reason for change
- The name of the new manager
This stage is for information purposes only
Once all the above steps have been completed, all that remains is to officially register your decision with the authorities by submitting your complete file to the CFE (Centre de Formalités des Entreprises).
It must contain the following documents:
- The minutes of the shareholders' meeting appointing the new director, certified by the legal representative.
- A copy of the updated bylaws
- A copy of the certificate of publication in a legal gazette
- Identification of company director
- A declaration of non-conviction by the new manager
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Completed form M3 or M3 SARL-SELARL
This procedure also requires payment of variable fees (depending on the CFE) to the commercial court clerk's office.
In practice, changing the name of a company's director is not a complicated act, provided that the procedure laid down by law is scrupulously followed. Otherwise, the decision could be overturned by the Commercial Court , forcing the company to pay fines.
Some companies seek professional advice to modify their articles of association.
Written by our expert Paul LASBARRERES-CANDAU
January 28, 2019
