Selling to an outsider requires approval

Imprimerie Vasseur SARL has three members and 1 000 shares. One of them wants to sell his 300 shares to an outsider for 45 000 €. He has signed an undertaking and believes himself bound. A sale to an outsider does not, however, rest on him alone. Before you read: what majority is needed, and what happens if it is not obtained?

A double majority

Article L223-14 of the commercial code states the rule in one sentence: shares may be sold to outsiders only with the consent of the majority of members representing at least half the shares.

Two conditions therefore combine, which is what is called the double majority. A majority of members by head is needed, and those members must represent at least half the shares.

A member holding a majority of the capital therefore cannot approve a sale alone: if he stands alone among three members, the majority by head is missing, whatever his share of the capital.

The text finally reserves the power to tighten: unless the articles provide for a stronger majority. The articles may require more, never less, and that is the first thing to check before reasoning on the statutory rule.

Notify, then count three months

The procedure begins with a notification whose reach the text specifies: where the company has more than one member, the proposed sale is notified to the company and to each of the members.

Two distinct recipients are therefore covered. The company as a legal person, and each member taken individually: notifying the company alone does not start the clock.

Silence then counts as acceptance. If the company has not made its decision known within three months of the last of the notifications provided for, consent to the sale is deemed given.

The starting point deserves attention: it is the last of the notifications, not the first. A notification forgotten to one member therefore delays the start of the period, and deemed approval with it.

A refusal that binds

A refusal does not leave the seller trapped with his shares. If the company has refused consent to the sale, the members must, within three months of that refusal, acquire or arrange the acquisition of the shares.

The price is not left to their judgment. It is fixed on the terms provided for in article 1843-4 of the civil code, and the text adds that the cost of the valuation falls on the company.

The seller keeps a way out: unless he withdraws from the sale of his shares. The mechanism therefore protects the company against an unwanted entrant, without turning a refusal into an expropriation of the seller.

The text finally provides for the outcome of inaction. If, at the end of the period allowed, none of the solutions provided for has occurred, the member may carry out the sale originally planned: a refusal not followed through turns against those who made it.

That closing rule is what keeps the whole mechanism balanced. Refusing costs something — the obligation to find a buyer within three months — so approval is not a veto that can be exercised for free and left there.

Read together, the two halves say the same thing from opposite ends. The company controls who joins it; the member controls whether he stays. Neither control is absolute, and each is bounded by the same three-month clock.