How to remove or change an executive (CEO or C-level)?
The rules for removing directors differ according to two factors:
- The legal form of the company
- The company's Articles of Association
In the event of the removal of an executive in an SAS, the conditions for the removal of the CEO are freely provided for in the Articles of Association (terms for the exercise, quorum).
As a result, it is possible to plan a revocation with or without prior notice, with or without notice, be it on reasonable ground or not. In any case, the removal of the CEO of an SAS must not be abusive in the sense understood by the case law, i.e. the dismissal must not be sudden, vexatious or humiliating, under penalty of being liable for damages.
In the event of the removal of the head of an SARL, the rules are outlined in the French trade legislation. The revocation is valid as long as the voting conditions are met:
- An absolute majority will be required at the first convening of the ordinary general meeting
- A relative majority will be required on second notice of meeting
As in the case of a dismissal of an SAS officer, the abusive dismissal of a SARL manager may result in the payment of damages.
In addition, if the corporate mandate is associated with an employment contract, then the removal of the head of the SARL may be compensated by the payment of damages based on his last gross annual salary.
In the case of a SCI, the manager may be dismissed by decision of the shareholders representing more than half of the shares. As is the case with an SARL or an SAS, the abusive dismissal of the manager of an SCI may give rise to the payment of damages.
The role of the President of an SAS
The number of shareholders in your company
After your incorporation: what is left to do?
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