Shareholders' agreement vs partners' agreement

French business law offers many forms of legal structuring, each meeting specific organisational and governance needs. Among the most strategic contractual tools are the shareholders' agreement (pacte d'actionnaires) and the partners' agreement (pacte d'associés), two instruments that are often confused but have distinct legal characteristics. These agreements, which sit outside the articles of association, allow holders of company shares (parts sociales or actions) to organise their relations beyond the strict legal framework, whether to structure the control of a business, plan a transfer or frame the entry of investors. This article examines the legal specificities of each instrument, their respective fields of application and the decisive criteria for choosing the instrument best suited to each corporate situation.

Legal nature and scope

Shareholders' agreement: the instrument of companies limited by shares

The shareholders' agreement is an agreement concluded between all or some of the shareholders of a company limited by shares, whether a public limited company (société anonyme, SA), a simplified joint-stock company (société par actions simplifiée, SAS) or a partnership limited by shares (société en commandite par actions, SCA). This agreement, which sits outside the articles of association, makes it possible to organise relations between shareholders on terms that are more flexible and more confidential than the articles.

The contractual nature of the shareholders' agreement gives it binding force between the signatories, in accordance with the general principle laid down in Article 1103 of the French Civil Code, under which "contracts lawfully formed take the place of law for those who have made them". This contractual force makes it possible to impose on the signatories obligations that do not apply to the other shareholders who are not party to the agreement.

Article L225-106 of the French Commercial Code indirectly illustrates this logic by providing that "a shareholder may be represented by another shareholder, by his or her spouse or by the partner with whom he or she has entered into a civil solidarity pact". This provision shows the legislature's recognition of the particular ties that may link certain shareholders.

Partners' agreement: the agreement of partnerships

The partners' agreement applies to partnerships (sociétés de personnes) and to hybrid forms such as the SARL (private limited company) and the EURL (single-member private limited company). It therefore concerns the partners of general partnerships (sociétés en nom collectif, SNC), limited partnerships (sociétés en commandite simple, SCS) and non-trading companies (sociétés civiles), as well as the partners of SARLs.

This terminological distinction reflects a fundamental conceptual difference: in partnerships, the personal quality of the partner (intuitus personae) takes precedence over the financial contribution, unlike in companies limited by shares, where the emphasis is on investment. The partners' agreement expresses this personalised logic by allowing relations between partners to be adapted to their individual circumstances.

Non-trading companies illustrate this personalised approach well. A medical practice set up as a professional non-trading company (société civile professionnelle) may thus provide, in a partners' agreement, specific clauses on the allocation of clients, the arrangements for cover in case of absence, or the conditions for transferring shares to a colleague.

Differences in legal regime

Enforceability against third parties and publicity

The shareholders' agreement has the advantage of confidentiality. Unlike the articles of association, which are publicly filed with the registry of the commercial court (greffe du tribunal de commerce), the agreement remains a private contract between its signatories. This discretion is particularly valuable in negotiations with investors or in sensitive sectors where disclosure of shareholder arrangements could harm commercial strategy.

This confidentiality, however, comes at the price of limited enforceability against third parties. The agreement has legal effect only between its signatories and cannot be relied on against third parties or non-signatory shareholders. A shareholder who sold shares in breach of a pre-emption clause contained in a shareholders' agreement could not have the sale set aside if the buyer was acting in good faith. The enforceability regime of these agreements and its recent case-law developments are covered in our article on the shareholders' agreement and the partners' agreement in 2026.

The partners' agreement follows the same general rules of enforceability, but its practical application differs because of the nature of the companies concerned. In a SARL, where share transfers are subject to strict formalities and to publicity at the registry, the existence of a partners' agreement can more easily be brought to the attention of interested third parties.

Freedom of contract and legal limits

Both types of agreement benefit from broad freedom of contract, but within different legal frameworks. The shareholders' agreement must comply with the mandatory rules governing public limited companies or SAS, in particular as regards the majority required for certain decisions and shareholders' voting rights.

Case law nevertheless allows considerable flexibility. The courts thus uphold concerted voting clauses, agreements on the appointment of directors, and undertakings to sell on predetermined terms, provided that they do not wholly deprive a shareholder of his or her fundamental rights.

The partners' agreement enjoys even greater freedom, particularly in non-trading companies, where party autonomy largely prevails. The partners may thus provide for operating arrangements far removed from the general company law, provided that they do not distort the nature of the partnership contract. The characteristics and legal regime of this corporate form are set out in our article on the definition of the société civile.

Practical applications and standard clauses

Governance and control clauses

In a shareholders' agreement, governance clauses often aim to organise the control of a listed company or of a family holding company. Voting agreements make it possible to coordinate the exercise of voting rights on strategic decisions: approval of the budget, appointment of officers, external growth transactions.

A classic example concerns family companies in which several branches hold interests. The shareholders' agreement may provide that no strategic decision will be taken without the consent of the representatives of each branch, even if one of them holds the majority of the capital. This consensual approach preserves family unity while maintaining decision-making efficiency.

Partners' agreements in SARLs often favour more personalised mechanisms. In a family SARL operating a business (fonds de commerce), the agreement may allocate operational responsibilities between the partners: one devotes himself or herself to business development, another to administrative management, the third to relations with suppliers.

Transfer and succession clauses

Transfer clauses are one of the major issues in these agreements. The shareholders' agreement makes it possible to organise the liquidity of holdings in unlisted companies, where there is no organised market.

The pre-emption clause gives the other signatory shareholders a priority right in the event of a sale. Its implementation requires a mechanism for notifying the proposed sale, a period for reflection for the beneficiaries of the pre-emption right, and arrangements for determining the price (adopting the price offered by the third party, an adversarial expert valuation, or a predetermined valuation formula).

Tag-along clauses (tag along) and drag-along clauses (drag along) respond to opposite but complementary logics. The first protects minority shareholders by allowing them to sell their shares on the same terms as the majority shareholder who is negotiating an exit. The second allows the majority shareholder to compel the minority shareholders to take part in a global sale, preventing them from obstructing a strategic transaction.

In partners' agreements, succession clauses often take into account the family or professional dimension of the activity. An accountancy firm organised as an SCP (société civile professionnelle) may provide that the shares of a deceased partner pass first to his or her children if they practise the same profession, or failing that to the other partners under a valuation formula that takes into account the deceased's personal client base.

Financial and valuation clauses

Shareholders' agreements frequently include sophisticated valuation clauses, particularly on the entry of financial investors. Ratchet clauses retroactively adjust the valuation terms of earlier financing rounds if a later round is made at a lower valuation.

Liquidation preferences guarantee investors a priority return of their investment on a sale or liquidation, before any distribution to the other shareholders. These mechanisms, inspired by US law, are gradually being adapted to French company law.

Partners' agreements favour simpler valuation formulas, often linked to the actual activity of the business. In a cost-sharing non-trading company (société civile de moyens) bringing together several liberal professions, the valuation of shares may be based on each member's share of use of the common resources (premises, equipment, staff) rather than on abstract financial criteria.

Tax aspects and wealth planning impact

Tax regime for capital gains

The distinction between shareholders' agreement and partners' agreement produces different tax consequences, particularly as regards capital gains on disposal.

For shares (actions), the regime for capital gains on transferable securities applies with its specificities: relief for length of holding, the possibility of deferring taxation in the event of an exchange, and the favourable regime for managers of small and medium-sized enterprises. The clauses of the shareholders' agreement can optimise these tax advantages by organising disposals according to an optimal tax timetable.

Company shares (parts sociales) in SARLs or non-trading companies fall within the regime for capital gains on movable property, with different relief and exemption rules. The partners' agreement may thus provide for staggered disposals so as to benefit fully from the annual exemption thresholds.

Succession planning

Both types of agreement offer opportunities for succession planning, but in different ways.

The shareholders' agreement may include clauses for gradual generational transfer, allowing older managers to hand over control gradually to their successors while retaining economic rights. These arrangements are often combined with lifetime gifts divided among heirs (donations-partages) or with wealth-holding structures.

The partners' agreement in non-trading companies allows more flexible optimisation. The holding société civile may hold interests in the family business, while the shares of the société civile are gifted to the children, with the allowances that are renewable every fifteen years.

Dispute resolution and exit mechanisms

Mediation and arbitration procedures

Shareholders' agreements systematically include dispute resolution clauses, given the often considerable financial stakes. Mediation is generally the first mandatory step, allowing the parties to seek an amicable solution with the assistance of a neutral third party.

Arbitration then becomes the preferred method of settling disputes. Its confidentiality protects the company's image, while the arbitrators' expertise in business law ensures an informed decision. Specialised arbitration chambers are developing consistent case law on the interpretation of standard clauses.

Partners' agreements often favour more informal mechanisms, suited to the human dimension of the companies concerned. In a professional non-trading company, the dispute may be submitted to arbitration by the competent professional body, which has in-depth knowledge of the practices of the profession.

Forced exit mechanisms

Compulsory exit clauses (squeeze-out) allow a partner or shareholder who fails to comply with his or her contractual or statutory obligations to be excluded. These mechanisms must reconcile economic efficiency with respect for the fundamental rights of the partner concerned.

In shareholders' agreements, compulsory exit is often built around the breach of non-competition or confidentiality clauses. The forced buy-back of the shares is then carried out at a predetermined valuation, generally discounted compared with the valuation applicable on a voluntary sale.

Partners' agreements in partnerships may provide for the exclusion of a partner for good cause, a notion that case law interprets strictly. Serious and lasting disagreement, the impossibility of working together, or breach of professional obligations may justify an exclusion, subject to compliance with adversarial procedures. The sources of conflict, the protection of minority partners and the solutions for leaving a company are analysed in our article on disputes between partners.

Evolution and adaptation of agreements

Periodic review clauses

Shareholders' agreements and partners' agreements must adapt to the development of the business and its environment. Automatic review clauses provide for a periodic re-examination of the contractual provisions, generally every three to five years.

This review may concern valuation formulas that have become inadequate as the business has developed, governance mechanisms that need to be adapted to a new company size, or transfer clauses that need updating in line with the market.

Admission of new signatories

The entry of new shareholders or partners requires them to adhere to the existing agreements or the negotiation of amendments reflecting their specific circumstances. This integration must preserve the overall balance of the agreement while meeting the legitimate expectations of the newcomers.

Investment funds often bring their own contractual standards, inspired by international practice. Integrating them into an existing shareholders' agreement requires a delicate balance between French practice and the investor's requirements.

Frequently asked questions

Can a shareholders' agreement prevail over the company's articles of association?

A shareholders' agreement cannot derogate from the provisions of the articles that it directly contradicts. In the event of conflict, the articles prevail in relations with third parties and the company, but the agreement retains its binding force between the signatories. Prior coordination between the articles and the agreement avoids these difficulties of interplay.

Are heirs bound by the partners' agreement signed by the deceased?

Heirs are not automatically bound by agreements signed by the deceased, unless there is an express clause providing for transmissibility. The agreement may, however, provide for mechanisms for the compulsory buy-back of shares passing by succession, on valuation terms specific to that situation.

How can a non-competition clause in a shareholders' agreement be enforced?

The effectiveness of a non-competition clause requires that it be limited in time, in space and in its subject matter, and that it be accompanied by a proportionate financial consideration. Its breach may give rise to damages and, where appropriate, to the compulsory exit of the defaulting shareholder in accordance with the arrangements provided for in the agreement.

Can a partners' agreement provide for the removal of a partner-manager?

The removal of a partner-manager of a SARL is governed by the strict legal rules of Article L223-25 of the French Commercial Code. The partners' agreement may organise the practical arrangements for this removal (formal notice procedure, conditions of an enhanced majority) but cannot derogate from the manager's statutory protections.

Can banks require disclosure of shareholders' agreements?

Credit institutions may legitimately request disclosure of shareholders' or partners' agreements as part of their credit risk analysis, in particular to assess the stability of the shareholding and the governance outlook. This disclosure forms part of the duty of transparency of the credit applicant.

How are shares valued under a partners' agreement of a société civile?

The valuation of shares in a société civile may be based on net book assets, the market value of the assets held, or a mixed formula taking into account the income distributed. The partners' agreement must provide for the method of expert valuation in the event of disagreement and designate experts acceptable to all parties.

Is a shareholders' agreement signed abroad valid in France?

A shareholders' agreement signed abroad in respect of a French company must comply with the mandatory French rules of company law. Clauses that comply with foreign law but are contrary to French public policy rules would be unenforceable. A prior legal analysis is necessary to secure these international arrangements.

The distinction between shareholders' agreement and partners' agreement reflects the diversity of French corporate forms and their specific legal logics. Each instrument meets distinct needs: optimising control and liquidity for the shareholders of companies limited by shares, and a personalised organisation of relations for the partners of partnerships. The choice between these two types of agreement depends as much on the corporate form adopted as on the objectives pursued by the signatories. In all cases, the drafting of these agreements requires in-depth legal expertise in order to coordinate the contractual provisions with the applicable company law and to anticipate the future development of the business. Before any commitment, an overall legal and tax analysis of your situation will make it possible to identify the contractual instrument best suited to your wealth planning and business objectives.