Nullity of General Meeting of a French property investment company (SCI): only members have the right to vote - decision of the French Supreme Court (Cour de cassation)

Imagine: you own a flat in Isle, a suburb of Limoges, through a family SCI. One day, you learn that a general meeting elected a new manager without you having voted. Worse still, persons outside the company participated in the vote. What to do? The question that every SCI member asks themselves one day: who can really decide in my company? The French Supreme Court (Cour de cassation), in a judgment of 8 July 2015, gives a clear and final answer: only members have the right to participate in collective decisions. Any participation by third parties renders the meeting void. Analysis of a decision that shook poorly managed SCIs.

The facts: a story that happens every day

A family SCI, formed between several members of the same family, owns a building in Panazol, near Limoges. The articles of association provide that in the event of the death of a member, the heirs may transfer their shares to third parties, but only with the approval of the body of surviving members. Problem: after the death of one of the members, his heirs (who are not yet members) participate in a general meeting and vote to elect a new manager. Other third parties, potential purchasers, are also present and vote. A contesting member brings the matter before the court to have this meeting annulled. The case goes up to the French Supreme Court (Cour de cassation), which must decide: can third parties, even with the agreement of the articles of association, participate in collective decisions?

The reasoning of the court — broken down

The French Supreme Court (Cour de cassation) relies on Article 1844 of the French Civil Code, which provides that "every member has the right to participate in collective decisions". It draws a simple rule from this: this right is exclusive to members. No statutory clause, no particular agreement can allow a third party (non-member) to vote or even attend a meeting with voting rights. In this case, the heirs and the third parties did not yet have the status of members (the transfers of shares had not yet been completed). Their participation in the election of the manager therefore deprived the decision of its legitimacy. The Court specifies that nullity is incurred, regardless of whether the presence of third parties was authorised by the articles of association. This is a confirmation of previous case law: membership is an absolute prerequisite for participating in collective decisions. The judges reject the SCI's argument that the statutory clause allowed such participation.

What this changes for you — concretely

If you are a landlord owner through an SCI, this decision protects you: even if the articles of association contain a clause allowing heirs or prospective purchasers to vote, that clause is void. Concrete example: in Panazol, an SCI with three members sees one of them die. His two children, heirs, want to vote for the election of a new manager. If they are not yet registered as members (pending distribution or approval), their vote can be annulled. For purchasers: if you buy shares, you can only vote after the registration of your shares in the share register and the amendment of the articles of association. For tenants: you are not directly affected, but a poorly managed SCI can cause delays in decisions on works or sale. If you are a minority member, you can request the nullity of a meeting in which third parties participated, within 5 years.

Four tips to avoid this type of dispute

• Check the status of participants: before each meeting, require an up-to-date list of members (register of movements of securities). Only admit registered persons.
• Do not rely on the articles of association alone: even if the articles of association authorise the participation of third parties, such clause is contrary to Article 1844 and is therefore deemed unwritten. Have it removed.
• In the event of the death of a member: wait for the approval decision and the registration of the heirs as members before inviting them to vote. Organise a separate meeting if necessary.
• Consult a solicitor for drafting the articles of association: a professional will help you avoid dangerous clauses and advise you on approval procedures.

Further information: related case law and developments

The French Supreme Court (Cour de cassation) had already affirmed this principle in a judgment of 4 December 2012 (No. 11-26.854), but with a nuance: nullity was only incurred if the participation of the third party had influenced the outcome of the vote. In the 2015 judgment, the Court tightened its stance: the mere participation of a third party, even without impact on the outcome, renders the meeting void. This development shows a desire to strictly protect members' rights. Since then, the courts have applied this rule rigorously. Trend: judges are increasingly meticulous about the regularity of general meetings of SCIs. In the future, we can expect even the attendance of a third party without voting rights (simple observer) to be challenged.

In practice: what to do

FAQ: 5 essential questions

1. Can an heir vote before officially becoming a member? No, as long as the shares have not been transferred to him and he is not registered in the register, he cannot vote.
2. What to do if a meeting has already taken place with third parties? You can apply to the court for the nullity of the meeting within 5 years from the decision.
3. Can the articles of association provide for non-members to vote? No, such a clause is deemed unwritten. It cannot derogate from Article 1844 of the French Civil Code.
4. Who can bring a nullity action? Any member who did not vote in favour of the decision, or any third party with an interest (for example, a prejudiced heir).
5. What is the cost of a nullity action? Count between €1,500 and €5,000 in solicitors' fees, plus court costs, but it can save the company from fraudulent management.

Are you in a similar situation? A 30-minute initial consultation with Maître Zakine (€45) can save you months of proceedings — and often much more. Book an appointment →