Shareholders’​ Agreement

In most jurisdictions, the only real obligation of the shareholder is to release the subscription amount of his participation, that is, to pay it.

If he has paid the full amount of the subscription of his participation, initially or subsequently, the term then refers to fully paid-in share capital or shareholding.

If he has paid only part of the subscription in consideration of his participation, and is committed to pay all or part of the balance thereof when the company needs it and will call him to pay the balance through a board resolution, a shareholders resolution or the liquidator’s decision in the event of a liquidation or bankruptcy of the company, this is known as a partially paid-in shareholding or share capital.

However, it is common for shareholders to commit to a certain behavior, to certain contributions in kind or in industry, or even to impose obligations on themselves or the other shareholders in order for the company to survive.

The usefulness of the shareholders agreement is therefore to supplement the applicable law in order to materialize the commitments and / or the obligations of a shareholder necessary in a particular situation.

Duration of the Shareholders Agreement

Like any contract of indefinite duration, a shareholders’ pact can be terminated at any time provided that sufficient notice is given by the notifying party.

It is therefore important to determine as objectively as possible the needs of the parties to set an appropriate duration.

In this regard, in France, in a judgment of November 6th, 2007, the Commercial Chamber of the Court of Cassation (n ° 07-10620) stated that a pact concluded for as long as the shareholders would remain shareholders of the company was deemed to be indefinite and could therefore be terminated early.

Among the objective elements that can be taken into consideration are of course the liquidity outlook, but also the structuring of the debt and hence the need to ensure capital stability.

The arrival of the term will constitute a test of affectio societatis and will be an opportunity to renegotiate the pact in a less anachronistic context.


The section of this article on the duration of the shareholders ‘pact is extracted and adapted to the shareholders’ pact of an article by Nicolas Sidier, Associate Attorney, and Pierre Détrie, Attorney at Law, Péchenard & Associés entitled “The duration of ‘an associate’s pact: a subject that counts