In a French SARL (Société à responsabilité limitée), the role of the gérant (manager) is critical. Traditionally, most SARLs operate with a single manager. However, French company law also permits a plurality of managers, often referred to as cogérance. This system can bring flexibility, complementary skills, and continuity in management—but it also creates legal and practical challenges.
At frenchco.lawyer, our team of business lawyers helps entrepreneurs, investors, and family-owned businesses structure their SARLs in compliance with French law. In this article, we explore in depth the merits, limits, and legal consequences of having several managers in an SARL, based on French legal doctrine and case law.
Ensure that multiple managers work with each other, not against. From role definition to opposition clauses, we help you draft clear and enforceable governance rules.
1. The Merits of a Plurality of Managers
Having more than one manager may provide significant advantages for certain SARL companies.
a. Lightening the Workload
A co-manager may help reduce the heavy responsibilities falling on a sole manager. By dividing the day-to-day obligations, tasks can be shared more efficiently.
➡️ However, the law and doctrine note that this justification alone is insufficient. The same goal could be achieved by hiring trusted staff or delegating powers without altering the company’s management structure.
b. Complementary Skills
One of the strongest arguments for cogérance is the ability to combine different skills at the head of the company.
- Example: one manager handles technical production issues, while the other focuses on customer relations.
- This division of labor can significantly improve efficiency in complex or fast-growing businesses.
c. Transfer of Powers and Continuity
Plurality of managers is especially valuable for ensuring succession and continuity:
- Generational transition: A parent can share management duties with a child, preparing them to eventually lead the business.
- Representation of family branches: In family-owned companies, appointing managers from different branches ensures balance and fairness.
- Continuity in case of death: If one manager passes away, the company is not left without legal representation.
⚠️ Important: Even in the case of a sole manager’s death, any partner may convene a meeting to appoint a replacement.
2. The Limits of Cogérance
Despite these merits, plurality of managers is not a universal remedy.
a. Sharing Authority
Appointing multiple managers forces the head of the company to share prerogatives. This may lead to inefficiencies if roles are not clearly defined.
b. Family and Generational Conflicts
While cogérance can smooth tensions, it can also worsen disputes in family businesses. Generational conflicts or diverging interests between family branches are common examples where co-management may backfire.
c. Risk of Deadlock
French law gives each manager broad powers to bind the company. This means that:
- One manager may oppose an operation planned by another.
- With limited exceptions (such as convening meetings), this power of opposition can block company decisions.
3. Appointment of a Co-Manager During the SARL’s Life
Adding a new manager in a SARL affects the legal balance of power.
a. Internal Limitations of Powers
- Any restriction on managers’ powers in their relations with the partners must be written into the articles of association.
- Such restrictions can only be introduced by an extraordinary general meeting, requiring a two-thirds majority (or three-quarters for SARLs created before 3 August 2005) (C. com. art. L. 223-30).
b. Case Law Example
An ordinary meeting once appointed a co-manager and adopted a resolution dividing powers between the two managers. Because the articles of association did not contain provisions defining such limitations, the court declared the resolution null and void (Cass. com., 28 Nov. 2006, n° 03-10684).
c. Replacement Manager Not Recognized
French law does not recognize the concept of a “replacement” or “substitute” manager who automatically takes over if the main manager becomes unavailable.
- Attempting to register such a manager with the Trade and Companies Register (RCS) will be rejected.
- This principle was confirmed in a 2018 opinion by the CCRCS (25 Apr. 2018, n° 2018-002).
4. Cogérance and Third Parties: A Non-Collegial Model
Plurality of managers may give the impression of a collective governing body, but legally, this is not the case.
a. Independent Powers of Each Manager
- Each manager has individual authority to bind the company to third parties.
- The “college of managers” is not a legal entity and cannot act collectively as a board of directors would.
b. Opposition Between Managers
If one manager opposes a decision made by another, the third party involved in the transaction must be formally notified for the opposition to be effective.
5. Internal Governance Structures
While managers act independently toward third parties, the articles of association may create internal structures:
a. Management Council (Conseil de gérance)
- The articles may organize management through a council, defining powers internally between managers.
- However, any restriction of a manager’s powers is unenforceable against third parties.
- The principle dates back to the law of 1925 and has been confirmed by case law (Cass. com., 19 Dec. 1960).
b. Management Committee (Comité de gestion)
- The articles may also establish a simple management committee.
- Its role is purely advisory: examining issues submitted by a manager and issuing opinions.
- Such a committee has no binding authority (Cass. com., 5 Feb. 1973, n° 71-10746).
6. Practical Implications for Business Owners
For entrepreneurs and investors, the decision to appoint multiple managers should be carefully considered:
- When it works best: family businesses preparing succession, companies requiring complementary skills, or structures where continuity is critical.
- When it risks failure: companies with unresolved conflicts, unclear division of roles, or partners unwilling to share authority.
The articles of association should be drafted precisely, specifying roles, limits, and governance mechanisms.
7. Key Takeaways
- Plurality of managers allows task sharing, skills combination, and continuity.
- It is not a cure-all and can worsen internal disputes.
- Restrictions on managers’ powers require an extraordinary general meeting and must be in the articles.
- Toward third parties, each manager acts independently unless opposition is formally communicated.
- “Replacement” managers are not legally recognized in France.
- Internal councils or committees may be created for governance but remain internally binding only.
Avoid Legal Deadlocks in Multi-Manager SARLsPlurality of managers can quickly lead to conflicts if not planned carefully. Our legal team helps you set up internal councils, management committees, and opposition mechanisms that actually work.
Frequently Asked Questions (FAQ)
- Can a French SARL have several managers?
Yes. Partners may appoint multiple managers, each with the power to bind the company. - What are the benefits of cogérance?
It can reduce workload, combine complementary skills, and ensure continuity in case of succession or death. - Does having multiple managers create a collegial board?
No. Each manager has independent authority. There is no collective board similar to that in an SA (Société Anonyme). - Can the partners limit managers’ powers?
Yes, but only internally through the articles of association, adopted by an extraordinary general meeting. These limits are unenforceable against third parties. - Can a substitute manager be appointed?
No. French law does not recognize “replacement” managers. The RCS will not register them. - What happens if managers disagree?
If one manager opposes a transaction, the third party must be formally informed for the opposition to have legal effect.
Conclusion
Plurality of managers in an SARL is a powerful but delicate legal tool. It offers continuity, balance, and complementary leadership, particularly for family-owned or growing businesses. However, it also brings risks of conflict, inefficiency, and legal complexity.
At frenchco.lawyer, we help clients evaluate whether cogérance is right for their company, draft strong articles of association, and ensure compliance with French company law.
Contact us today to secure the right management structure for your SARL in France.
Whether you’re preparing a generational transition or balancing different family branches, co-management must be legally sound. We provide tailored legal frameworks to ensure smooth succession and continuity.
