Who Are the Directors of an SAS in France?

The Société par Actions Simplifiée (SAS) has become the most popular corporate form in France thanks to its governance flexibility. Unlike the Société Anonyme (SA) or the SARL, which are framed by detailed legal provisions, the SAS grants shareholders the freedom to define management powers in the bylaws.

But despite this freedom, the SAS is not without rules. French law imposes one essential requirement: the company must always have a president, who is its legal representative. Beyond that, shareholders may decide whether to appoint other directors such as managing directors, or to create collegial governance bodies. The powers of each director are determined by law, the bylaws, and practice — but always subject to one overriding principle: third parties are protected. Even if internal limits exist, the SAS remains bound by acts of its legal representatives, provided those third parties acted in good faith.

This article explores in detail the powers of SAS directors: the president’s role, statutory limitations, delegation of powers, the role of other directors, and the practical consequences of exercising these powers.

1. The President: Mandatory Legal Representative and Central Pivot

At the heart of every SAS stands the president, the only director required by law and the company’s official representative in all dealings with third parties. Far from being a mere formality, this role concentrates both the external face and much of the internal authority of the company. The law grants the president the broadest possible powers to act on behalf of the SAS, while leaving shareholders free to define internal limits in the bylaws. Understanding the extent and boundaries of the president’s powers is therefore crucial for both entrepreneurs establishing an SAS and partners engaging with it.

a. A legal representative required by law

Article L. 227-6 of the French Commercial Code makes it mandatory for every SAS to appoint a president. This is the only director required by law. The president is the legal representative of the company: he or she binds the SAS in all relations with third parties.

This representative status is a matter of public policy: shareholders cannot remove it, share it by default, or transfer it to another body in the bylaws. Only the law can create this function, and only the president holds it unless other representatives (managing directors) are expressly designated in the bylaws.

The president therefore has, by right:

• the power to sign all acts binding the SAS,

• the power to represent the SAS in court,

• the authority to represent the SAS in all dealings with third parties.

b. Broad management powers

Internally, the president has the widest powers to act in the name of the SAS, provided those acts fall within the company’s corporate purpose (objet social). Unlike in an SA, where the law frames internal management powers of the board and CEO, no legal provision restricts the president’s prerogatives in an SAS.

This means that the president can:

• enter into contracts freely in the name of the SAS,

• take out loans,

• grant guarantees or sureties,

• sell assets, including real estate or financial holdings.

In practice: the president’s powers are so broad that unless the bylaws set clear internal limits, the president can commit the SAS on virtually all matters of management.

2. Statutory Limits on the President’s Powers

Although the president of an SAS holds the broadest powers, shareholders may introduce internal restrictions through the bylaws. These limits, however, apply only in relations between the president and the company: they do not affect third parties acting in good faith, who remain protected by law.

a. Limits are valid internally, not externally

The bylaws may restrict the president’s powers, for example by requiring:

• prior authorization from shareholders or a governance committee before certain acts,

• dual signature above a set financial threshold.

However, Article L. 227-6, para. 4 states clearly: these limits cannot be enforced against third parties.

This means that:

• a third party in good faith may rely on an act signed by the president, even if it exceeded the internal limits,

• publication of the bylaws in the Trade and Companies Register (RCS) is not sufficient to prove that a third party knew of the restriction.

The only consequence is internal liability: the president may be held accountable by shareholders for breaching the bylaws.

b. Acts outside the corporate purpose

What if the president signs a contract outside the company’s corporate purpose? Article L. 227-6, para. 2 provides that the SAS will still be bound by the act, unless the company can prove that the third party either:

• knew the act exceeded the purpose, or

• could not have been unaware of it, given the circumstances.

This is a high burden of proof for the company. In practice, courts protect third parties in most cases, making the SAS bound by the president’s actions.

3. Delegation of Powers: Organizational Flexibility

The president may delegate certain powers to others — shareholders, employees, or third parties. Under general law (Articles 1984 et seq. of the Civil Code), a delegation of powers may concern:

• a specific act (e.g., signing a contract),

• a technical mission (e.g., hiring an employee),

• an entire domain (e.g., managing HR).

Delegation may be written or tacit, and it does not need to be published at the RCS. For example: an HR manager who regularly dismisses employees is presumed to hold a tacit delegation of power.

However, delegation does not fully shield the president: if the delegate commits faults or exceeds the mandate, the president may still incur liability for insufficient supervision.

4. Other Directors: Statutory Powers and Representation

Beyond the president, the SAS may also have managing directors or deputy managing directors. Their authority, which must be expressly granted in the bylaws, can extend to full legal representation alongside the president.

a. Managing Directors (DG) and Deputy Managing Directors (DGD)

The SAS may appoint additional directors such as managing directors (directeurs généraux) or deputy managing directors (directeurs généraux délégués). These roles are optional and must be expressly created in the bylaws.

Their powers depend entirely on:

• the bylaws, and

• the clause granting them representation authority toward third parties (Article L. 227-6, para. 3).

Only DGs and DGDs may be vested with such authority. If so:

• they become legal representatives of the SAS, alongside the president,

• they must be registered at the RCS for the representation to be effective in court.

b. Limits on DG powers

Just like for the president, any statutory clause limiting a DG’s authority is ineffective against third parties. For example: even if the bylaws state that a DG cannot sign contracts over €50,000 without shareholder approval, a supplier contracting in good faith remains protected.

French case law (Cass. com., July 9, 2013) and EU Directive 2017/1132 reinforce this principle: no restriction on the powers of legal representatives may be enforced against third parties.

5. Collegial Governance Bodies: Internal but Non-Representative

The SAS bylaws may create a collegial body such as a management board, governance council, or strategy committee. These organs can be entrusted with:

• appointing or dismissing directors,

• approving major transactions (loans, asset sales),

• validating regulated agreements,

• setting strategic orientations.

But one rule is absolute: such bodies can never represent the SAS to third parties. Their powers are internal only.

Example: A strategy committee may block a proposed loan internally. But if the president signs the loan agreement, the SAS will still be bound vis-à-vis the bank, and only the president’s liability may be engaged internally.

6. The Power to Dismiss Employees

Dismissal of employees is a legal act binding the SAS. Who may exercise this power?

• The president always has authority to dismiss, as legal representative.

• A DG or DGD may also dismiss employees if vested with representation power.

• The president may delegate dismissal authority to HR managers or others, even tacitly.

French case law (Cass. mixed chamber, Nov. 19, 2010) has confirmed that tacit delegation is valid: if an HR manager routinely manages staff, dismissals signed by them are valid acts of the SAS.

If dismissal occurs without delegation, the SAS can ratify it afterwards, expressly or tacitly (e.g., by defending it in court).

7. Hierarchy and Distribution of Powers

The bylaws of the SAS should precisely organize the hierarchy of powers between the president, DGs, and DGDs.

Possible structures include:

• Giving the DG the same powers as the president, subject to a presidential veto,

• Dividing powers by subject matter (e.g., president oversees strategy, DG oversees operations),

• Requiring dual signatures for high-value contracts.

However, to be enforceable against third parties, clauses granting powers must appear in the bylaws filed at the registry (Cass. com., June 3, 2008; Dec. 14, 2010).

8. In Practice: Powers and Liability

In daily management, the exercise of power often goes beyond formal titles. Both de jure and de facto directors, as well as delegates, may incur personal liability depending on how authority is exercised and supervised.

a. Legal vs. de facto powers

A person who exercises real management power without being registered (a de facto director) may still incur liability for mismanagement. Courts look at reality over form: if someone behaves like a director, they will be treated as one.

b. Delegation and responsibility

Delegates may be personally liable if they commit wrongful acts or exceed their mandate. But the president may also be held liable for lack of oversight.

This dual responsibility encourages presidents to carefully define and supervise delegations.

Conclusion: Wide Powers, But Strict Liability

The SAS offers maximum flexibility in designing the powers of its directors. The law imposes only one mandatory figure — the president, who always represents the SAS vis-à-vis third parties. Other directors, such as DGs and DGDs, may share this power if expressly provided by the bylaws.

Yet this freedom has limits:

• Internal restrictions cannot reduce the rights of third parties,

• Acts outside the corporate purpose generally bind the SAS, unless bad faith of the third party is proven,

• Delegation is possible and flexible, but does not eliminate the president’s liability.

For entrepreneurs, the key lesson is that bylaws must be drafted with precision: they should clearly allocate roles, hierarchies, and veto rights internally, while remembering that external protection of third parties always prevails.

In summary:

• The president is always the face of the SAS to third parties.

• DGs or DGDs may also represent the SAS if empowered by the bylaws.

• Internal restrictions are valid only between shareholders, not against outsiders.

• Delegation and collegial bodies help organize governance, but do not alter external liability.

The SAS thus combines freedom of internal organization with the rigor of external accountability — a balance that makes it powerful but also demands careful governance.