Un entrepreneur may be repealed. He is then relieved of his mission and must cease his functions. These rules apply, for example, to the managers of SARLs or EURLs, to the presidents and general managers of SASUs or SASs and to the members of the supervisory board or to the directors of SAs. In principle, the dismissal of a director is spirit but it can give rise to financial compensation under certain conditions. Here's what you need to know about the legitimate reasons for dismissal of a company director, that is to say its justifications.
Freedom of resignation of a company director without cause
French legislation favors the principle of freedom for resignation of a company director. This rule is public order, which means that any stipulation to the contrary has no legal value. The conditions and procedures to be followed depend on the legal form of the company (SASU, EURL, SAS, SARL, SNC, etc.).
However, if the démission is not based on a just pattern, it can lead to damages in favor of the resigning director. Moreover, she should not to have a character abusive.
Grounds for dismissal of an officer and financial consequences
The principles of dismissal with or without just cause
La shelving of a director without legitimate reason can have financial consequences for the company. This revocation may, in fact, give rise to payment of damages, with the exception of managers of SAS (unless otherwise provided in the company's articles of association), directors or the chairman of the board of directors of a traditional SA, or members of the supervisory board or the chairman of the management board of an SA with a dual structure.
The internal rules of society can cancel the right for the dismissed director to demand benefits. On the other hand, they may also provide for the payment of damages even in the event of revocation for just cause.
Here are examples of situations that may justify a revocation :
- Mismanagement committed by the manager in the exercise of his functions or poor management of social affairs,
- Attitude of the manager likely to compromise the interests of the company or its operation,
- Violation of a legal obligation or a statutory provision (failure to convene the meeting, for example),
- Disagreement between the partners and the manager on the strategy to follow,
- Loss of trust, based on objective elements, of the partners towards the manager,
- Disagreement between several managers leading to the risk of compromising the social interest,
- Inability of the manager to exercise his mandate (depression for example).
Compensation of the executive dismissed without just cause
Apart from the cases of exemption mentioned above, and in the absence of a contrary statutory clause, the executive dismissed without valid reason is entitled to the payment of damages. Their amount depends on theimportance and severity du prejudice experienced by the leader. It can be fixed in the statutes of the company but must not be excessive, under penalty of making the leader irrevocable.
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You want to know more about changes to companies:
What is the main reason for the dismissal of a company director?
Answer: The main causes of the removal of a corporate officer are failure to fulfill his obligations, bankruptcy, abuse of power, mismanagement, failure to comply with rules and laws, and conflicts of interest between leaders and society.
Who can dismiss a company director?
Answer: The dismissal of a company director can be carried out by the board of directors, the supervisory board, the shareholders, or the legal representative of the company.
What are the consequences of the dismissal of a company director?
Answer: The consequences of removing a company officer can include loss of shareholder and customer confidence, damage to the company's image, delays and additional costs in finding a new officer, and problems governance and management.
