Société à responsabilité limitée, SARL, manager remuneration, abuse of majority, judicial removal, penal liability, Commercial Code, Article L223-22, Article L225-252
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Abstract
This document discusses the legal implications of a manager's remuneration in a SARL, including the possibility of abuse of majority, judicial removal, and penal liability.
Extract
[...] The abuse of corporate assets is an intentional offense. If the elements of using corporate assets contrary to the interest of the company are realized in an intentional manner by the manager, then the latter may be punished. Regarding the statute of limitations, the starting point begins on the day when the offense appeared and could be observed under the conditions allowing the exercise of public action. That is to say, on the day of the presentation of the annual accounts to the associates, at the time when the disputed accounts chargeable to the company are presented to the associates. [...]
[...] The principle that the judge will apply is that the manager's remuneration must be in line with the company's profits. If the abuse of majority is established, it would simply lead to the nullity of the decision to increase Trinity's remuneration. She would then have to reimburse what she has perceived in excess. Judicial removal of the manager: The manager can be removed for just causes in accordance with Article L 223-25 al 1er of the Commercial Code. Unfortunately, Trinity being in the majority and removal being possible only by a majority vote at a general meeting, this will not be possible. [...]
[...] It can therefore very well grant itself an increase in its manager's remuneration even if it holds the majority of the shares. The manager's remuneration can only be modified in light of a new decision by the shareholders taken under the same conditions as the one that determined it Legal Problem No : Can a salaried manager increase their salary without holding a general meeting? III) The rules of consultation in assembly : Trinity increased his salary without notifying his partners, at first glance this seems to be a clear violation of the right to information of the partners. [...]
[...] In the present case, the excessive increase in Trinity's remuneration may lead to a deficit for the company if it does not realize sufficient profits to absorb these amounts. - A causal link between the fault and the prejudice suffered. In this case, the excessive remuneration of Trinity could lead to a deficit of the aforementioned company. If the fault is characterized, the manager will then have to reimburse the prejudice in full by paying damages and interest, among other things. [...]
[...] In this case, Trinity holds 60% of the capital, she is the majority shareholder, she cannot therefore be subordinate to the company in the exercise of her functions as an employee. Consequently, she cannot cumulate the two statuses. Legal Problem n° 2 : Can a majority shareholder manager vote for an increase in his own remuneration at a general meeting? II) The manager's remuneration: The manager is often remunerated in practice in accordance with his social mandate. It is not a salary but a compensation. Two judgments set the principles of the manager's remuneration in SARL, (Cass. [...]
