Prevention rather than cure: are you ready to define who does what to avoid conflicts?
In many SARLs, several people share the management of the company, without having defined the division of tasks in writing.
In many SARLs, there is a main managing partner, and one or more co-managing partners whose role is limited to supporting the main managing partner in specific areas, such as finance or accounting. Sometimes, in principle, all the partners are managing partners, but only one is really active.
The French Supreme Court (Cour de Cassation) has recently considered such a case. Two partners dismissed one of the managing partners on the grounds that he was not carrying out the accounting tasks required to manage the company, and that the division of tasks between the three managing partners required him to do so.
The managing director contested his dismissal, arguing that not only was he not the only person authorized to carry out the accounting tasks, but that the division of tasks alleged by his co-managers was not recorded anywhere.
This is the reasoning adopted by the Cour de cassation: in the case of joint management, if the articles of association and extra-statutory deeds are silent, one of the managers cannot be blamed for failing to perform an obligation incumbent on the company, when there was no legal or material obstacle preventing the other managers from acting.
In this situation, the manager dismissed without cause may be entitled to damages paid by the Company.
If there is more than one managing director, we strongly recommend that you check that the distribution of obligations is set out in the articles of association or in an extra-statutory deed, so that everyone knows the exact extent of their responsibilities.
We can help you review your articles of association or partnership agreement to personalize them and adapt them to your operational organization.
A word of advice: A successful business is built on solid foundations. Clarify the roles of each co-manager so that you can move forward serenely in managing your business with your partner(s).
