In M&A transactions where minority shareholders remain in the share capital of a company following a change of control of the target, the buyer must pay particular attention to shareholder loans.


Under French law:

  • Undergoing "management expertise" enables minority shareholders of certain types of companies to obtain additional information on specific management acts. Under this procedure, a commercial court appoints a legal expert responsible for preparing a report that assesses the specific management act on which the request for a management expertise is based, with regard to its compliance with the company's corporate purpose, its interests, and the economic opportunity and scope of the operation.
  • Agreements entered into, directly or through an intermediary, between a company and one of the following individuals or entities are referred to as "regulated agreements":
    • its legal representative;
    • one of its directors;
    • one of its shareholders holding more than 10% of the voting rights; or
    • where the shareholder is a legal entity, the company controlling it within the meaning of article L. 233-3 of the French Commercial Code.

These agreements are subject to a specific procedure and, depending on the type of companies concerned, they require the prior consent of the directors or a posteriori approval from the shareholders, unless they are "usual agreements" entered into on arm's-length terms. In any event, regulated agreements are also subject to a report by the statutory auditor (if any) of the company, which is provided to the shareholders' meeting approving the annual accounts.


On 25 September 2019, the Court of Appeal of Bordeaux ruled in favour of a minority shareholder who had obtained:

  • an order to have a management expertise procedure carried out in relation to the claimant's shareholder loan, which had been granted to one of the companies concerned; and
  • an injunction under penalty against the legal representative of two French companies to provide to the claimant the annual accounts and the other corporate documentation of the companies concerned.


On 21 April 2022, the French Court of Cassation confirmed that a shareholder loan is a management act that may give rise to a request for a management expertise procedure.

As well as ruling on this matter, the Court mentioned that any shareholder loan must be regarded as a regulated agreement.


Two immediate conclusions may be drawn from this decision.

First, in the event of an acquisition where there are minority shareholders within the share capital of the target, the buyer providing a shareholder loan to the target must ask itself whether the regulated agreements procedure must be complied with.

However, despite the generality of the affirmation of the French Court of Cassation setting out that shareholder loans are regulated agreements, it should be noted that this decision was issued in a restricted formation, which suggests that it is not a general decision that applies to a wide scope of situations. As a result, it could be argued that a more objective approach is necessary to determine whether a shareholder loan is a regulated agreement or a "usual agreement" entered into on arm's-length basis.

Second, if the loan granted by a minority shareholder is not repaid following a change of control, the buyer must be aware that, as long as such loan remains in place, it might be a way for such minority shareholder to obtain a management expertise procedure.

For further information please contact Gwenaëlle de Kerviler, Alain Levy or Nathalie Lastennet at AYACHE by telephone (+33 1 58 05 38 05) or email ([email protected], [email protected] or [email protected]). The AYACHE website can be accessed at