How long can a shareholders’ agreement last?

English summary — the full article was published in French as « La durée de validité d’un pacte d’actionnaires ».

French law prohibits perpetual commitments, and courts have long treated very long-term shareholders’ agreements as terminable at will. Practitioners therefore tended to cap their duration at 15 to 30 years, creating a mismatch with the life of the company.

In a published decision of 25 January 2023 (no. 19-25.478), the Cour de cassation held that a shareholders’ agreement may be concluded for the life of the company — up to the 99-year legal maximum — and cannot then be terminated unilaterally.

Caution remains: agreements running ‘as long as the parties remain shareholders’ are still treated as indefinite, extensions of the company’s life should not extend the agreement indefinitely, and the remaining life of the company should be checked before using this wording.

Read the full article in French →