The partners' pact: a structuring contract to anticipate, organize and secure the life together of partners

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When a company is created by several people, the articles of association constitute the essential legal basis. They allow the birth of society and organize its institutional functioning. However, experience shows that they are not enough to provide a lasting framework for the shared life of partners. The purpose of the partners' agreement is precisely to anticipate sensitive situations and to set clear rules that are known and accepted by all.

Anticipating the tensions inherent in social life

Tensions between partners only rarely arise when the company is formed, when the project is shared and interests are aligned. They appear more frequently in sensitive situations: strategic disagreement, change of pace of work, departure of a partner, personal difficulty or the arrival of a third party in the capital.

The purpose of the partners' agreement is precisely to anticipate these situations, by setting out in advance a contractual framework to prevent foreseeable difficulties from degenerating into open conflicts.

It is an internal organization contract. It does not pretend to solve everything, but allows you to ask the right questions at the right time, when relationships are still peaceful.

A contract separate from the statutes, for operational purposes

The partners' agreement is an agreement concluded between the partners, whether they are founders or entrants. It does not replace the statutes, but complements them.

Contrary to the statutes, the pact is not made public and is only enforceable against its signatories. This confidentiality is one of its main strengths. The statutes organize the relationships of the company with third parties; the pact organizes the relationships between partners.

It thus makes it possible to address subjects that relate more to common life than to institutional functioning: balances of power, organization of work, personal commitments of partners, methods of withdrawal or departure.

From a legal point of view, the partners' agreement is a contract in its own right. It creates real obligations, the violation of which can be punished. As such, it is a particularly suitable instrument for dealing with situations that the statutes treat poorly, if at all.

A tool for regulating the daily life of associates

In notarial and entrepreneurial practice, the pact makes it possible in particular to set the rules relating to the remuneration of partners exercising their activity in the company.

It may provide for a minimum annual remuneration, calculation methods or adjustment mechanisms according to the real activity of each person. It also makes it possible to anticipate situations in which an associate would cease to exercise his function, through withdrawal or exclusion clauses, subject to compliance with the legal and regulatory rules specific to the notary profession.

The pact is also the natural place to insert non-competition or non-reinstatement clauses. These clauses aim to protect the company against a disorganizing departure, while at the same time having to be strictly proportionate in time and space. In the notarial context, their scope remains in practice confined to financial consequences, with appointment and withdrawal falling under the authority of the Keeper of the Seals.

Exclusivity clauses may also be provided in order to regulate, or even prohibit, the exercise of paid external activities, while taking into account the institutional, training or teaching missions inherent to the profession.

Finally, the pact makes it possible to concretely organize the daily life of the office or company, by dealing with the organization of work, absences, holidays, illness or maternity, in conjunction with the pension plans subscribed to. These subjects, which are often sensitive, are precisely the ones that generate the most tension when they have not been anticipated.

A contractual framework intended to last for the long term

The partners' agreement is designed to support the company over the long term. The question of its duration is therefore central.

Contrary to popular belief, a pact is not intended to be temporary or easily revoked. The Court of Cassation accepts that a partners' agreement can be concluded for throughout the life of the company, without constituting a prohibited perpetual commitment.

Since the duration of the agreement is objectively determinable by reference to the existence of the legal person, the partner cannot unilaterally withdraw from it when it becomes binding.

This case law considerably secures the partners' agreement and makes it possible to build a stable contractual framework, particularly in terms of governance, financing or capital control.

The partners' pact as an instrument of governance and internal discipline

The pact plays a decisive role in the organization of real governance in society. It makes it possible to designate certain partners as managers, to limit their powers and to impose prior authorizations for decisions considered sensitive.

It is common for the pact to make certain transactions subject to the agreement of the shareholders' meeting or a specific body, such as a strategic committee. These decisions may concern the hiring of an employed notary, the conclusion of major contracts, the establishment of significant loans, the sale of essential assets or the modification of the strategic orientation of the company.

Recent case law has reminded us that these rules are not purely theoretical. In a judgment of December 10, 2024, the Versailles Court of Appeal ruled that non-compliance with the procedures provided for by a partners' agreement could, by itself, characterize a serious offense, regardless of any subsequent validation by the social bodies.

This decision establishes the pact as a genuine internal disciplinary norm, the ignorance of which exposes the partner concerned to significant functional and asset consequences.

Capital control and the forecasting of disruptive situations

A shareholders' agreement is the preferred instrument for organizing the control of securities movements and securing the composition of capital.

Approval and pre-emption clauses make it possible to regulate any transfer or transmission of shares. Preference and anti-dilution clauses protect some partners against loss of control or excessive dilution. Non-aggression clauses can temporarily freeze existing capital balances.

In the event of a lasting stalemate, the pact may provide for organized exit mechanisms, such as the buy or sell clause, allowing for a quick and final separation when collaboration becomes impossible.

Finally, it makes it possible to regulate the distribution of profits, by providing for distribution rules compatible with the financial commitments of partners, in particular when they use external financing or a holding structure.

The partners' pact is now a central tool for securing relationships between partners. It structures governance, regulates behavior and organizes exit conditions within a legally binding framework.

Recent case law confirms that the commitments made in a pact produce concrete and fully sanctioned effects. In this context, its drafting cannot be improvised.

Conceived on the basis of the reality of the project, the roles played by each person and the economic and financial challenges attached to the shares, the partners' pact becomes a real instrument of stability and sustainability for the company and its partners.