SAS: pre-emption rights vs approval clauses (2026 guide)

Pre-emption rights and approval clauses in an SAS (2026)

Published: 21 March 2026 — Cluster: Startup Formation and Structuring

In an SAS, two tools structure control over who enters and leaves the shareholding: pre-emption rights (priority purchase rights for existing shareholders) and the approval clause (prior company authorisation). Properly combined and drafted, they secure governance while preserving share liquidity. Poorly calibrated, they block fundraising or M&A and risk invalidity.

1) Definition and legal framework

• Pre-emption right: gives beneficiary shareholders priority to buy, on the notified terms, shares that a seller wishes to sell to a third party.
• Approval clause: makes a share transfer subject to authorisation by a body (general meeting, president, committee). Without approval, the transfer is prohibited.

The principle of free negotiability of shares may be restricted by SAS articles through approval and/or pre-emption clauses, in accordance with the Code de commerce (SAS freedom to draft articles: Legifrance). If the price of a compulsory buyout is disputed, it may be determined by an expert under Article 1843‑4 of the Code civil (Legifrance).

2) Pre-emption vs approval: what objective for your startup?

• Pre-emption: ensures shareholding stability by prioritising insiders without blocking a sale if no one exercises the right. A flexible, quick tool.
• Approval: maximum control over incoming shareholders (strategy, reputation, conflicts of interest). More restrictive: refusal blocks the transfer until solutions in the articles are implemented.

In practice, SAS articles often combine approval + pre-emption: approval first (strategic filter), then pre-emption (allocation among insiders), to reconcile control and liquidity. For a practical overview of SAS approval clauses, see Swapn (2026), and on SAS pre-emption: Legalplace, Digidom.

3) Where to put these clauses: articles or shareholders’ agreement?

• Articles of association: enforceable against everyone, including third parties (through formalities). Ideal for the mandatory rules governing your share capital. Later amendments are more burdensome.
• Shareholders’ agreement: flexible and confidential, but binds only its signatories. If breached by a non-signatory, remedies are limited (damages, or even substitution if collusion is proven).

For a robust structure, put the framework (approval, pre-emption, lock-up) in suitable SAS articles, and refine the detailed mechanisms (founder/investor priorities, exceptions, drag/tag rights) in your shareholders’ agreement.

4) Typical procedure — Pre-emption right

4.1 Trigger

The seller notifies the company (and beneficiaries where applicable) of the proposed transfer, specifying at least the proposed third party’s identity, number of shares, unit and total price, payment terms and conditions precedent. Prefer registered mail with acknowledgement of receipt to establish when time limits start. See the practical reminder: Service‑Public: share transfers.

4.2 Exercise

• Time limit: 15 to 30 days is market standard. Avoid overly long periods that could be considered excessive.
• Allocation if several beneficiaries exercise: in proportion to their holdings or according to a defined priority (founders, investors, etc.).
• Silence: deemed waiver of pre-emption (include a clause).

4.3 Price and closing

• If all shares are pre-empted: sign a transfer instruction and record the transfer in the share movement register.
• If the price is disputed (“fair price” pre-emption): use an Article 1843‑4 expert (Legifrance), with a valuation timetable and postponed closing.
• If no pre-emption right is exercised: the transfer to the third party may proceed on the same terms and within a final deadline (e.g. 3 months), otherwise a new procedure is required.

5) Typical procedure — Approval clause

5.1 Referral to the approval body

• Competent body: shareholders’ general meeting, president or investment committee, according to your articles.
• Application: full buyer identity, number of securities, price, payment terms, proposed agreements and side letters.
• Decision period: set 30 to 60 days. Specify the effect of silence (deemed approval or deemed refusal).

5.2 Refusal of approval: avoid a deadlock

• Buyout solution mandatory in the articles: by the company (repurchase/cancellation) and/or shareholders or a designated third party.
• Completion period: short (e.g. 1 to 3 months) so the seller is not left unable to act.
• Price: if disputed, appoint an expert under Article 1843‑4 of the Code civil.

Official guides explain transfer formalities and possible checks: Service‑Public Pro. For recent practical insights: Swapn.

6) Combining approval and pre-emption: a workable sequence

1. Step 1 — Approval: approve the proposed incoming shareholder.
2. Step 2 — Pre-emption: offer shareholders purchase priority at the same price and on identical terms.
3. Step 3 — Closing: transfer to the approved third party if pre-emption is not exercised, otherwise to the pre-empting shareholders.

This sequence avoids multiple notices and divergent prices. It is compatible with future capital increases (where approval is generally disapplied for investors’ cash-in subscriptions; see the term sheet) and with your term sheet.

7) Drafting: 12 points to secure

• Scope: existing shares, BSA, convertible bonds? Limit it to shares when starting out.
• Transactions covered: sales, contributions, gifts, transfers in lieu of payment, auction sales and intra-group transfers.
• Exceptions: transfers within a group, to a personal holding company, drag/tag and employee liquidity (BSPCE).
• Change of control of a corporate shareholder: mandatory approval/notification.
• Beneficiaries of pre-emption rights and order of priority.
• Timetable: approval, pre-emption, payment and closing deadlines.
• Silence: deemed approval or refusal; waiver of pre-emption.
• Price: identical to the third-party offer; use an Article 1843‑4 expert if fair pricing is provided for.
• Mandatory buyout on refusal of approval: who buys, at what price and within what period.
• Remedies: invalidity of the irregular transfer, damages and contractual penalty.
• Formalities: registered notices with acknowledgement of receipt, share movement register and transfer instruction.
• Hierarchy: interaction between articles/shareholders’ agreement and precedence in a conflict.

To avoid recharacterisation (poorly drafted preferential agreement, de facto approval), follow proven templates and update your shareholders’ agreement: see our guide to shareholders’ agreements: essential clauses.

8) Disputes and remedies

• Breach of an approval clause in the articles: the transfer may be void. The company may refuse to record it in the share movement register.
• Breach of pre-emption provisions in the articles: possible invalidity and/or damages, depending on the clause.
• Breach of a shareholders’ agreement (outside the articles): contractual liability. Substitution of the beneficiary is possible if the third party acted in bad faith (knowledge of the clause + collusion).
• Time limits and balance: abusive deadlines or blocking without a buyout may be sanctioned. Draw on market practices documented by Service‑Public Pro and legal commentary available on Legifrance.

9) Special situations to anticipate

• Death, incapacity, matrimonial property regime: continuation with heirs or buyout by the company/shareholders.
• Gifts, contributions, fiduciary arrangements: make them subject to approval if retaining control matters.
• Funding rounds: a carve‑out for primary issues (cash-in) to avoid blocking the transaction. See the capital increase procedure.
• Employee plans (BSPCE): disapply approval on grant, but retain approval on transfer.

10) Highly practical checklist (founders and investors)

• Include approval and pre-emption in the articles (enforceability), and refine them in the shareholders’ agreement.
• Notify every transfer by registered mail with acknowledgement of receipt with the transferee’s identity, number of securities, price and terms (see Service‑Public).
• Set reasonable deadlines: 30 days for pre-emption, 30–60 days for approval.
• Provide a way out if approval is refused: mandatory buyout + an Article 1843‑4 expert if the price is disputed (Legifrance).
• Consider exceptions (intra-group, personal holding company, change-of-control cases).
• Control the sequence: approval, then pre-emption.
• Document closing: approval minutes, waiver/expiry certificates, transfer instructions and register.

11) Public resources and useful guides

For formalities and procedural reminders: Service‑Public — share transfers, Service‑Public Pro, reference legislation on Legifrance. For an operational view of the clauses: Swapn, Legalplace, Digidom.

12) Before signing: align your documents

Check consistency between articles ↔ shareholders’ agreement ↔ term sheet. After the transaction, update documents to reflect the agreed deal. For post-fundraising relationships, see our practical advice: founder–investor rights and obligations.