In the functioning of societies, majority rule is the guiding principle for ensuring the effectiveness of collective decision-making. However, this rule can sometimes be diverted from its original purpose, leading to what doctrine and case law have long described as abuse of the majority (Cass. Com., April 18, 1961, no. 59-11.394).
This legal mechanism has become a fundamental element in the protection of minority partners against the potential excesses of majority power.
This article plunges you into the heart of this imbalance, between legitimate power and drift, to understand how the law frames these abuses — and how to challenge them.
1. Definition of abuse of majority
The abuse of majority is based on the violation of article 1833 of the Civil Code, according to which the company is constituted in the common interest of the partners and managed in its social interest.
Thus, as case law constantly recalls, two cumulative criteria must be met to characterize majority abuse (Cass. Civ. 3E, July 8, 2015, no. 13-14.348):
1. A decision that is contrary to social interest
2. An intention to favour the majority at the expense of the minority
The simple fact of “losing a vote” is not enough to characterize the abuse: the decision must also cross this border, which is often unclear, between legitimate majority strategy and misuse of collective interests.
What about unanimity?
According to the Court of Cassation, the unanimity of the partners cannot constitute an abuse of majority (Cass. Com., November 8, 2023, 22-13.851). This statement, which is categorical in tone but minimalistic in motivation, raises a number of questions.
2. Examples: the multiple faces of majority abuse
Majority abuse does not have a unique costume. It is disguised as a strategic decision, a management choice or a technical maneuver. But behind these appearances lies an intention: to favor the majority at the expense of the minority, with no justification linked to social interest.
A few examples:
📌 Misappropriation of value: capture to better deprive
Majority partners can use their power to direct the wealth of the company for their exclusive benefit, disregarding internal balances.
👉 Unjustified refusal to distribute dividends: even though they are paid via other channels (salaries, various benefits), the majority are systematically opposed to the distribution of dividends. Minorities, on the other hand, have no right to anything.
This is only an abuse if executive remuneration is unjustified or if systematic stockpiling is contrary to social interest (Cass. Com., June 6, 1990, no. 88-19.420; Cass. Com., August 30, 2023, no. 22-10.108; Cass. Com., June 10, 2020, no. 18-15.614).
👉 Massive increase in remuneration: the majority managing partners are voting for a 300% increase in their remuneration, causing the collapse of net income and ending the distribution of dividends (Cass. Com., January 15, 2020, no. 18-11.580).
👉 Unequal distribution of benefits: the majority decides to break the equality in the sharing of benefits, to oust a minority (Cass. Civ. 1re, May 19, 2021, no. 18-18.896).
📌 The dilution of power: weakening without reason
When the objective of a decision is not economic, but political — to weaken a minority — the law speaks of abusive dilution.
Thus, an abuse of a majority majority is the decision by a meeting of a capital increase just before the sale of an important asset without the sole purpose of diluting the minority stake (Cass. Civ. 3E, July 8, 2015, no. 13-14.348).
📌 Strategic sabotage: empty and conquer
Some abuses are more sophisticated: they aim to change the structure or organization of society to rule out minority control.
👉 Transformation of the parent company into an “empty shell”: through a capital operation, the majority transfers the shares of the subsidiary to a limited company limited by shares that it alone controls. The parent company loses all economic substance, the minorities all power, abuse is characterized (Cass. Com., January 24, 1995, no. 93-13.273).
👉 Strategic liquidation: without serious reasons, the majority partner decides to dissolve the company to avoid its contractual commitments to a minority: the decision, taken in purely personal interests, is cancelled (Cass. Com., February 8, 2011, no. 10-11.788).
👉 Sale at a low price: Majorities vote for the sale of an asset below the market price to a structure that they own alone. The abuse is obvious: the Court sanctions (Cass. Com., May 24, 2016, no. 14-28.121).
📌 The confusion of interests: society at the service of a single
Sometimes, abuse is due to the use of society as a personal tool, to guarantee transactions that are unrelated to its purpose.
This is the case with mortgage security for a personal loan: a company grants a mortgage guarantee to a banking institution... not for its own account, but to guarantee a loan granted to the majority partner. No social interest: the Court sanctions (Cass. Civ. 3E, March 25, 1998, no. 96-17.307).
3. Penalties
Recognition of an abuse of majority may result in two types of sanctions:
a. Annulment of the decision
It is the flagship sanction. The judge can simply cancel the resolution passed improperly in the meeting.
This of course presupposes legal action brought within the time limit: this deadline is set at 3 years for decisions prior to 1Er October 2025, date from which it will increase to 2 years in accordance with the wording of article 1844-14 of the Civil Code resulting from ordinance No. 2025-229 of 12 March 2025.
b. Damages
If the cancellation is not sufficient to repair the damage (loss of dividends, devaluation of shares, etc.), minorities can also seek compensation on the basis of civil liability.
A period of 5 years to request the award of damages (Cass. com., May 30, 2018, No. 16-21.022).
💬 Are you a minority and suspect an abusive maneuver?
Each case is unique, but the law offers options for action.
👉 Contact me to discuss it!
