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1. What is a corporate officer?
The corporate officer is a natural person who has a mandate to act on behalf of a legal person which can be a company, an association or any other form of organization. In practice, this is generally the manager or manager. But there may be several corporate officers within the same company, in order to distribute tasks between several people taking into account their skills.
The social mandate is given for a established and limited duration. The title of the mandatary varies according to the legal structure of the entity entrusting the mandate:
- Manager for a SARL;
- President for a SAS or a SASU;
- Chief Executive Officer (CEO) for a SA;
- President for an association.
The corporate officer represents the entity and makes the decisions necessary for its operation and daily management. As such, he can sign contracts or convene a general meeting. He acts in the interests of society, with loyalty and diligence.
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2. Access to the function of corporate officer
The appointment of the corporate officer
The appointment of an agent is not necessarily a topic for small businesses where representation and management functions often rely on the sole partner. However, nothing prevents you from anticipating the growth of your business and organizing the social mandate.
The appointment of the corporate officer is determined in the statutes of the legal person. It can be a:
- Nomination by Statutory act by the partners at the time of drafting the articles of association;
- Nomination by Vote in the general meeting ;
- Appointment by mandate contract signed between the company and the corporate officer.
The end of the social mandate
The statutes provide for the duration of the mission, as well as the renewal terms and revocation. But the law establishes a framework according to the legal regime of the company. Thus, theArticle L 225-94 of the Commercial Code specifies that the corporate officer may not exercise more than 5 consecutive mandates, or even 3 mandates for SAs that employ at least 5000 permanent employees in the company and its subsidiaries.
The social mandate ends with:
- The resignation of the mandatary;
- The non-renewal the mandate;
- The revocation of the mandatary by the partners on the ground of fault.
That doesn't give not entitled to a specific compensation. In the event of a combination of the social mandate with an employment contract, the termination of one does not necessarily lead to the termination of the other. A former corporate officer can thus continue to perform his duties as an employee at the end of his term of office.
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3. The combination of the social mandate and the employment contract
The characteristics of the employment contract
The social mandate can be combined with an employment contract under certain conditions:
- One separate distribution of functions of each role, leading to the revocability of the mandate;
- One real employment with technical functions distinct from those falling within the social mandate;
- One remuneration linked to this employment contract, separate from that of the mandate;
- A genuine relationship of subordination with respect to the employer company.
For the mandatary, the combination of a social mandate and an employment contract is in the interest of being able to benefit from the rules of the Labor Code and the social protection for employees (unemployment insurance, France Travail, sickness, accident).
By definition, accumulation is impossible for any SA director or for the sole majority manager of an SARL. In addition, some regulated professions pose incompatibilities, prohibiting the holding of mandates in several companies. The non-compliance with cumulation rules may affect the employment contract of nullity, or lead to a suspension during the exercise of the mandate, or even involve his severance.
The remuneration of the corporate officer
The social mandate contract should not be confused with an employment contract. The corporate officer may receive remuneration under his corporate mandate, but it must be reasonable, justified by the functions performed and in accordance with fiscal and social standards. The remuneration of the mandatary may be fixed by the statutes. It can also be decided later by general meeting ; it is then mentioned in the AG minutes, in order to guarantee transparency and respect for the principle of good governance.
The remuneration of a corporate officer often consists of a fixed part, depending on the size of the company and the qualifications of the manager, and a variable part, linked to the performance of the company. It can also include benefits in kind, such as a company vehicle.
The company status of the mandatary differs depending on whether it is associated or not. When the mandatary combined owns the majority of the shares in the company, he is considered a self-employed person (TNS). As such, it is affiliated to the Social Regime for Self-Employed Persons (RSI). But when he does not have a share or is a minority managing partner, he is treated as an employee and affiliated to the general Social Security regime. In this case, his remuneration is formalized in a pay slip and the company makes monthly social declarations in the same way as the other employees.
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4. The mission of the corporate officer
The corporate officer embodies the decision-making power of the entity he represents. As such, he is vested with the broadest powers to act in all circumstances on her behalf:
- Perform all management acts necessary for the proper functioning of the structure;
- Take charge of the organization of the life of society, including the ordinary or extraordinary general meetings partners for making an important decision;
- Ensure the representation of the company towards third parties.
As part of their mission, corporate officers are required to respect for the corporate purpose and social interest. Good management requires finding the right compromise between the interests of the partners and those of the stakeholders.
The function of corporate officer involves rigorous management to control costs and improve the financial performance of the company. This includes good organization, the choice of good investments and the innovation and motivation of staff.
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5. The responsibility of the corporate officer
The responsibility of the corporate officer in relation to the company
The corporate officer of a company is responsible for its actions and for the decisions taken with respect to the company. Sa Responsibility is committed to all partners in the hypothesis of:
- Violation of legal texts;
- Violation of statutory provisions;
- Management error or poor management.
He must be held accountable for his actions, especially if he causes harm to society. Partners thus have the opportunity to revoke the social mandate. Likewise, he may be subject to proceedings that initiate his professional liability.
The liability of the corporate officer vis-à-vis third parties
The corporate officer Engage her liability to third parties for all actions he takes in the exercise of his duties.
His personal liability may thus be incurred, both civil and criminal, if he commits a serious and intentional fault (detachable from his duties) and his actions are prejudicial. He can thus be called at fulfilment of the company's liabilities if it appears during a reorganization or judicial liquidation procedure that a fault has caused a shortage of assets.
The status of director does not offer the corporate officer no special protection. It is therefore preferable to subscribe to a civil liability insurance as a company manager.
To find out more about the corporate officer, contact Axiocap, a subsidiary of Infograft!
