Article 1843-4 of the French Civil Code

When a shareholder leaves a company, whether by withdrawing, being excluded or having their shares bought back, the price of those shares is often contentious. Article 1843-4 of the French Civil Code offers a way out: the value is determined by an expert, chosen by mutual agreement or, failing that, appointed by the president of the court under the accelerated procedure on the merits, with no appeal. The expert’s decision binds the parties, save for gross error.

The provision applies in two sets of cases: where the law refers to it (withdrawal of a partner from a civil company, refusal of approval of a transferee, exclusion), and where the articles of association or an agreement provide for a transfer or buy-back without fixing the value. It concerns all companies, but SCI (sociétés civiles immobilières, French property-holding companies) and other property-rich companies use it frequently.

Where the rule comes from

Article 1843-4 of the French Civil Code, as worded since the ordinance of 31 July 2014, distinguishes two situations. Where the law refers to the article (I), the expert must apply, where they exist, the rules and methods for determining the value laid down in the articles of association or in any agreement binding the parties. Where a transfer or buy-back is provided for by the articles or an agreement (II), the value is determined by an expert appointed in the same way, who is equally bound by those rules.

In a decision of 7 May 2025 (appeal no. 23-24.041, reported), the Commercial Chamber held that, where the parties disagree on how to read the articles, the expert may give several valuations, one for each reading, without having to wait for the court to rule.

In a valuation report

The appointed expert begins with the terms of reference: he reproduces the valuation clause in the articles if there is one and states how he applies it. He then organises an adversarial exchange between the parties, collects their documents and observations, inspects the properties and establishes the restated net asset value, then any discounts if the articles do not exclude them. Where the parties disagree on the reading of a clause, he puts a figure on each reading. The report concludes with a price, which the parties may challenge only for gross error.

Example

A partner withdraws from an SCI whose articles provide that the shares are valued “on the basis of the market value of the properties less liabilities, without any allowance”. The expert values the building at €640,000 and the liabilities at €110,000; the net assets are €530,000. The partner holds 40 %: his shares are worth €212,000. Despite the minority holding and the absence of a market, no discount is applied, because the clause forbids it. Without that clause, the expert would have discussed an overall discount of 15 % to 20 %.

Not to be confused with

The third-party valuer under article 1592 of the French Civil Code, whose task is to fix the price of a sale, and the court-appointed expert under article 232 of the French Code of Civil Procedure, who informs the judge without binding him.