Towards a Modernization of the Nullity Regime in Company Law (Ordinance No. 2025-229 of March 12, 2025)

Following the implementation of the law of June 13, 2024, aimed at strengthening business financing and enhancing France’s economic attractiveness, this reform seeks to secure corporate transactions and limit abusive nullity claims, which until now could undermine the legal stability of companies and their business relationships.

Long criticized for its lack of clarity and sometimes destabilizing effects, the nullity regime applicable to commercial companies, their contributions, and corporate decisions has thus been redesigned around several key principles.

Main contributions of the ordinance of March 12, 2025:

• Elimination of the retroactive effect of certain nullities: To avoid challenging sometimes longstanding corporate acts and destabilizing contractual relationships, the ordinance removes the retroactive effect of nullity for certain acts and corporate decisions, thereby preserving regularly established situations.
• Reduction of the limitation period: The time limit to bring a nullity action is now set at two years from the discovery of the nullity cause, compared to five years previously. This measure aims to promote company stability and discourage late actions often driven by opportunistic interests.
• Restriction of grounds for nullity: Only the most serious irregularities will now justify annulment. This concerns cases of fraud or violation of a mandatory provision of the Commercial Code related to the validity of the act. Nullities based solely on form or minor causes are excluded.
• Limitation of persons entitled to act: To prevent dilatory or vexatious actions, the ordinance strictly defines who has standing to request the nullity of an act or corporate decision, restricting such actions to truly concerned and legitimate parties.

This reform will come into effect on October 1, 2025. It marks a significant turning point for French company law, as it promotes legal certainty in corporate operations, protects relationships among shareholders, and strengthens the reliability of company life.

Ordinance No. 2025-229 of March 12, 2025 Reforming the Nullity Regime in Company Law – Légifrance