Consent (approval) clause

A consent (or approval) clause (clause d'agrément) is a statutory or contractual provision requiring that a transfer of shares receive prior approval from a corporate body — board of directors, shareholders' meeting or specific shareholders — before it can take effect. It exists in closely held companies and certain SAs to protect the stability of the shareholder base and prevent unwanted new shareholders. In M&A, the approval procedure must be scrupulously followed under penalty of nullity: the acquirer must confirm that the company has formally granted or is deemed to have granted its approval before completing the share transfer at closing.

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Example: in the acquisition of 60% of a French SARL, the buyer notifies the intended transfer to the remaining partners under the statutory approval procedure. Partners have a 3-month period to exercise their pre-emption right or designate a substitute buyer at the same price. Absent a response within this period, approval is deemed granted and the transfer proceeds to closing.

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Hectelion verifies the regularity of approval clause procedures in share transfer transactions, in coordination with legal counsel for all parties.