The powers of the manager of the SARL (Partners and Third Parties)
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The manager may perform any management act in the interest of the company. Management acts are understood in a broad sense, encompassing both administrative acts and acts of disposal of company assets, provided these are related to the activities of the limited liability company (SARL).
As such, the manager may, on behalf of the company and in accordance with its corporate purpose, sign contracts, hire staff, initiate legal proceedings, etc.
Exceptions
The manager's powers may, however, be limited by:
the articles of association: certain clauses in the articles of association may make the execution of certain acts subject to prior authorization by the shareholders (for example, for transactions that bind the company beyond a certain amount);
the powers conferred by law on the shareholders: the company's legal representative may not perform any act that falls under the exclusive jurisdiction of the shareholders (examples: conversion of the SARL into another type of company, sale of the business assets resulting in the cessation of the company's activity, amendment of the articles of association, etc.).
Under penalty of nullity of the contract, the manager or the partners are prohibited from:
contracting loans from the company in any form whatsoever;
obtaining an overdraft on their current account from the company;
having their obligations to third parties guaranteed or endorsed by the company (see the fact sheet "The Regime of Agreements Concluded in Limited Liability Companies").
A manager who exceeds their powers will incur personal liability towards the partners, who may obtain compensation for damages or dismiss them for just cause.
With regard to third parties:
The manager has the broadest powers to act in all circumstances on behalf of the company, subject to the powers expressly granted to the partners by law.
Therefore, the limited liability company (SARL) is bound even by the manager's actions that fall outside its corporate purpose, unless it proves that the third party was aware that the action exceeded this purpose or could not have been unaware of it given the circumstances. Publication of the articles of association is not sufficient to constitute such proof.
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