13 April 2026
A French property-holding company (SCI) can help organise ownership of a home and protect a surviving partner. However, a tontine clause requires careful review: if it covers every share, it can lead to the company being declared null.
A survivorship arrangement with retroactive effects
A tontine or accrual clause transfers the shares included in the arrangement to the last survivor. Its effect is retroactive: the survivor is treated as having owned those shares from the outset.
Why does covering every share create a problem?
In its judgment of 9 April 2026, the Court of Cassation recalled that a civil company must be formed by at least two people. When all shares are covered, the retroactive effect means the company is treated as having had only one member from its formation. The Court upheld nullity of the company, rather than merely disregarding the clause.
This differs from all shares coming into one person’s hands during the company’s lifetime: the difficulty here affects its original formation retroactively.
Review the articles before choosing a structure
One precaution is to keep some shares outside the tontine arrangement. This does not remove the need to assess the structure’s validity, inheritance and tax consequences, and suitability for the members’ objectives. The judgment applied the former rules on company nullity; its relevance must be assessed against the legislation governing the particular case.
Read the judgment of 9 April 2026, appeal no. 25-12.992.
Photo: Tania Melnyczuk — Unsplash.
Further reading : French Property-Rich Companies: New Formalities for Share Transfers.
The office does not contractually guarantee the accuracy or currency of this information. To assess how it applies to your circumstances, please consult one of the office’s notaries.
