Holding company fees recharacterised as pay: lessons from the ruling of 4 June 2026

The fees a holding company invoices to the SAS it controls can be recharacterised as pay by URSSAF, the French social contribution collector, where they correspond to duties the director already performs as president. In a ruling published in its Bulletin, the Cour de cassation upholds this reassessment on terms that make URSSAF’s task much easier (Cass. 2e civ., 4 June 2026, no. 23-20.189, FS-B).

The arrangement is common in SME groups: the director holds the operating SAS through a holding company, serves as president without pay, and the holding company invoices “management services” or “management fees”.

The case

An SAS had entered into an agreement with a third-party company run by the same individual, under which that company supplied general, commercial and financial management services by making available to it... the SAS’s own president. After an inspection, URSSAF added the invoiced amounts to the SAS’s contribution base. The court of appeal upheld the reassessment and the Cour de cassation dismisses the appeal.

The test applied: duplication of the corporate office

The Court points out that presidents and directors of an SAS are compulsorily covered by the general social security scheme (article L. 311-3, 23°, of the Social Security Code) and that sums paid to them for their activity are subject to contributions under ordinary rules (article L. 242-1). It concludes that an agreement making the SAS’s own director available to perform management duties amounts to paying for the duties of president.

The reasoning rests neither on the agreement being void nor on it being sham. It is enough to find that the scope of the invoiced services overlaps the corporate office, that is the powers conferred on the president by article L. 227-6 of the Commercial Code. It does not matter, the Court adds, whether or not the director personally received the money: URSSAF does not have to trace the funds to them. The whole of the fees invoiced by the holding company therefore falls into the SAS’s contribution base.

No need to rely on abuse of rights

The company argued that by disregarding the agreement, URSSAF was necessarily relying on abuse of rights under article L. 243-7-2 of the Social Security Code, which would have required it to follow the specific procedure attached to that provision. The argument is rejected. Abuse of rights presupposes a sham act or an act that can have had no purpose other than avoiding contributions; it therefore requires intent. Where URSSAF simply restores the sums to their true nature, it is using its ordinary power of reassessment and need not prove any fraudulent intent. In return, the penalties specific to abuse of rights are not incurred.

A procedural argument disappears

The ruling also closes a procedural door. When hearing a challenge to a reassessment, as opposed to a dispute over affiliation, the court is not required to join the persons concerned or the other social protection bodies. The company may still do so and the court may order an investigative measure, but failing to join the director no longer allows the decision to be set aside.

Finally, the ruling holds that a letter of observations expressly referring to the disputed agreement meets the requirements of article R. 243-59, even if the agreement does not appear in the list of documents consulted.

A risk now on three fronts

The overlap between a services agreement and the corporate office is nothing new. In tax matters, the Conseil d’État has long refused the deduction of fees paying for duties the company already receives under the corporate office, on the ground of abnormal management. In company law, the commercial chamber allows an agreement that duplicates the director’s duties to be annulled (Cass. com., 14 September 2010, no. 09-16.084, decided at the time on lack of consideration, which would now be analysed as illusory consideration under article 1169 of the Civil Code), with repayment of the fees. The social security side completes the picture: the same agreement can now be challenged at once by the tax authorities, by URSSAF and by a minority shareholder.

What the ruling does not decide

The ruling does not condemn management fees as such. An agreement paying for real services, distinct from the corporate office and provided by an entity with its own resources, remains lawful and defensible. Nor does it decide the position of a holding company that is itself appointed president of the SAS: the facts concerned an individual director made available by a third-party company. The logic of the ruling nonetheless suggests not treating a holding company acting as president as an automatic shield where it lacks substance.

How to secure existing agreements

Attention must focus above all on the actual content of the services. Three questions help decide: which services are actually performed? By whom, with what resources and for what consideration? How do they differ from the president’s duties? Describing them in the contract is not enough to secure the arrangement.

The first requirement is to separate the scopes clearly. Whatever falls within the management of the SAS must be paid for under the corporate office, by a shareholders' decision, and subjected to contributions as such; only genuinely distinct technical or expert services can be covered by an agreement with the holding company. An agreement that uses the words “general management”, “commercial management” or “financial management” is, after this ruling, an exposed agreement.

The second requirement concerns the substance of the holding company providing the services. A company with no employees, no costs of its own and no client other than the subsidiary has exactly the profile that was penalised. Conversely, its own staff and equipment, several beneficiaries and invoicing based on identified services make the agreement far more defensible.

The third requirement is evidence. Reports, deliverables, time records and recharging consistent with the real cost of the services must be available in an inspection. The related-party agreements procedure (article L. 227-10 of the Commercial Code) must also be followed: it does not prevent a reassessment, but failing to follow it weakens the director’s position on other fronts.

Lastly, a company that has already undergone an URSSAF inspection covering the same agreement, with full knowledge and without any observation, may, subject to conditions, rely on tacit approval (article R. 243-59-7 of the Social Security Code). This point deserves to be checked case by case, before any inspection.

In practice

Does your agreement refer to “general, commercial and financial management”? It is time to check what those words really cover in your organisation. The firm assists directors and their advisers in reviewing and redesigning their management fee agreements, and in challenging reassessments.

This article sets out the law as it stood at the date of publication and does not constitute legal advice. Every situation calls for individual examination: let us take thirty minutes to check yours.