Commercial Leases/Business Goodwill

The contribution of the leasehold right to a company must be assimilated to a transfer of the leasehold right , provided that the beneficiary of this contribution has a legal personality distinct from the lessee . It must therefore be notified to the lessor to be enforceable against them, in accordance with Article 1690 of the Civil Code , even if the required publications for the transfer of the business have been made in newspapers authorized to receive legal and judicial announcements . However, the Court of Cassation considers that in the case of a de facto company constituted by the lessee, which does not have legal personality, the contribution in ownership or enjoyment should not be considered a transfer, if not total, at least partial, of the leasehold rights, falling within the scope of application of Article 1690 .

On the other hand, insofar as it does not alter its legal personality, the transfer of shares in a company, whether partial or total, cannot be equated with either a lease transfer or a business transfer , except in cases of fraud for which the burden of proof lies with the landlord . Indeed, the transfer of shares may constitute a disguised transfer of the lease in fraud of the landlord's rights, which the trial court must investigate when the landlord alleges the existence of such fraud . In the absence of a sale of a business and in the absence of an authorized transfer of the lease right to a new entity, the mere circumstance that the lessee associates with another person does not terminate the commercial lease with respect to them .

Moreover, it follows from Articles 1844-3 of the Civil Code and L. 210-6, para. 1, of the Commercial Code that “the regular transformation of a company into a company of another form does not result in the creation of a new legal entity.” Thus, the straightforward transformation of a company into a company of another form, with the same corporate name, the same purpose, without liquidation of the former company and without the transfer of its assets and liabilities to the new company, which is the continuation of the former, does not constitute a violation of the lease clauses regulating the transfer and does not in any way entail the transfer of the lease granted to the transformed company .

The dissolution of a company does not automatically result in the termination of the leases of the buildings used for its business activities, pursuant to Article L. 237-5 of the Commercial Code, as the legal personality of the company continues for the purposes of liquidation until its closure (Article L. 237-2, para. 2, Commercial Code). Thus, in a commercial company constituting a separate legal entity, the assignment of the company's lease rights to one of the partners during liquidation constitutes a transfer of the lease . This is not the case when the lease rights have always belonged jointly to the de facto partners .

CA Toulouse, 11 March 2020, LawLex202300012794JBJ.

Cass. com., 18 March 1963, LawLex202300013034JBJ.

Cass. 3e civ., 22 February 1968, LawLex202300013316JBJ.

Cass. 3e civ., 24 March 1981, LawLex202300012792JBJ.

Cass. 3e civ., 2 February 1977, LawLex202200003201JBJ.

CA Toulouse, 11 March 2020, LawLex202300012794JBJ, préc.

Cass. 3e civ., 28 June 1989, LawLex202300010064JBJ.

Cass. com., 3 June 2014, LawLex201400000733JBJ.

CA Paris, 10 April 2013, LawLex202300013315JBJ.

Cass. 3e civ., 10 July 2002, LawLex202200009621JBJ.

CA Angers, 11 June 2024, LawLex202400004462JBJ.

Cass. com., 29 May 1961, LawLex202200009492JBJ. Cf. regarding an agricultural lease, Cass. 3e civ., 31 October 2012, LawLex202200009402JBJ.

293. From Contribution to a Company to Dissolution