All of French Company Law: ordinary law of companies and specific regime for different types of companies

Company Law (en cours)

Article L. 236-4 of the Commercial Code provides that in cases of a merger with the creation of a new company, the effective date of the operation is the date of registration of the new company or the last of them in the trade and companies register. In the case of a merger by absorption, the operation generally takes effect on the day of the last meeting approving it , even if the publication occurs later . It is also at this moment that the disappearance of the absorbed company becomes effective .

The parties to the transaction may, however, defer the effective date by inserting a retroactive clause in the merger agreement  which aims to transpose the effects of the merger to a date prior to its approval. Article L. 236-4 expressly offers such an option to the parties by stating that they may stipulate that the transaction takes effect on a date other than that of its actual completion, which must be neither later than the closing date of the current fiscal year of the beneficiary company or companies nor earlier than the closing date of the last completed fiscal year of the company or companies transferring their assets. The interests of the maneuver may be fiscal or organizational. Retroactivity applies only between the parties. In fact, a third party, such as a guarantor, cannot rely on the effective date provided by a retroactive clause agreed upon by the parties to the merger to argue that it was not engaged with respect to the absorbing company and to escape its coverage obligation, as long as the debt was due before the restructuring .

Cass. com., 7 July 2021, LawLex202200009709JBJ; Cass. 2e civ., 27 June 2019, LawLex202200009510JBJ. - Also see CA Montpellier, 26 January 2023, LawLex202300007587JBJ.

Cass. 2e civ., 8 July 2004, LawLex202200009433JBJ, declaring admissible the brief filed by the absorbing company after the transfer of the absorbed company's assets, even though the merger was published subsequently; Cass. com., 8 Nov. 2023, LawLex202300014261JBJ, RJDA 2024, No 103.

Cass. crim., 25 October 2016, LawLex202200001481JBJ, French Company Law 2017, No 34, note SALOMON; JCP E 2017, No 1087, No 1, note DEBOISSY and WICKER, considering that the date to be taken into account for the disappearance of a company following a merger by absorption, in terms of its criminal liability, is not the date of its deregistration from the RCS but that of the general meeting approving the operation.

Cass. 3e civ., 17 May 2006, LawLex202200009714JBJ, holding that the loss of legal personality of a company following a merger by absorption without the creation of a new company takes effect on the date provided by the retroactive clause approved by the associate, and not on the date of its deregistration from the RCS.

Cass. com., 23 March 1999, LawLex202200009511JBJ. - See also Cass. com., 29 January 2002, LawLex202200009512JBJ, considering that the guarantor cannot rely on the lack of legal standing of the absorbing company by invoking the clause by which the parties to the merger conferred retroactive effect to the operation, since it only becomes final on the date of the general meeting that approves the merger plan.

Effective date and retroactive clause

STORCK, The retroactivity of corporate decisions, Rev. soc. 1985, 55, 13; SCHILLER, The retroactivity of mergers, JCP E 2013, 1513.

226. Effective date and retroactive clause