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

Company Law (en cours)

In accordance with Article 1872-2 of the Civil Code, the division of assets cannot be requested by a partner as long as the company is not dissolved. This division, or liquidation, constitutes the main purpose of recognizing a de facto company, whose existence becomes apparent to the partners only at the time of the dissolution of the marital bond or the withdrawal of a partner.
The partner reques …

Liquidation of the company

In accordance with Article 1872-2 of the Civil Code, the division of assets cannot be requested by a partner as long as the company is not dissolved. This division, or liquidation, constitutes the main purpose of recognizing a de facto company, whose existence becomes apparent to the partners only at the time of the dissolution of the marital bond or the withdrawal of a partner.

The partner requesting the distribution is not bound by any deadline from the date of dissolution . However, the one who had exclusive enjoyment of the undivided assets between the date of the dissolution of the company and the date of distribution is required to pay a balance corresponding to half of the profits generated by the assets to be distributed between these two dates . Similarly, the work performed by a partner of the de facto company created after dissolution is subject to remuneration as it can no longer be considered a contribution in the form of services .

When the partners are married, choosing the regime of separation of property does not prevent the existence of a de facto company, which must be liquidated as such . The percentage of contributions made to the company by each spouse must be applied to the liquidation surplus constituted by the acquisitions and improvements of assets made during the marriage .

When they are cohabiting partners, the question frequently arises regarding the valuation of contributions in the form of services consisting of work performed on a building. According to the Court of Cassation, during liquidation, there is neither recovery nor reimbursement of contributions in the form of services from a cohabiting partner: these can only entitle them to a share of the capital gain . Furthermore, a cohabiting partner cannot request, within the framework of the liquidation of an alleged de facto company, half of the expenses she claims to have incurred to cover the couple's expenses, as the recognition of such a company can only lead to the distribution among the partners of the liquidation surplus in proportion to their respective contributions .

Finally, in relations between entrepreneurs, the judge may, in order to quantify the amount owed to a partner for the liquidation of the interests of former partners, refer to the operating results of the de facto company .

Cass. com., 16 June 1998, LawLex202300009313JBJ, granting a request for partition submitted seven years after the dissolution of the de facto company.

Cass. 1re civ., 20 March 2001, LawLex202300009311JBJ.

CA Versailles, 21 September 2021, LawLex202300010059JBJ.

Cass. 1re civ., 21 October 1997, LawLex202300009315JBJ.

Cass. com., 27 February 1996, LawLex202300010441JBJ.

Cass. 1re civ., 19 April 2005, LawLex202200006422JBJ. - Also see CA Versailles, 21 September 2021, LawLex202300010059JBJ. - Cf., when the contribution in the form of services did not involve the improvement of the building, Cass. com., 24 September 2013, LawLex202300009718JBJ.

CA Rouen, 8 February 2017, LawLex202300010811JBJ.

Cass. com., 10 July 2007, LawLex202300010071JBJ.

Company Law (en cours)

624. Liquidation of the company

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

624. Liquidation of the company

Demandez un accès gratuit au contenu exclusif Livv – juristes d’entreprise

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

Demandez un accès gratuit
au contenu exclusif Livv – juristes d’entreprise