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

Company Law (en cours)

The joint venture ends with its dissolution, which may result from most of the common causes provided for in Article 1844-7 of the Civil Code. Often established for a specific project, it may thus end upon the expiration of the time for which it was constituted , unless an extension is made in accordance with Article 1844-6, which requires the unanimity of the partners. This unanimity is all the m …

End of the company

DERRUPPÉ, The division of the joint venture, French Company Law June 1988.

The joint venture ends with its dissolution, which may result from most of the common causes provided for in Article 1844-7 of the Civil Code. Often established for a specific project, it may thus end upon the expiration of the time for which it was constituted , unless an extension is made in accordance with Article 1844-6, which requires the unanimity of the partners. This unanimity is all the more necessary when the decision to extend the company is accompanied by the obligation for the partners to maintain the availability of their share for a new period, as it increases the commitments of the participants . Before the agreed duration expires, however, no participant can withdraw from a banking pool , nor obtain dissolution other than by mutual consent of the partners . The dissolution of the company may also result from the achievement or extinction of its purpose. This is the case, in particular, when the partners unanimously decide to sell all the plots they have contributed in enjoyment to the company, without any commitment from anyone to make new contributions, and when it has no other purpose than the exploitation of these lands . Article 1872-2 provides that when the joint venture is for an indefinite period, its dissolution may result at any time from a notification sent by one of them to all the partners, provided that this notification is made in good faith and not at an inopportune time. No contrary clause can prevent this unilateral request . Although the text does not specify it, the First Civil Chamber has held that this simplified regime does not apply to companies with a civil purpose, such as professional practice companies , while the Third Civil Chamber had admitted its application to a real estate civil company . When applicable, the requirements of Article 1872-2 are not met when the authors of the notification have formed a professional civil company that began with the clientele of the company even before this notification . Finally, the legal option to dissolve a joint venture at any time does not exclude the possibility for a partner to seek compensation for the abrupt departure of the other .

Since the company does not have any assets of its own, there is no real need for liquidation but rather for settlements between participants . Each partner is entitled, after settling the company's debts, to the reimbursement of their contribution when possible, as well as to a potential share of the company's assets . However, Article 1842-2 takes care to specify, regarding undivided property, that partition cannot be requested before the dissolution of the company. According to the Court of Cassation, these provisions apply to all joint ventures, even when they are for a fixed term . When the statutes have only provided for profit sharing in proportion to each person's share in the ownership interests, some partners cannot oppose another's request due to their inactivity for two years . In principle, when each partner resumes their personal contributions in kind, the added value resulting from the activity of the other partners, as well as the specific investments and equipment they have benefited from, must be taken into account . Therefore, a former partner is entitled, at the time of the dissolution of the joint venture, to a portion of the liquidation surplus for the improvement they made to the land repurchased by the other partner . However, the accounts between the parties can only be established based on the actual contributions made by the parties, not the initial forecasts of the parties . Moreover, the heirs of a partner in a joint venture cannot claim any rights to the new business operated by the surviving co-partner when the company was dissolved by the termination of the commercial lease of the initial business and the successor has a different name and pursues a different purpose . In relations between partners, the dissolution of a joint venture with a commercial purpose results in the application of the provisions applicable to general partnerships and consequently, the unlimited and joint liability of the partners towards one of them for a loan made for the benefit of the company . The conviction of a partner in their capacity as manager, for an operation within the purpose of the joint venture, gives rise, from that date, to a claim against their co-partner, regardless of the date of dissolution of the company . In contrast, in relations with third parties, particularly those acting for payment, the dissolution only takes effect after its publication .

For an illustration, See Cass. com., 23 October 2007, LawLex202300002053JBJ, noting the dissolution of a joint venture upon the expiration of its term, in the absence of any express or tacit extension of its duration.

Cass. com., 20 December 2017, LawLex202200003200JBJ.

This regime applies, in preference to that of agricultural cooperative companies, to an agricultural cooperative that has become, due to lack of registration, a joint venture, Cass. 1re civ., 6 January 2021, LawLex202400000008JBJ.

Cass. com., 29 November 1988, LawLex202300009877JBJ.

Cass. com., 1 October 1996, LawLex202300014735JBJ.

Cass. com., 14 April 2021, LawLex202300010028JBJ.

Cass. 1re civ., 23 May 1984, LawLex202300009882JBJ.

Cass. 3e civ., 10 March 2004, LawLex202400000022JBJ.

Cass. com., 12 July 1993, LawLex202400000016JBJ.

Cass. com., 22 February 2005, LawLex202400000018JBJ.

Cass. com., 3 May 1984, LawLex202300009876JBJ.

Cass. com., 8 July 2014, LawLex202100002433JBJ.

Paris, 6 June 1996, LawLex202400000021JBJ.

Cass. com., 13 March 2001, LawLex202300002020JBJ.

Paris, 11 February 2000, LawLex202300014922JBJ.

Cass. com., 8 November 2016, LawLex202200002951JBJ.

Cass. com., 15 February 1994, LawLex202400000020JBJ.

Cass. 1re civ., 27 November 2019, LawLex202300014736JBJ.

Cass. 3e civ., 4 May 2016, LawLex202300009818JBJ.

Company Law (en cours)

633. End of the company(1)

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