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

Company Law (en cours)

In dealings with third parties, Article 1872-1, para. 1, of the Civil Code provides that each partner contracts in their own name and is solely liable to third parties. Thus, within the framework of a banking pool, which is legally analyzed as a joint venture, the personal ties between the participants in the pool and a debtor thereof remain, so that the "lead manager" who has been fully compensat …

Personal or joint liability

BLANC-JOUVAN, The disclosure to third parties of the joint venture, RTD com. 1959, 649; AUTESSERRE, Joint venture and de facto companies, Rev. sociétés 1963, 241; PETEL, The disclosure to third parties of the joint venture, JCP E 1987, I, 16369; PICAND-L'AMEZEC, The obligation of joint venture partners towards third parties, Rev. sociétés 1990, 567; GOYET, Does Article 1872-1 of the Civil Code apply to informal situations? (heterodox remarks around Cass. com., 26 Nov. 1996, Lautier), D. 1998, Chron., 37.

In dealings with third parties, Article 1872-1, para. 1, of the Civil Code provides that each partner contracts in their own name and is solely liable to third parties. Thus, within the framework of a banking pool, which is legally analyzed as a joint venture, the personal ties between the participants in the pool and a debtor thereof remain, so that the "lead manager" who has been fully compensated has no standing to act against the guarantor on behalf of another member of the pool .

It is different, according to paragraph 2 of the text, if the participants act as partners openly and to the knowledge of third parties: each of them is then liable to the latter for obligations arising from acts performed in this capacity by one of the others, with joint liability if the company is commercial, without joint liability in other cases. Acting "openly and to the knowledge of third parties" as a partner implies that the person who contracted presented themselves as a partner  or maintained the appearance of the continuation of the company, even if it has ceased to operate, with respect to third parties, notably by using the same letterhead on order forms, the same business stationery, and the same bank account title . A silent partner is also deemed to act as a partner openly and to the knowledge of third parties if the advertisements and promotional arrangements, objects of the transaction, repeatedly mention the silent partnership, if the bank account opened in the name of the company was used to pay suppliers, if this partner continued the construction programs, and if the disputed advertisements were ultimately made for their benefit . However, the clearly expressed intention of a person to guarantee the commitments of a silent partnership cannot be interpreted as indicating their intention to guarantee the debts of the partner representing them, who alone is liable to third parties . Moreover, the disclosure of the silent partnership to third parties only binds a partner to them if it results from a personal act on their part  and not from another participant . Furthermore, a partner cannot be bound by a contract signed by their manager even before the company's formation . Finally, the debtors of the silent partnership to whom it has been disclosed may oppose the partners or the assignees of their rights, who would claim payment of all or part of the common debt, the non-conformity of such claims with their partnership agreement, until the dissolution of the group .

Article 1872-1, para. 2, extends the obligation to the debt it provides for to the associate who, through their interference, led the co-contractor to believe they intended to commit themselves to them, and to the one for whom it is proven that the commitment benefited them.

Furthermore, pursuant to Article 1872, with respect to third parties, each partner remains the owner of the assets they make available to the company. This applies when a transfer deed specifies the identity of each partner and their undivided share in the overall acquisition authorized by the supervising judge: in such a case, the undivided ownership of the transferred real estate assets belongs to the partners of the joint venture and not to the joint venture itself .

CA Versailles, 6 June 1996, LawLex202300014737JBJ.

Cass. com., 13 January 1998, LawLex202300010025JBJ.

Cass. com., 9 May 1983, LawLex202300011619JBJ. - Also see Cass. com., 14 June 1994, LawLex202300010024JBJ.

Cass. com., 9 July 1996, LawLex202400000007JBJ.

Cass. com., 6 July 2010, LawLex202300010014JBJ.

Cass. com., 26 November 1996, LawLex202300011621JBJ; 15 July 1987, LawLex202300011620JBJ.

Paris, 11 February 2000, LawLex202300014922JBJ.

Cass. com., 13 November 2013, LawLex202300010015JBJ.

Cass. com., 20 November 2001, LawLex202400000015JBJ.

Cass. com., 27 May 2014, LawLex202300005343JBJ.

Company Law (en cours)

631. Personal or joint liability(1)

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631. Personal or joint liability(1)

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