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

Company Law (en cours)

Professional partnership companies (SCP) were established by Law No 66-879 of 29 November 1966 to allow individuals belonging to a regulated liberal profession to practice their activity jointly. Since 1 September 2024, SCPs are exclusively governed by Articles 5 to 33 of Ordinance No 2023-77 of 8 February 2023 , which repealed the 1966 law.

The ordinance, which essentially reiterates the provisions of the 1966 law, concerns only members of liberal professions subject to a legislative or regulatory status or whose title is protected. However, the professional partnership (Société civile professionnelle) is not the only legal form for group practice of liberal professions, which may, under certain conditions, use companies in commercial form, ordinary law civil companies, professional partnership companies, or joint ventures.

The ordinance confirms the possibility of establishing professional civil companies (SCP) for the practice of a regulated profession by specifying that a decree may authorize, under conditions it determines, individuals practicing a regulated liberal profession to form professional civil companies with individuals practicing other liberal professions, for the joint practice of their respective professions. To this end, five decrees have been adopted to organize the conditions for practicing regulated legal professions in a company. These decrees concern, respectively, the practice in a company of the profession of lawyer , notary , judicial officer , clerk of the commercial court , and lawyer at the Council of State and the Court of Cassation .

The registration of the company can only occur after its approval by the competent authority or its listing on the register or the professional order's roll. Furthermore, the company's name must be immediately preceded or followed by the mention: professional civil company or the initials "SCP," themselves followed by the indication of the profession practiced. Within SCPs, contributions in the form of services are essential, as each partner joins the company to practice their profession . In fact, the purpose of these companies merges with the activity of their members. The SCP receives the fees paid as remuneration for the professional activity of the partners, in return for which they are entitled to profit sharing.

A decree specific to each profession and, failing that, the statutes, may provide for a profit-sharing arrangement that is not proportional to capital contributions . A distribution of profits contrary to the statutory provisions is possible when it clearly results from a mutual agreement between the partners , or is inferred from consistent behavior throughout the company's existence and ratified by the acts of dissolution and liquidation of the company , even if the Court of Cassation has sometimes required unanimous intent expressed in a document .

The ordinance maintains the option of withdrawal offered to the partner , either by transferring their shares to a third party or by requesting the company to buy them back. The withdrawing partner of an SCP is entitled to the value of their shares and may claim all the proprietary rights they hold in the company on the day of their withdrawal, including their share of the value of the right to present clients . According to the Court of Cassation, the option between a request for reimbursement and transfer to a third party cannot be denied to the withdrawing partner due to a limitation resulting from regulatory texts that make withdrawal conditional on presenting a third-party transferee subject to an approval procedure . The attorney, who loses their status as a partner in an SCP and the rights attached to it from the publication of the ministerial order that records their withdrawal, including the ability to participate in general meetings , retains a right, as long as their social rights are not reimbursed, to their share in the distributable profits . Furthermore, disagreement among partners allows the withdrawing partner to request their appointment to an office created for this purpose at the same location under conditions provided by the specific decree for each profession, after a period of five years from their appointment as a public or ministerial officer associated with this company. When such a request is made, the finding of disagreement among the partners of the SCP cannot be made without the presence of the president of the departmental chamber at the proceedings . When they remain a member of the profession, they may reestablish themselves, either individually or by joining another SCP, even before the reimbursement of their social rights, when the company has accepted the principle of their withdrawal and the time allotted to the company to proceed with the transfer or buyback of their shares has expired, in the absence of a serious proposal from them . However, the statutes may impose on the withdrawing partner a non-reestablishment obligation, which takes effect on the day of their actual departure and not from the date set by the partners for the implementation of the withdrawal.

The dissolution or extension of the company is decided by the partners acting by the majority determined by the specific decree for the profession . The consolidation of all shares in a single hand does not automatically result in the dissolution of the company. Any interested party may request this dissolution if the situation has not been rectified within a period of two years . The court may grant the company a maximum period of three years to rectify the situation. It cannot pronounce the dissolution if, on the day it rules on the merits, this rectification has taken place.

When the company formed between partners practicing different professions no longer includes at least one partner practicing each of the considered professions, the partners may, within one year, regularize the situation or decide to modify the corporate purpose. Failing this, the company is dissolved.

In the event of the dissolution of a professional civil company holding a public or ministerial office, the partners may request their appointment to offices created for this purpose, at the same location, under the conditions provided by the specific decree for each profession. However, the partner who contributed a right of presentation to the company cannot benefit from this option when this right is exercised in their favor.

Finally, in case of disagreement, the partners may, in accordance with Article 1844-7, 5°, of the Civil Code, petition the court for early dissolution on just grounds. According to the Court of Cassation, since any dispute between lawyers in the course of their professional practice is, in the absence of conciliation, subject to arbitration by the bâtonnier, who exercises judicial authority, the latter is competent to rule on the request for dissolution of the SCI that two colleagues have established .

Ord. No 2023-77 of 8 February 2023 on the practice of regulated liberal professions in company form, JORF 0034 of 9 February 2023.

D. 2024-872 of 14 August 2024 regarding the practice of the legal profession in company form, JORF 0195 of 17 August 2024.

Cass. 1re civ., 21 March 2000, LawLex202300003471JBJ.

Ord. No 2023-77 of 8 February 2023, Art. 22. - Add, on this question: CATHELINEAU, Withdrawal in professional civil companies, JCP N 2001, 1790.

Cass. 1re civ., 18 June 1996, LawLex202300001451JBJ.

Cass. 1re civ., 16 February 2022, LawLex202300000655JBJ, BJS 2022, 29, obs. BARBIERI; Dr. sociétés 2022, 51, obs. JULLIAN; Gaz. Pal. 21 June 2022, 21, obs. ROUSSILLEM. - Similarly, Grenoble, 19 June 2024, LawLex202400004669JBJ, considering that the transfer of shares of a partner withdrawing from a professional civil company occurs independently of the acknowledgment or even the refusal of this withdrawal by the Minister of Justice.

Cass. 1re civ., 17 December 2009, LawLex202200006064JBJ.

Cass. 1re civ., 9 June 2011, LawLex202300002223JBJ; 17 December 2009, LawLex202200006064JBJ; 1 July 1997, LawLex202300009766JBJ.

Cass. 1re civ., 16 February 2022, LawLex202300000655JBJ, previously cited.

Cass. 1re civ., 12 June 2012, LawLex202300001438JBJ.

Ord. No 2023-77 of 8 February 2023, Art. 22. - Decree No 2024-872 of 14 August 2024 relating to the practice of the legal profession in company form provides, for example, in its Article 74 that early dissolution requires a three-quarters majority of the partners' votes.

This period, which deviates from ordinary law, is one of the innovations introduced by the Ordinance of 2023.

D. 2024-873 of 14 August 2024 relating to the practice of the notary profession in a company, JORF 0195 of 17 August 2024.

Cass. 1re civ., 6 December 2023, LawLex202300014303JBJ.

D. 2024-874 of 14 August 2024 concerning the practice of the profession of judicial commissioner in a company, JORF 0195 of 17 August 2024.

D. 2024-875 of 14 August 2024 concerning the practice of the profession of registrar of the commercial court in a company, JORF 0195 of 17 August 2024.

Decree No 2024-876 of 14 August 2024 concerning the practice in company form of the profession of lawyer at the Council of State and the Court of Cassation, JORF 0195 of 17 August 2024.

On this question, See BARDOUL, Contributions in the form of services in professional civil companies, Rev. sociétés 1973, 413; BARDOUL, Contributions in clientele and in services, in Group practice of liberal professions, Litec, 1974, 27; DAIGRE, The associate in services is a potential capital associate, Bull. Joly 1998, 1131; ENGEL, Does the contributor in services in a SCP have the right to compensation in case of withdrawal?, JCP E 1999, 1376; GUYON, Contributions in the form of services in professional civil companies, Defrénois 1999, Art. 36918, 3; NURIT-PONTIER, Rethinking contributions in services, LPA 3 July 2002, 4; HOVASSE, Shares in services in professional civil companies, in Mélanges Foyer, Economica 2008, 551.

On this question, See LAMBOLEY, Distribution of profits, in The practice of liberal professions in groups, Litec, 1974, 33. - For an illustration, See Art. 54 D. 2024-872 of 14 August 2024 relating to the practice of the legal profession in a company, providing that the participation of the partner provisionally suspended in the profits is reduced by half during the period of suspension, the other half being allocated in equal shares to the administrators, whether partners or not, or, if no administrator is appointed, to those partners who have not been subject to a provisional suspension of their duties.

Cass. 1re civ., 22 November 1994, LawLex202300010792JBJ.

Cass. 1re civ., 2 March 2004, LawLex202300010280JBJ.

Joint practice of the same regulated liberal profession

TERRE, Professional civil companies, JCP G 1967, I, 2103; BEHIN, Notarial professional companies, in Theory and practice of civil companies, Litec 1970, 501; CHARDENON and de MOURZITCH, Professional civil companies of lawyers, JCP G 1972, I, 2499; GIVORD, Professional civil company of lawyers, in Group practice of liberal professions, Litec, 1974, 99; LAMBOLEY, The professional civil company. A new status for the liberal profession, Litec, coll. 1974; LYON-CAEN, Practice in company of liberal professions in French law, Dalloz, 1975; DAIGRE, Joint-stock companies of regulated liberal professions and the reform of professional civil companies, Bull. Joly 1991, 369 and Modifications made by the law of 31 December 1990 to law No 66-879 of 29 November 1966 relating to professional civil companies, Rev. bailiffs 1991, 813; GIVORD, Practice in company of regulated liberal professions. Commentary on law No 90-1258 of 31 December 1990, ALD 1991, 75; JEANTIN, The influence of the law of 31 December 1990 on the status of professional civil companies, JCP G 1991, I, 3520; LASCOMBE, Practice in company of liberal professions and professional orders, Dr. companies 1997, chron. 7; LAMBOLEY, The particularism of company law in the context of group practice of liberal professions, in Mélanges Cabrillac, Dalloz-Litec 1999, 597; MAURY, Practice, in the form of a company, of a regulated liberal profession, PUAM, 2000; BOUCLIER, Group practice of legal professions, Litec, 2001; CAUSSAIN, The choice of a structure for the practice in company of the legal profession, JCP E 2001, 1080; BRAJOU, BEDARIDE, SIROT, Practice structures of the notarial profession. Necessary evolution or inevitability?, JCP N 2008, No 1310; LABARTHE, Organization of professional groups, LGDJ, 2024.

682. Joint practice of the same regulated liberal profession