Bankruptcy Law

Law No 88-1202 of 30 December 1988 opened the benefit of the insolvency proceedings regime to farmers . From then on, according to Article L. 351-8 of the Rural and Maritime Fisheries Code “[t]he provisions of Book VI of the Commercial Code relating to safeguard procedures [...] are applicable to any person carrying on agricultural activities within the meaning of Article L. 311-1.” Since the law  …

Exercise of an agricultural activity

Law No 88-1202 of 30 December 1988 opened the benefit of the insolvency proceedings regime to farmers . From then on, according to Article L. 351-8 of the Rural and Maritime Fisheries Code “[t]he provisions of Book VI of the Commercial Code relating to safeguard procedures [...] are applicable to any person carrying on agricultural activities within the meaning of Article L. 311-1.” Since the law of 22 May 2019, known as the PACTE law , and as in commercial and artisanal matters, Article L. 620-2 of the Commercial Code no longer refers solely to the status of farmer but to the exercise of an agricultural activity, which makes it possible to subject not only individual farmers but also agricultural companies to insolvency proceedings.

Article L. 311-1 of the Rural Code considers agricultural “all activities corresponding to the control and exploitation of a biological cycle of a plant or animal nature and constituting one or more stages necessary for the development of this cycle ” . The text identifies other agricultural activities such as agricultural activities by extension which are an extension of the act of production or which have as their support the farm. It also refers to the activities of preparation and training of domestic horses with a view to their exploitation, excluding show activities .

In addition, certain purchases for resale, which could be classified as commercial acts on the basis of Article L. 110-1, 1° of the Commercial Code, characterize an agricultural activity as long as they are part of a biological cycle of plant or animal nature.

The Court of Cassation requires that the agricultural activity be carried on in a regular manner . Difficulties may arise when the agricultural activity is carried on in a company. Can a natural person be the subject of insolvency proceedings as an individual? According to case law, the notion of farmer applicable to a professional individual, which justifies his submission to the regime of insolvency procedures, is defined not with regard to the capacity of manager or employee of a farming company but with regard to the agricultural nature of the activity that he carries out personally and as his usual profession . Indeed, only the individual exercise by a manager of an agricultural activity distinct from the operation of the company of which he is the representative justifies the opening of insolvency proceedings in his personal capacity . The managing partner of a limited liability agricultural enterprise (Entreprise Agricole à Responsabilité Limitée (EARL)) affiliated with the agricultural social security system (Mutualité Sociale Agricole (MSA)) is deemed to participate in a personal capacity in agricultural work through his legal and financial management work and may be subject to insolvency proceedings .

In practice, affiliation to the MSA does not affect the identification of the exercise of an agricultural activity: the collaborating spouse, even if not affiliated to the MSA, exercises an agricultural activity when his or her participation is not occasional and exceeds the normal and usual assistance between spouses .  On the other hand, a person affiliated with the MSA was not considered to be a farmer in the absence of proof that he or she personally carried out agricultural activities as a regular occupation .

Finally, a debtor who claims to be a farmer in order to benefit from an insolvency procedure is inadmissible to contest this status at a later date .

Law No 88-1202 of 30 December 1988 on the adaptation of agricultural operations to their economic and social environment, OJ 31 December 1988. See in particular CA Pau, 9 May 2016, LawLex202100006068JBJ (LJ).

Law No 2019-486 of 22 May 2019, relating to the growth and transformation of companies, known as the PACTE law, OJ of 23 May 2019.

Cass. com., 18 May 2017, LawLex202100005821JBJ (LJ).

CA Montpellier, 2 April 2014, LawLex202100006047JBJ holding that the debtor registered in the company and trade register and not in the farmer's register, cannot contest the absence of prior designation of a conciliator because of his quality of farmer when he is summoned in court-supervised liquidation since he recognizes himself as a service provider and not as a farmer and that his activity of service to the crops does not correspond to that of control and exploitation of a biological cycle of plant or animal character.

CA Grenoble, 27 September 2012, LawLex202100003631JBJ considering that even if registered in the company and trade register, the operator of an equestrian center within which riding lessons and rides are offered as well as the taking of horses for boarding constitutes an agricultural activity, likely to benefit from the provisions of receivership, subject to the appointment of a conciliator.

See in particular Cass. com, 17 March 1998, LawLex202100006186JBJ. See also Cass. com, 5 April 1994, LawLex202100006188JBJ.

CA Chambéry, 3 September 2019, LawLex202100006058JBJ (LJ).

Cass. com., 3 October 2018, LawLex202100003654JBJ (RJ).

Cass. com., 4 November 2014, LawLex202100003622JBJ (LJ).

CA Agen, 1st December 2014, LawLex202100003632JBJ (RJ).

Cass. com., 3 October 2000, LawLex202100006189JBJ (RJ).

Bankruptcy Law

39. Exercise of an agricultural activity

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

Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

39. Exercise of an agricultural activity

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