Bankruptcy Law

The law of 26 July 2005  made persons exercising an independent professional activity or a liberal profession eligible for insolvency proceedings. According to Article L. 620-2 of the Commercial Code, "[t]he safeguard procedure is applicable to any person exercising [...] an independent professional activity, including a liberal profession subject to a legislative or regulatory status or whose tit …

Exercise of an independent and liberal professional activity

The law of 26 July 2005  made persons exercising an independent professional activity or a liberal profession eligible for insolvency proceedings. According to Article L. 620-2 of the Commercial Code, "[t]he safeguard procedure is applicable to any person exercising [...] an independent professional activity, including a liberal profession subject to a legislative or regulatory status or whose title is protected. This category covers all entrepreneurs who carry on an activity other than commercial, craft or agricultural, such as lawyers , doctors, architects, self-employed entrepreneurs , massage therapists , nurses...

The law is not concerned with the status of an independent professional but with the characterization of the exercise of an independent professional activity . The registration of the natural person in the register of commercial agents  or the non-registration in the roll of a professional order  does not prevent the submission of the natural person who exercises an independent professional activity or a liberal profession to the regime of insolvency procedures. Similarly, the mere registration of a natural person in the register of companies and their establishments kept by the National Institute of Statistics and Economic Studies (INSEE) does not allow one to deduce that he or she is actually engaged in an independent professional activity, which could justify the opening of insolvency proceedings against him or her .

Since 1 January 2006 , the date of entry into force of the law of 26 July 2005, insolvency proceedings may be initiated against a natural person who carries on an independent professional activity or a liberal profession, provided that he or she continues to exercise his or her profession , and that he or she proves insurmountable difficulties on the date on which the court makes the decision, even though his or her liabilities were due before 1 January 2006 . Moreover, when the natural person no longer exercises an independent professional activity, he or she may nevertheless benefit from the regime of insolvency proceedings, if the debts at issue arose in the course of the professional activity exercised in his or her own name .

Persons who are practicing an independent professional activity or a liberal profession on the day the court rules may not be the subject of overindebtedness proceedings , regardless of the origin of the debts invoked , including those contracted prior to the independent professional activity or the liberal activity .

Finally, since independence is a necessary condition for the benefit of insolvency proceedings, managers  and partners  are excluded. Nevertheless, insolvency proceedings may be initiated against a person who carries on an independent professional activity or a liberal profession, even if he has formed a company to carry on that activity, provided that he has never been registered with the RCS (Registre du Commerce et des Sociétés) and that he cannot therefore be considered to have ceased to carry on that activity as an individual .

Law No 2005-845 of 26 July 2005 on the safeguarding of companies, OJ 27 July 2005.

See in particular Cass. com., 17 June 2020, LawLex202100003620JBJ (RJ).

See in particular. Cass. com. 27 May 2008, LawLex202100003655JBJ.

CA Douai, 23 March 2017, LawLex202100006041JBJ.

Cass. com., 30 September 2008, LawLex202100005839JBJ holding that a massage therapists exercises a liberal profession and cannot, as such, be the subject of a procedure of over-indebtedness of individuals.

Cass. 2e civ., 18 February 2016, LawLex202100005707JBJ considering that a self-employed business consultant who carries out an independent professional activity falls under the insolvency proceedings and not under the procedure for overindebtedness of individuals, regardless of the origin of the debts invoked. See not. Cass. com, 17 June 2020, LawLex202100003620JBJ opening the benefit of an insolvency procedure to a lawyer on the basis of a claim unrelated to his professional activity.

CA Rouen, 21 October 2016, LawLex202100005822JBJ (LJ).

Cass. com., 15 November 2016, LawLex202100005711JBJ (RJ).

See in particular Cass. 2e civ., 1 June 2017, LawLex202100006062JBJ holding that an orthodontist who does not practice in his own name but as a partner of a professional civil partnership does not fall under the scope of insolvency proceedings; Cass. com., 9 February 2010, LawLex202100006211JBJ excluding from the benefit of insolvency proceedings a lawyer who practices as a partner of a liberal practice partnership.

Cass. com., 17 June 2020, LawLex202100003620JBJ (RJ).

See in particular CA Limoges, 7 July 2021, (LawLex not found in English).

See in particular Cass. com., 30 September 2008, LawLex202100005839JBJ (RJ).

CA Aix-en-Provence, 23 February 2017, LawLex202100006063JBJ holding that the mere designation of a person as an “industrialist” in a provisional sale agreement is not sufficient to bring him under the regime of insolvency proceedings in the absence of characterization of an independent professional or personal commercial activity.

Cass. 2e civ., 23 June 2016, LawLex201600001271JBJ.

CA Grenoble, 28 March 2013, LawLex202100006042JBJ (RJ).

Cass. com., 3 April 2019, LawLex202100003657JBJ (RJ).

Law of 26 July 2005, Art. 190: “This law comes into force on 1 January 2006”.

CA Limoges, 7 July 2021, LawLex202100005830JBJ considering that only practicing auto-entrepreneurs can be subject to an insolvency procedure.

Bankruptcy Law

40. Exercise of an independent and liberal professional activity

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Les notions juridiques connexes

40. Exercise of an independent and liberal professional activity

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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