Bankruptcy Law

Originally reserved for commercial legal persons by form or by object, the procedure of receivership was extended by the Law of 13 July 1967  to all legal persons of private law .
However, the grouping must have legal personality: undeclared associations, de facto companies , joint ventures, joint ownership  and groups of companies are not eligible for insolvency procedure. A company in formation  …

Concept

Originally reserved for commercial legal persons by form or by object, the procedure of receivership was extended by the Law of 13 July 1967  to all legal persons of private law .

However, the grouping must have legal personality: undeclared associations, de facto companies , joint ventures, joint ownership  and groups of companies are not eligible for insolvency procedure. A company in formation may nevertheless be subject to insolvency procedure if, after its registration, it takes over the commitments made at the origin of the difficulties . Similarly, the partners of a de facto company may be subject to an insolvency procedure if they carry out commercial acts .

Since a company's legal personality subsists as long as its corporate rights and obligations have not been liquidated, it may be subject to an insolvency procedure until the liquidation operations are completed . It also continues to exist in the event of nullity of the company , extension of the company voted by the shareholders before the term set by the articles of association, and despite non-compliance with the delays set out in the articles of association , and automatic striking off of the company's name by the commercial court registry for a reason other than the closure of the liquidation operations . On the other hand, an insolvency procedure may not be instituted against a company whose legal personality has disappeared following its absorption by another company .

Publication in the company and trade register (RCS) of the acts attesting to the disappearance of the legal personality of a company puts an end to the possibility of opening an insolvency procedure against it . On the other hand, the disappearance of legal personality does not prevent the opening of insolvency procedure as long as they have not been published in the RCS, even if the acts or events that led to the disappearance have been the subject of another legal publication  or if third parties have had personal knowledge of them before this formality was carried out .

The grouping must be a legal person under private law. Nevertheless, certain legal persons under private law are not subject to the provisions relating to insolvency proceedings because special regimes apply to them. This is the case, in particular, for syndicates of co-ownership , banks  and insurance companies .

The legal person under private law may take various forms. Commercial companies or civil companies such as non-trading real estate companies (SCIs)  can benefit from the regime of insolvency proceedings. Also subject to Book VI of the Commercial Code are regularly declared associations that carry on an economic activity, whether or not they are profit-making, even if they are recognized as being of public utility , professional unions, even if they are not required to keep accounts , and professional orders.

Finally, Title II of Book VI of the Commercial Code is applicable to all semi-public companies as well as to nationalized companies, whether or not they perform a public service mission. On the other hand, legal entities governed by public law, such as the State, the regions, the departments, the municipalities and public administrative or industrial and commercial establishments, cannot be subject to the provisions in question .

Law No 67-563 of 13 July 1967 on legal settlement, liquidation of property, personal bankruptcy and bankruptcies, OJ 14 July 1967.

Cass. com., 28 September 2004, LawLex202100003700JBJ (RJ).

See in particular. Cass. com. 4 January 2000, LawLex202100003688JBJ (LJ) considering that a one-man company cannot be placed in court-supervised liquidation in the year of its removal from the trade register when this removal is not consecutive to the publication of the closure of the liquidation operations.

Cass. com., 20 September 2011, LawLex202100003687JBJ (LJ).

Cass. com., 11 September 2012, LawLex202100003702JBJ (LJ).

Law No 65-557 of 10 July 1965 fixing the status of co-ownership of built-up buildings, OJ 11 July 1965, Art. 29-15: “The procedures provided for in Book VI of the Commercial Code are not applicable to syndicates of co-owners.”

CA Grenoble, 26 April 2012, LawLex202100005908JBJ (S) holding that an SCI which derives income from the building it owns may be subject to a safeguard procedure as a legal person under private law, even if the property is exclusively occupied by its partners and managers, as long as a plan for the discharge of bank liabilities would allow it to continue this economic activity. Contra, CA Chambéry, 1 December 2020, LawLex202100005831JBJ (S) considering that an SCI can be the subject of an insolvency procedure except in the absence of stake for the French economy when they constitute only a simple interposition of a legal person dictated by patrimonial or fiscal considerations.

Cass. com., 18 June 1995, LawLex202100005828JBJ (S).

Cass. com., 16 March 2010, LawLex202100001905JBJ (LJ).

Cass. com., 30 June 2015, LawLex202100005698JBJ (LJ). See also Cass. com., 23 November 2004, LawLex202100003682JBJ (RJ).

For an application, see Cass. soc., 6 November 1991, LawLex202100005829JBJ (RJ).

Cass. com., 21 June 2005, LawLex202100003676JBJ (LJ).

Cass. com., 10 March 1987, LawLex202100003681JBJ (RJ).

Cass. com., 16 December 1975, LawLex202100003679JBJ (LJ).

Cass. com., 26 November 2003, LawLex202100005708JBJ (RJ).

See in particular. Cass. com. 5 April 1994, LawLex202100005827JBJ (RJ) considering that an EIG can be subject to judicial reorganization even if its nullity has been pronounced.

Cass. com., 30 June 2015, LawLex202100003701JBJ (LJ).

CA Paris, 6 January 2009, LawLex202100003633JBJ (LJ).

Bankruptcy Law

292. Concept

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292. Concept

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