Bankruptcy Law

Since the law of 26 July 2005 , when the debtor has ceased his professional activity, the creditors' right to summon must be exercised within to a period of one year. Within this period, the court may open an insolvency procedure against a debtor who has ceased his business activity, provided that, at the time of examination of this request, there are residual and due business liabilities which th …

Cessation of activity

Since the law of 26 July 2005 , when the debtor has ceased his professional activity, the creditors' right to summon must be exercised within to a period of one year. Within this period, the court may open an insolvency procedure against a debtor who has ceased his business activity, provided that, at the time of examination of this request, there are residual and due business liabilities which the debtor cannot meet with his available assets, whether or not the cessation of payments predates the cessation of his activity . The Court of Cassation first verifies that all or part of the liabilities stem from the ceased activity, in accordance with Article L. 631-3(1) of the Commercial Code . A self-employed nurse who ceased her activity in 2004, but who is being sued for her professional debts after 1 January 2006, the date on which the law of 26 July 2005 came into force, is subject to the procedures instituted by Book VI of the Commercial Code .

In the case of a legal entity, the period runs from the date of removal from the company and trade register following publication of the close of liquidation operations, while in the case of a legal entity not subject to registration, it runs from the date of publication of the completion of liquidation. In addition, the one-year period starts to run from the cessation of business activity in the case of a craftsman, a farmer or an individual exercising a self-employed professional activity, including a liberal profession subject to legislative or regulatory status or whose title is protected.

Thus, at the request of a creditor, the court may not initiate a receivership procedure against a lawyer who practised on an individual basis before becoming a partner in a professional partnership more than one year after ceasing to do so, even if all or part of the liabilities stem from this prior professional activity . An individual may not be summoning an insolvency procedure simply because he or she is still registered as a self-employed professional, unless it can be shown that he or she is still carrying on that activity at the date of the summons, or less than a year before, especially if he or she has been convicted of fraud and banned from practising for five years . Similarly, a dental surgeon who has ceased to practice as an individual and become the sole shareholder of an incorporated professional practice (société d'exercice libéral), no longer acts in his own name, but in that of the partnership, and can no longer be summoned to file for receivership after the one-year period has elapsed .

Lastly, the cessation of a natural person's activity does not prevent the adoption of a receivership plan, the sole purpose of which is to pay off the individual's liabilities .

Law 2005-845 of 26 July 2005 on safeguarding businesses.

Cass. com., 15 February 2011, LawLex202100003661JBJ (LJ) ; 4 July 2018, LawLex202100001851JBJ (LJ).

See in particular, CA Paris, 27 July 2012, LawLex202100006045JBJ (LJ).

Cass. com., 17 May 2011, LawLex202100003649JBJ (RJ).

Cass. com., 9 February 2010, LawLex202100003660JBJ (RJ), LawLex202100002207JBJ (LJ).

CA Pau, 18 May 2011, LawLex202100005833JBJ (LJ).

Cass. com., 16 September 2004, LawLex202100001850JBJ (RJ).

Cass. com., 4 May 2017, LawLex202100001853JBJ (RJ) ; CA Bourges, 15 February 2018, LawLex202100006040JBJ (LJ).

Bankruptcy Law

317. Cessation of activity

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Les notions juridiques connexes

317. Cessation of activity

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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