Bankruptcy Law

The current Article L. 351-8 of the Rural and Maritime Fishing Code (Code rural et de la pêche maritime) introduced by the Law of 30 December 1988 , extended the provisions of Book VI of the Commercial Code relating to the compulsory liquidation procedure to any person engaged in farming activities within the meaning of Article L. 311-1. Since the Act of 22 May 2019, known as the PACTE Law , Artic …

Carrying on an agricultural activity

The current Article L. 351-8 of the Rural and Maritime Fishing Code (Code rural et de la pêche maritime) introduced by the Law of 30 December 1988 , extended the provisions of Book VI of the Commercial Code relating to the compulsory liquidation procedure to any person engaged in farming activities within the meaning of Article L. 311-1. Since the Act of 22 May 2019, known as the PACTE Law , Article L. 640-2 of the Commercial Code no longer refers solely to the status of farmer but to the exercise of an agricultural activity, which means that not only individual farmers but also agricultural companies can be subject to receivership proceedings.

Article L. 311-1 of the Rural Code deems 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 unfolding 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 are supported by the farm. It also covers activities relating to the preparation and training of domestic equidae 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, are agricultural activities if they form part of a biological cycle of a plant or animal nature.

The Court of Cassation requires that the agricultural activity be carried out on a regular basis .

Difficulties can arise when farming is run as a partnership. Can an individual be the subject of an insolvency procedure on an individual basis? According to case law, the notion of farmer applicable to a professional individual, which justifies his or her submission to the system of insolvency proceedings, is defined not in terms of his or her capacity as manager or employee of a farming company, but in terms of the agricultural nature of the activity that he or she carries on personally and by way of his or her usual profession . Consequently, only the fact that a manager carries on an individual agricultural activity that is distinct from the business of the company of which he is the representative justifies the opening of an insolvency procedure in his personal capacity . The managing partner of an agricultural limited liability company (EARL) affiliated to the 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 the subject of an insolvency procedure .

In practice, membership of the MSA does not affect the identification of the exercise of a farming activity: a collaborating spouse, even one who is not a member of the MSA, exercises a farming activity when his or her participation is not occasional and exceeds the normal and usual assistance between spouses . Conversely, a person affiliated to the MSA has not been considered to be a farmer in the absence of proof that he or she was personally engaged in farming activities as a regular occupation . The mere fact that a person is a member of a GAEC (groupement agricole d'exploitation en commun) is not sufficient to exclude him or her from the personal overindebtedness procedure, if it is not established that he or she carries on an agricultural activity on an individual basis, separate from the GAEC's business .

Law No 88-1202 of 30 December 1988 relating to the adaptation of agricultural holdings 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 on the growth and transformation of businesses, known as the PACTE Law, OJ of 23 May 2019.

Cass. 2e civ., 16 December 2021, LawLex202200001993JBJ (LJ).

CA Montpellier, 2 April 2014, LawLex202100006047JBJ (LJ) holding that a debtor registered in the trade and companies register and not in the farmer's register, cannot contest the absence of prior appointment of a conciliator on the basis of his status as a farmer when he is summoned for compulsory liquidation since he acknowledges that he is a service provider and not a farmer and that his crop service activity does not correspond to that of controlling and exploiting a biological cycle of a plant or animal nature.

See by analogy, CA Grenoble, 27 September 2012, LawLex202100003631JBJ (RJ), holding that even if registered in the trade and companies register, the operator of a riding school offering riding lessons and trail rides as well as the taking on of horses for boarding constitutes an agricultural activity, capable of benefiting from the provisions of receivership, subject to the appointment of a conciliator.

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

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

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

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

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

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

Bankruptcy Law

626. Carrying on an agricultural activity

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626. Carrying on an agricultural activity

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Les décisions de justice citées dans ce paragraphe :

Les notions juridiques connexes

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