Associated files

Obligation to file annual accounts

Filing annual accounts and their associated documents with the registry office of the Commercial court is compulsory for several categories of companies.

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Judicial administration

The main reason for the legislation behind judicial administration proceedings is to allow a business in difficulty to continue its activity in the framework of legal processing, while at the same time allowing it to repay its debts and maintain its jobs.

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Practical file on the recovery of credits before the Commercial Court

Where a client fails to pay an invoice at the due date, following verification of the well-founded nature of the credit, the situation of the debtor and several friendly reminders remaining without remedy, it is often time for the creditor to being credit recovery proceedings. This then leads to the entitlement to one of the three major techniques for recovery of credits, namely: an order for payment, a referral provision and summons in substance.

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Last published

The minutes of general meetings for approval of the annual accounts of commercial companies

Once a year, the annual accounts for the last financial year, i.e., the balance sheet, the profit and loss statement and the notes, must be approved of the Annual General Meeting. More specifically, in most commercial companies (SA, SAS, SNC, SCS, SA, SARL etc. ), the members of the executive bodies are liable to heavy criminal and civil sanctions for management error, if they breach the obligation to submit annual accounts for approval by the partners or shareholders. For this reason, the members of these executive bodies must demonstrate that they have indeed submitted the company's annual accounts for the preceding financial year for approval by the partners or shareholders, who generally meet in Annual General Meeting, by drawing up minutes of the general meeting. The approval of the annual accounts is therefore strictly regulated. By approving these annual accounts, these partners or shareholders implicitly demonstrate that the documents concerned contain data that has been prepared on a true and sincere basis. They also presume that, as of the closing date of each financial year, these annual accounts reflect a faithful picture of the assets, the financial position and the book profit (or loss) for the companies' business. More generally, the approval of the annual accounts represent the indispensable tool to provide a minimum of information on the main accounting parameters, financial management and operations of commercial companies. They are therefore an essential decision making tool aiding the diverse interests of any interested person (directors; shareholders; investors; government authorities; creditors, such as bankers, suppliers; customers; competitors; commercial courts and potentially other judicial authorities, responsible for preventing and dealing with companies in difficulty) near or far, through access to the company's business data as well as by their financial, accounting and management position. For all these reasons, it is vital that the annual accounts must be approved in strict compliance with the statutory requirements.

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File : Notice to pay, a credit recovery procedure

Part 2

An application for an order for payment

An application for an order for payment

The application is the key element which triggers the order for payment procedure. It should be carefully completed and documented before being issued to the Court.

Court holding competence to rule on the application

Geographically: Notwithstanding any particular instance (for instance, in the event of unpaid charges for condominiums where the court is that of the place where the property is located), the application should reach the registry office in the remit in which the debtor (or any of them, if multiple) has a residence, for a physical person, or one of the offices, for a legal entity.

In substance for the dispute: Determination of the courtdepends on the total amount and nature (civil, commercial) of the credit for which recovery is claimed as well as the remit of the court:

  • The Presiding Judge at the Commercial Court holds jurisdictional competence, whatever the amount of the credit, if it is commercial, namely, primarily, where it came from professional relations between private persons, whether physical persons or legal entities, traders or results from a commercial deed deemed as such by law, such as for instance, a bill of exchange or any banking transaction.
  • The local judge holds competence in civil matters, for any amount equal to or less than 4,000 euros, and which does not expressly fall within the exclusive remit of the district court.
    Good to know: removal of the post of local judge was decided by the law of 1 January 2015. The jurisdictional competences will consequently be conferred to district courts.
  • Thedistrict court holds jurisdictional competence for any application in civil proceedings, for an amount equal to or in excess of 10,000 euros, or for any amount where the order for payment concerns an application falling within the exclusive jurisdictional competence of the district court, for instance, such as an application pertaining to a consumer credit agreement or accommodation lease.
    Good to know: in exception to the last example, applications for return of security deposits resulting from accommodation leases subject to the law of 6 July 1989 concerning the improvement of rental relations and for which the amount does not exceed 4,000 euros fall within the remit of the local judge.
  • The presiding judge of the district court holds competence in civil matters, for any amount equal to or above 10,000 euros, and which does not expressly fall within the exclusive remit of any other court.
    Good to know: these rules of jurisdiction are public order provisions. No derogation can be made by any contractual clause such as a jurisdictional clause, which shall be deemed as unwritten. If this is the case, the judge has the obligation of indicating the lack of jurisdictional competence immediately.

 

How to refer a matter to the court?

The application, medium for the application for an order for payment

The application consists of a written application. It may be established on blank paper or using one of the following forms, specific to the court to which the application is referred:
- Cerfa form n° 12946*01 for the Presiding Judge of the commercial court;
- Cerfa form n° 12947*02 for the local judge (in the same city, registry offices at the district court and the local jurisdiction are common);
- Cerfa form n° 12948*02 for the district court;
- Cerfa form n° 14896*01 for the Presiding Judge of the district court;

Good to know:it is possible to use the online application forms atwww.vos-droits.justice.gouv.fr

In all instances, the application is drafted, dated and signed directly by the creditor or a freely chosen representative, legal counsel, bailiff or any other person, with the latter holding a special power of attorney.

 

Content of the application and its appendices

The application should be carefully completed and documented. The legal decision which results is, indeed, handed down solely upon examination of the application and supporting documents and, therefore, without the judge having previously heard the creditor or debtor.

Concerning informations pertaining to the parties (the creditor, applicant in the order to pay procedure and the debtor), the application should indicate:

  • for applicant creditors who are physical persons, their full name, profession, residence, nationality, date and place of birth;
  • for applicant creditors who are legal entities: their legal form, name, registered office address, legal representative body, Trade and Companies Register (RCS) incorporation number (all in line, where applicable, with the following formula: Limited Company, X, having its registered office at ...... entered on the Paris Trade and Companies Register (RCS) under number ...., represented by Mr....... manager);
    Good to know: if applicant creditors have representatives, indication should be made, where the latters are physical persons, of their full name, profession (in the case of legal auxiliaries: lawyers or bailiffs), address; where representatives are legal entities, their legal form, name, registered office, legal representative body (aside for where the representative is a legal auxiliary: lawyer or bailiff) Trade and Companies Register (RCS) incorporation number (all following, for instance, the following formula: "Limited Company, X, having its registered office at ...... entered on the Paris Trade and Companies Register (RCS) under number ...., represented by Mr....... manager").
  • for applicant creditors who are physical persons, their full name, profession (if known), residence, and if known, nationality, date and place of birth;
  • for applicant creditors who are legal entities: their legal form, name, registered office address, legal representative body (if known), Trade and Companies Register (RCS) incorporation number (if known) (all in line, where applicable, with the following formula: "Limited Company, X, having its registered office at ...... entered on the Paris Trade and Companies Register (RCS) under number ...., represented by Mr....... manager").

Concerning the primary characteristics of the dispute, the application should provide the following information: the object of the application, total amount claimed and the breakdown of various elements of the credit and the basis thereof.

Moreover, the creditor may, in the application, request that in the event of any objection by the debtor to an order for payment, the matter should be immediately referred to the court indicated.

Moreover (as is indicated on the printed form), the creditor may, potentially, request that all fees be ordered on the debtor. This generally concerns recovery costs (registry office fees; tax duty; legal fees, bailiff fees). The judge considers and fixes this application and the amount of fees.

Finally, the application should be supported, in addition to the list, by the copy of supporting documents for the credit (with each one having to be dated, signed and certified as original by the applicant): letter of notice, purchase orders, unpaid invoices, drafts accepted as unpaid, letters or contracts constituting commitments to pay, exchanged letters proving the conclusion of a contract between the parties.

In such instance as the application is drafted or deposited by any other representative than a legal auxiliary (lawyer or bailiff), the application should be supported by an original copy of the power of attorney specially conferred to the representative and drafted in due form (notably dated and signed by the principal and representative).

Good to know: Dismissal of the application shall sanction the incomplete nature of information and/or supporting documents.


Terms and conditions for communication of the application to the court

The application may be sent by post, or delivered in hand to the registry office for the judge holding jurisdiction, by the creditor himself or any representative (with the latter, if not a lawyer, holding a special power of attorney).

To date, the application may additionally be sent electronically to the following courts: commercial courts, local courts, district courts.

Good to know: the application is not considered as a summons, namely as a deed by which a person is requested to appear before the judge (for instance a legal summons). Consequently, the application does not suspend the deadline for statutes of limitations to take legal action, namely the term beyond which it is no longer possible for the creditor to initiate legal proceedings. The deadline for statutes of limitations shall therefore continue to run and be enforceable on the creditor despite the deposit of the application. It is only the service of the order for payment (in such instance as the judge has accepted the application for an order for payment) which leads to a suspension of the deadline for statutes of limitations imparted on the creditor to take legal action: consequently, there shall be no time limit by law for serving summons.

 

Power of attorney template

Cost of proceedings

The proceedings for an order for payment impose few fees on the applicant.

Until receipt of the order for payment by the creditor, namely the legal decision in response to the application for an order for payment, costs are as follows:

  • 39.00 euros in registry office fees, where the proceedings are referred to the Commercial court. These fees are payable by the latest fifteen days following presentation by the applicant, failing which this shall become invalid.

Following receipt of the order and insofar as this is successful, the primary following bailiff feesare to be paid by the applicant:

  • Fees for serviceto the debtor(s) of the true and certified copy of the application and order (received at the registry office by the applicant), initially;
  • Fees for serviceto the debtor(s) of the "enforceable" order, namely, this time, with enforceable status, subsequently. It should be noted that this type of service is only possible if, on the one hand, the debtor(s) has (have) not opposed this, or if he (they) has (have) withdrawn objection and, on the other, if the specific deadline of one month, which runs from the end of the deadline for objection or withdrawal, has not expired.

Finally, in the event of objection by the debtor(s) of the order, it is incumbent upon the applicant to pay in advance to the registry office the corresponding fees :objection is received without any fees by the debtor(s) by the clerk. The latter then immediately invites the applicant, by way of recorded delivery letter with acknowledgement of receipt, to pay the fees for objection to the registry office, within fifteen days, subject to invalidity of the application of the order for payment.

The creditor may request that fees be ordered payable on the debtor. This generally concerns recovery fees: registry office fees, stamp duty, legal fees, bailiff fees. The judge shall definitively rule on this application and set the amount of fees to be paid by the debtor.
The creditor is then invited, at its request, to precisely indicate the fees already incurred, by producing all supporting documents. It may also identify the major expenses not yet incurred but which are essential, in such instance as the judge finds it justified. For instance, the creditor may indicate that in the event of any favourable decision by the judge, it wishes for the debtor to be ordered to bear "all costs for service by bailiff for the order for payment".

Good to know: granting, due to lack of means or insufficient income, of legal aid to applicants or defendants in proceedings concerning an order for payment allows the latters to benefit from payment by the State of fees in whole or in part: legal fees, bailiff or expert fees. This is why the creditor having received legal aid should produce along with all exhibits accompanying the application, the decision having awarding aid or the application for this aid.