Associated files

Which articles of association for what business?

Identifying whether a company's business is commercial or 'civile' (non-commercial) in nature is a preliminary step that is essential when determining its legal form as well as its social security and tax regime. It is only after identifying this, that the business owner may choose the legal form most appropriate to his/her project.

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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 : Mothballing a company

Part 1

Mothballing a company

La mise en sommeil d'une entreprise

Mothballing a company who is the voluntary suspension of a company's activity for a maximum period of two years; it is performed with no other reason for suspending operations. This is therefore a transitory suspension of the company's activity, without its dissolution being requested.

Why and how should a company be mothballed?

This procedure makes it possible to freeze the activity of a company without definitively and completely ending it through dissolution-liquidation and consequent cancellation.
The procedure must not be used to hide financial difficulties; in such a case the prevention of business difficulties procedure should be engaged (alert procedure, conciliation), alternatively insolvency proceedings (judicial safeguard, recovery or liquidation).
Unless there is a clause to the contrary in the articles or special legal provisions, the legal representative (manager or chairman) of the company decides whether to mothball. However in order to limit his liability, he could require the decision to be made by the single partner or shareholder or group of partners or shareholders, depending on whether the company is single-person or multiperson.
The declaration of temporary suspension of activities must be made within one month from the date of the decision to mothball. The company accounts must continue to be regularly maintained, closed and filed throughout the entire period of temporary suspension. The mothballing declaration is performed by the director, to the competent CFE (Centre of business procedures), for example the commercial court registry pursuant to article R. 123-5 of the commercial code (formerly known as "Article 3". It gives rise to a modifying inscription in the RCS (Trade and Companies Register). Automatic insertion in the Bodacc (official Gazette of civil and commercial announcements) by the Commercial Court Registry will render modification of the company denomination enforceable against third parties. Insertion of a mothballing notice in a legal announcement Journal is optional.

Access form M2 "Modification Declaration – Legal Entity"

Why and how should an individual business be mothballed?

This procedure makes it possible to temporarily freeze operation of the company's activity without completely and definitively ending it.
It is the individual entrepreneur (the trader) who decides whether to mothballed his business. The procedure must be carried out within one month of temporarily suspending activities. It is carried out with the CFE or the commercial court Registry pursuant to article R. 123-5 of the commercial code (formerly known as "article 3"). Automatic insertion in the Bodacc (official Gazette of civil and commercial announcements) by the Commercial Court Registry will render modification of the company denomination enforceable against third parties.

Costs of mothballing a company

The procedure for mothballing a company is 190.24 euros for a legal entity. This amount includes the fee for the announcement in the Bodacc as well as fees for the registry, VAT, and INPI (National Institute for Intellectual Property) fees. Payment must be made out in favour of the commercial court registry (followed by the name of town). Should the person performing the mothballing procedure not be the legal representative, a power of attorney granted by the latter is mandatory.

Costs of mothballing an individual company

The procedure for mothballing costs €104.34 for an individual business. This amount includes fees for the registry, VAT, fees for insertion in the Bodacc, and fees for the INPI. Payment must be made out in favour of the commercial court registry (followed by the name of town). In addition, if the person carrying out the mothballing procedure is not the legal representative, a power of attorney granted by the latter is mandatory.

Good to know: even if it is the representative who performs the procedure, the obligation to produce a power of attorney from the person in whose name the and on whose behalf the procedure is performed, does not apply, providing the inscription request is signed by the declaring party.
 

Access the power of attorney template