Associated files

Notice to pay, a credit recovery procedure

The order for payment procedure, through a legal formality and at less cost, allows a creditor of a sum of money to order the debtor to make payment, in a unilateral and rapid manner (on average, in under two months).

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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 : Practical file on the recovery of credits before the Commercial Court

Part 2

Referral provision

Referral provision

Representation by a lawyer is not compulsory

Fast track procedure (fifteen days - one month)

Cost: 35 euros + 48.59 euros + bailiff fees

What checks prior to applying for referral provision?

1°) Ensuring that the liability cannot be seriously contested

This involves ensuring that the credit is certain in existence (namely that the obligation to pay which is the source thereof is clear in its principle, at least in appearance) and that its date of payment has passed. However, it matters little that the amount of the obligation, and therefore the credit, is calculated or can be calculated.

2°) To ensure that the situation of the debtor is not excluded from the referral procedure

Good to know: in terms of referral provision, it is needless to claim and prove the urgent nature that there may exist in recovering the credit, as objection by the judge of this condition, as required by law in other types of referral proceedings, is not in the present case.

 

How to serve summons and plead in referral provision?

1°) Decide to prepare and plead the matter alone or using a lawyer with or without the benefit of legal aid (in such instance as legal aid is requested, it is highly recommended to await the decision of the legal aid office being granted or refused before initiating the referral provision procedure).

2°) If the creditor should choose to intervene himself without the assistance of a lawyer, he should:
- Ensure that the credit 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.

- Identify the Commercial court geographically competent to receive the referral, which involves ensuring that this court is indeed that which falls within the remit of the location where the debtor has its residence, for a physical person, or one of its offices for a legal entity

- To prepare the summons, namely:
o    entitle the deed and header: "Summons for referral-provision before the Presiding Judge at the ..... Commercial court holding a hearing in summary proceedings on.......",
o    indicate the identity, details and potentially characteristics of the parties (for instance if one of them is a company: its form, company name, incorporation number on the Trade and Companies Register (RCS), registered office),
o    indicate the total amount and breakdown of the credit claimed,
o    summarise the object of the application, its basis (the primary facts and the reason(s) for the liability),
o   do not forget to request payment by the debtor of recovery fees (notably stamp duty, registry office fees, bailiff service fees),
o    list on the header page "the list of documents indicated in the summons", the documents indicated in the body of the summons, which have been previously enumerated, and on which the creditor basis its rights; annex this page to the summons,
o    annex a copy of all supporting documents in support of the summons,
o    prepare a copy of each of these documents and affix on the first page, at least on the most important of these, the indication "true and certified copy of the original", followed by the signature of the creditor,
o    then select a hearing date directly on the website of the Commercial court registry office and complete the summons with this date.

- File the draft summons for referral provision with the registry office and the list of enumerated documents which are indicated therein and make payment by cheque or credit card for registry fees (48.95 euros for any dispute including at least two parties, namely the creditor, still called the applicant, and the debtor, still called the defendant).

- Serve the summons, the list of documents and the copy of documents to the recipient (defendant) by way of a bailiff, and await issue by the bailiff of the second original copy (duplicate) of the summons as served on the defendant.

- Place (namely file) the entire matter with the Commercial court registry office in duplicate (one for the applicant, the other for the presiding judge at the Commercial Court), including the second original copy of the summons, the list of documents indicated in the summons and the copy of said documents.

- Plead the case in the hearing before the presiding judge at the Commercial court and the opposing party, itself and/or representative (for instance, a lawyer), namely verbally or inform the judge that you wish to have reference to the written bundle, filed and served to the court, namely the bundle comprising the summons, the list of documents filed and served and the documents themselves, annexed to the summons.

Good to know: it is strongly recommended that you attend court with the full bundle and, if pleadings are solely verbal, effectively summarise by ensuring to relate the essential facts and arguments and eliminating any additional details.

 

What does the judge decide and how are people informed?

The creditor receives the decision handed down by the presiding judge in the form of an ordinance. This is referred to as "automatically provisionally enforceable", which means that its legal remit shall automatically allow the successful party to request immediate enforcement of the ordinance, immediately following service by a bailiff, despite the effect of any potential appeal (which in principle shall suspend enforcement of the order).

Insofar as the referral ordinance is positive for the creditor, the latter should immediately serve notice thereof, by way of a bailiff, on the debtor.

 

What to decide after dismissal of the referral provision?

In such instance as the ordinance should dismiss its request, the creditor should decide whether or not it wishes to relinquish its legal action against the debtor.

If the creditor should decide to continue taking legal action against the debtor, it shall have a choice of two channels:
-    eitherto lodge appeal against the ordinance, within fifteen days following the date of service thereof by a bailiff, before the registry office of the commercial chamber of the court of appeal within the remit of which the debtor (or one of them if there are more than one) has a residence for a physical person, or one of the offices for a legal entity;

-    or serves summons on the debtor for payment "in substance".

 

When to request enforcement of the ordinance by the debtor?

Insofar as the ordinance for referral provision is favourable for the creditor, the latter may request that the debtor performs the ordinance and, where applicable, may request forced enforcement.

Ceteris paribus, this request by the creditor may only be made following service by bailiff of the ordinance on the debtor.

Following this service, two options are then available to the creditor:
- either to request from the debtor, immediately, enforcement and, where necessary, forced enforcement of the ordinance, even if appeal has been lodged;
- or, more cautiously, to request from the debtor pure and simple enforcement of the ordinance and, where applicable, forced enforcement after having previously ensured complete expiry of the deadline allocated to the latter to lodge appeal (fifteen days following the date of service of the ordinance by bailiff).