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 3

The summons for payment in substance.

The summons for payment in substance.

Representation by a lawyer is not compulsory

Lengthy procedure (several months or years)

Cost: 82.17 euros for two parties + 35 euros in stamp duty + bailiff fees

What checks should be undertaken prior to serving a summons in substance?

The creditor should ensure that the credit is well-founded, which involves checking that the credit actually exists. In other words, it is necessary to check if, for instance, the credit is the result of services provided to the debtor and that performance of these services may be concretely proven to the latter, independently from invoicing.

The creditor should additionally check that the date of payment of the credit has passed, in other words that the due date of the invoice has passed.

Finally, the creditor should seek to know if the amount of the invoice is clearly determined or can be determined.

 

How to serve summons and plead on a payment request?

1°) The creditor should decide to prepare and plead the matter alone or with the assistance of a lawyer with or without the benefit of legal aid. In such instance as legal aid is claimed, it is strongly recommended to await the decision from the legal aid office for acceptance or refusal of this aid before initiating the summons.

2°) If the creditor should choose to intervene himself without the assistance of a lawyer, he should:

- 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 in substance before the.... Commercial court  ".
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 stamp duty (35 euros) and registry fees (82.17 euros for any dispute including at least two parties, namely the creditor, still called the applicant, and the debtor, still called the defendant).

- Serve on the recipient (defendant) by way of a bailiff: the summons, the list of documents and the copy of documents at least fifteen days prior to the date of hearing 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, and

- Await the response of the debtor in the most common form of submissions in response, as well as the date on which the court orders the creditor to respond if it wishes.
In the latter instance, the creditor should issue a response in a document which in practice may be entitled "statement of case in request". This text should include a more detailed description of the summons. The statement of case should be printed in at least two original copies, dated and signed by the creditor. Both copies should be issued by the creditor in the hearing to which it is convened by the court, with one copy being intended for the clerk present in these hearings, the other to the opposing party, also supposed to be present at the hearing.

Good to know: frequently, disputes in substance are not simple and cannot lead to an immediate ruling. Indeed, the creditor may issue a new statement of case in response to that of the debtor. To do this, during the hearing in which the debtor files and serves its statement of case in response and to which the creditor is convened, the latter may request that the court grant a deadline extension necessary to issue a further statement of case, and so on until the parties have nothing further to add to their previous documents, or the court decides the case can be heard. The court shall make a ruling in this direction where it believes that the exchanges in statements of case between the parties have lasted long enough and allowed the parties to be fully aware of their reciprocal arguments.

- 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.

Search for a Registry Office

What does the judge decide and how are people informed?

1°) The creditor receives the ruling handed down by the Commercial court by post. This ruling may be enforceable, or not.

If the ruling is enforceable it allows the successful party to request immediate enforcement thereof following service by bailiff, despite any potential appeal which the defendant may lodge.

If the ruling is no enforceable, it shall only become so if the deadline allocated to the debtor to lodge appeal has expired without the latter having used this right of redress.

Contrary to the referral provision ordinance, the enforceable indication is not automatic, and it may even be the object of a request for "suspension of provisional enforcement" before the presiding judge at the court of appeal lodged by the debtor. If this request is accepted, it will lead to depriving the ruling from any possible immediate enforcement by the debtor. It will only be afterwards, if the court of appeal confirms the ruling, that the creditor may request pure and simple enforcement of the request.

2°) Insofar as the referral ordinance is positive for the creditor, the latter has every interest to serve this immediately on the debtor by way of a bailiff.

 

What to decide after dismissal of the payment request?

If the ruling dismisses its request, the creditor should decide whether or not it wishes to relinquish its legal action against the debtor.

If the creditor decides to continue taking action against the debtor, it should lodge appeal against the ordinance, within one month 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. This is the reason why the creditor generally has an interest to rapidly serve the ruling, unless the debtor does this first.

 

When to request enforcement of the order for payment

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. After this service, the creditor may be in one of the two following cases:

-    In such instance as the ruling is enforceable, the creditor has two options:
o    either to request from the debtor, immediately, enforcement and, where necessary, forced enforcement of the ordinance, even if appeal has been lodged by the defendant (the debtor),
o    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 (one month following the date of service of the ordinance by bailiff).

-    In such instance as the ruling is not enforceable, the creditor may not 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 (one month following the date of service of the ordinance by bailiff).