Procedures Guide

The Procedures guide allows entrepreneurs and decision-makers to have a reliable, precise and up to date overview of legal procedures and measures concerning commercial formalities to be undertaken. It is broken down into 6 sections in which you can find information and documentation required for formalities with Registry Offices at the Commercial Courts.

Legal pledge

Registrations of legal pledges are governed by the provisions of the Law of 9 July 1991 and the Decree of 31 July 1992. These texts have been effective since 1 January 1993.

Under the provisions of Article 2355 of the Civil Code, the legal pledge of an intangible property (shares in commercial companies) is governed by the provisions relating to civil executory procedures.

General characteristics

The creditor who justifies an unpaid debt and deems that its collection is uncertain may obtain a security interest on certain property of its debtor, without demand of its agreement. The security interest obtained under such conditions is called a judicial security.

Among judicial securities, two are established by registration or publication with the clerk of the commercial court: a legal pledge on a business and the legal pledge on shares of a company.

JUDICIAL AUTHORISATION IS MANDATORY OR OPTIONAL DEPENDING UPON THE CIRCUMSTANCES

It is optional when the creditor files: a writ of execution, a non-executory legal judgement, proof of payment default on a bill of exchange, promissory note, or a cheque or rental cheque (for a lease).

Judicial authorisation is mandatory if the creditor does not file these documents.

AUTHORISATION IS GRANTED IN THE FORM OF ORDER RENDERED UPON REQUEST

  • by the executory judge who is a magistrate of the competent court of first instance;
  • by the president of the commercial court who is competent only when the debt invokes the competence of the commercial courts, provided that no jurisdiction was established relative to the debt.

REGIONALLY, THE COMPETENT JUDGE IS THE ONE FOR THE RESIDENCE OF THE DEBTOR

Registration formalities

In all cases, the legal pledge first gives rise to a temporary registration (even when the creditor possesses a writ of execution), then to notice to the debtor within eight days of the filing of the registration form or of notice to the company (Article 255 of the Decree of 31 July 1992), and finally, the final registration.

TEMPORARY REGISTRATION

TIME FRAME

The temporary registration must be undertaken within a maximum of three months from the date of the order granting authorisation.

If the registration is made without prior authorisation, no time frame applies.

COMPETENCE

Registration is undertaken

  • for a legal pledge on a business assets: to the clerk of the commercial court in the jurisdiction where the business is located (Article 252 of the before-mentioned Decree);
  • for a legal pledge on shares of a company: by way of notice to the company (Article 253 of the same Decree); the pledge instrument is then published in the Trade and Companies Register (RCS) (court clerk for the headquarters of the company).

DOCUMENTS TO PROCUDE FOR REGISTRATION OF A LEGAL PLEDGE FOR BUSINESS ASSETS

The creditor must file with the court clerk:

- two registration forms, including all references anticipated with respect to pledge of the business assets,

- and a copy of the order authorising registration,

the documents justifying such rights (writ of execution, a copy of a non-executory opinion, bill of exchange or promissory note, cheque returned for insufficient funds, copy of the lease and certification of default of a payment).

DOCUMENTS TO PROCUDE FOR REGISTRATION OF A LEGAL PLEDGE FOR SHATES IN A COMPANY

The creditor must file with the court clerk:

- two notices of pledge of shares (for civil societies),

- two copies of the instrument for pledge of shares noticed to the company,

- and: a copy of the order authorising registration, or

the documents justifying such rights (writ of execution, a copy of a non-executory opinion, bill of exchange or promissory note, cheque returned for insufficient funds, copy of the lease and certification of default of a payment).

NULLITY

Temporary registration preserves the security during a period of three years, which is renewable. Without confirmation during this period, temporary publication is void and its removal can be required by the enforcement judge (Article 265 of the above-referenced Decree).

FINAL REGISTRATION

TIME FRAME

In all circumstances, the creditor must inform the debtor of the establishment of the pledge by bailiff's order during the eight days following:

the filing of the registration form (legal pledge on business assets)

or notice of the pledge to a company (legal pledge on company shares).

The final registration can only be undertaken during the month following notice of temporary registration to the debtor. This is the time frame during which such may dispute the temporary registration (Article 72 of the Law of 1991, and Articles 217 and 218 of the before-mentioned Decree of 1992).

For the maximumtime frame in which final registration must be undertaken, two cases may arise:

  • if the creditor already possesses a writ of execution, the final registration must be made within a maximum of three months from the notice to the debtor;
  • if the creditor does not possess such writ during the temporary registration, the final registration must occur within a maximum of two months from the date when it was obtained.

COMPETENCE

The final registration is made with the clerk of the commercial court where the temporary registration was made.

DOCUMENTS TO PROCUDE FOR REGISTRATION OF A LEGAL PLEDGE FOR BUSINESS ASSETS

- Two registration forms, including all of the references anticipated with respect to pledge of business assets and expressly indicating references and the date of temporary registration.

- Notice to the debtor of the temporary registration.

- When the temporary registration is made without writ, the decision entered on the decided matter accompanied by a certification of no-contest or of non-appealability.

DOCUMENTS TO PRODUCE FOR REGISTRATION OF A LEGAL PLEDGE ON SHARES OF A COMPANY

- Two notices of pledge of shares (for a civil society).

- Notice of temporary registration to the debtor.

- When the temporary registration is made without writ, the decision entered on the decided matter accompanied by a certification of no-contest or of non-appealability.

Effects of registration

The temporary registration is effective for three years. It is renewable, by the creditor, as long as such has not proceeded to final registration.

Final publication ranks the security to the date of initial formation (Article 260 of the before-mentioned Decree).

The registration of a judicial pledge of business assets, once final, is valid for ten years.

The registration of a judicial pledge on company shares, once final, has a duration not limited by the law for civil companies.

It confers to the creditor the same rights as if the pledge had been consented to by agreement.

Marginal references

Refer to the sections on pledge of business assets, pledge of shares in a civil company, and pledge of company shares.

Prices

(Prices with tax)

Payments to be made to the order of the relevant GREFFE DU TRIBUNAL DE COMMERCE.

REGISTRATION (including postal costs)

For a debt of less than 20,800 euros: 28.03 euros.

For a debt equal to or exceeding 20,800 and less than 41,600 euros: 102.91 euros.

For a debt exceeding 41,600 euros: 151.27 euros.

REFERENCE TO PRECEDENCE, SUBROGATION AND RENEWAL (including postal costs)

For a debt of less than 20,800 euros: 13.99 euros.

For a debt equal to or exceeding 20,800 euros: 31.15 euros.

MARGINAL REFERENCES (including postal costs)

For all amounts: 7.18euros.