French Business Law Flashcards

Question

What are the effects to third parties in the lease of the going concern?

Answer 1

People who are not in the contract, often creditors Art L 144-6 Com C Creditors of the lessor They may if the lease puts at risk the payment of their rights, ask the commercial court to declare their claims immediately payable There is a risk they the lessor does not earn enough money to pay them and therefore put them at risk. L 144-7 Com C Creditors of the lesse. Until the going concern lease contract is published, the owner of the business (lessor) is jointly and severally liable for the debts incurred during the operation of the business. Incitament to publish the lease.

Answer 2

There is no right for the lesse to renew the contract Various kinds of termination of contract and reasons for its ending - End of the contract, end date. No right for the lesse to renew contract (different from commercial lease) - If the lesse do not pay royalties - If the lesse does not run the business If the lesse causes damages to the going concern, he may be liable for it and pay damages. For instance broke tools. The lesse cannot claim compensation for the increase in value that he as brought to the going concern. At the end of lease, the lesse must immediately pay all his debts So it is better to buy a going concern than to lease it.

Answer 3

- Must meet the traditional conditions of a contract. Consent, capacity, content, purpose, lawful, must exists (see french law of obligations 21/10) - Formal conditions. Express references required (Art L 141-2 Com C): Day of transfer, the document shows the monthly turnover, end of the last financial years and the month before the month of the sale - important information of the buyer

Answer 4

Obligations for the seller - Guarantee of deliverance: Put buyer in effective position of going concern, like presenting customer base, explain tools, inform the lessor of the building - Guarantee of quiet enjoyment. The seller must do nothing which allows him to take back what he soled, not compete. - Guarantee against hidden defects. Possibility to ask for full reimbursement of the purchase price or price reduction. Obligations for the buyer - Must pay the price, but must not pay immediately, but in 10 days: The opposition period The creditors may oppose. The price may be payed to the creditors directly, instead of to seller.

Answer 5

A contract, but also an asset Concerns the premises on which the going concern is run Contains rules which tend to protect the merchant/owner of going concern. Application: Lease contract is a contract by which the lessor makes a property available for the lesse.

Answer 6

The lesse must be a merchant registered with the RCS or a craftsman registered with RDM (Art L145-1 Com C) Exception to register if do not own but is the only party what will benefit from the status of commercial lease Neither liberal professionals or farmer benefit from the commercial lease and its protection. Owner of premises --> Commercial lease with lesse of premises --> Lease of going concern with lesse of going concern Art L 142-5 Com C Must be a commercial activity/going concern operated by the lesse The lease must concern a building or premise intented for the exercise of the commercial activity - No truck, not just land. Must be a building.

Answer 7

- Contracts that are too short Art L 145-5 Com C: Leases of less than 3 years, seasonal rents - Contracts that are too long Between 17 years and 99 years.

Answer 8

Duration of 9 years Mandatory for the lessor Every three years the lessor may terminate the contract, but he must meet very precise conditons. May terminate by Notice of Beliefs- registered letter.

Answer 9

Déspecialisation - the right to change the activity Déspecialisation partielle: In part. You run additional activities connected or complementary indicated in the leases. Case law: Piano bar, karoke are complemantary to bar or hotel business Déspecialisation plénière: A total modification. Not complementary. Requires permission from lessor.

Answer 10

Subleasing is prohibited in principle. It could be provided in the lease-contract, but no right. Opposite to Civil law, see 17.17 CC.

Answer 11

The lease contract is a contract but also an asset. And a part of the going concern. If you sell the going concern --> The lease goes with it. The seller of the going concern must present to the owner the buyer of the going concern, which will be the lessor.

Answer 12

Rent revisions every 3 years (same rent 3 years) Principles for the new rent: Fixed according to rental value, what takes into account: - the specific nature of the premises, - the use of the premises, (what kind of activity will occur) - the respective obligations of the parties, - the local market factors (the commercial attractiveness of the neighborhoo, is it a nice area? restaurants near by? the prices for rent obtained in the immediate neighborhood) The rent cannot exceed a legal platform. The rental value will not apply all the time. Protection against too high increases of rent, there is a legal ceiling.

Answer 13

Lesse has the right to renewal of the contract or right to an eviction indemnity Not an absolute right because the lessor has the right to refuse. But he will have to pay eviction indemnity.

Answer 14

- SNC Société en nom collectif: General partnership - SARL Société à responsabilité limitée: Limited Liability Company - SA Société anonyme: Corporation - SAS Société par actions simplifiée: Simplified shares company

Answer 15

Art 1832 CC 1 § A company is created by two or several persons who agree by contract to assign property or their industry to a common purpose with a view to sharing the profit or benefiting from the economy that may result therefrom.” 2 § “It can be created, in the cases provided for by the law, by the act of will of a single person.” 3 § “The shareholders undertake to contribute to the losses”

Answer 16

- Two or more shareholders Exception: Single shareholders companies. Art 1832 2§ EURL, SASU, SAS - Existence of contributions - The sharing of profits and losses - The will to act in the company

Answer 17

Single shareholders companies. Art 1832 2 § EURL Entreprise unipersonnelle à responsabilité limitée - single shareholder SARL SASU Société par actions simplifiée unipersonnelle - single shareholder SAS

Answer 18

Capital = Sum of all the constributions (except services) The contributions contributes to the social capital of the company and the shareholders receive some "rights in the capital", shares, in exchange. Shares (droit sociaux) consists of Parts sociales and Actions: Some companies issue shares called Actions: SA, SAS Some issue shares called Parts Interest-shares/Parts sociales: SNC, SARL, Société civiles Rules that apply to them are very different, for instance regarding tax.

Answer 19

If company with actions, you will receive actions. If parts sociales, you will receive those. The more you contribute to the company, the more you will receive. If you contribute 50 %, you will have 50 % of the profits. In some companies you can have more rights to vote. If you contribute 50 %, you will have 50 % of votes in general meeting. Not true in companies where you need unity. One vote per head.

Answer 20

- Cash contributions - most common - Contributions in kind - movable, immovable, tangible, intangible property. Car, going concern, asset. Either the actual ownership of the asset or the right to use it. - Contributions in services - bring your work or noho for the company, not as an employed. Is not taken into account as capital in the company. Because hard to give value.

Answer 21

The sharing of profits = Each shareholder has the right to receive a divident, a part of profit, when distributed The sharing of losses = The shareholder is obliged to share losses In companies with no limited liability --> Shareholders are liable for the company's debt. They can lose far more than what they brought. The debtor's can claim payment from the shareholder for the company's debts Companies with limited liability --> Shareholders have to share losses, but the maximum they can lose is the contribution

Answer 22

Not expressly in Art 18.32 CC. Definition by case law: Willingness of shareholders to work together as equals for the success of the joint venture Outdated because today single shareholders exists. Today it would bebetter to say: The willingness to be apart of the company Case law has used this to discover the existence of a company: A De facto created company - when two people act as if they were shareholder of a company, even if they have not realized they are a part of one, they have created one. This results in that they have to share profits.

Answer 23

- If you are two: Contract / If you are alone: Unilateral act It can have special effects and lead to creation of legal entities, but not all the time. For instance, the De facto created company has no legal personality. - You have to write Articles of the company The contribution of each shareholder (cash, services, assets, etc) The legal form (SNC, SARL, SA, SAS) The purpose of the company The name of the company The registered office The company's capital The company's duration (99 years max with renewal) The rules and mechanisms of the company's functioning - Then you must register the company at an Enterprise formality center. --> Important because at the time of registration your company has legal personality

Answer 24

The company as a legal person is a person: It has a name, a nationality, a home, a patrimony Once you bring sometjing to the company, it does not belong to you anymore, but the company. Risk of abuse of company assets - a criminal offence which exists in companies where you are not personally liable. This crime is en exception to this The lift of the corporate veil - the courts have disregarded a corporate personality and looks straight to an owner or owners for accountability

Answer 25

For these Commercial law applies, they are merchants, Commercial Courts have jurisdiction: - SNC - SARL - SA - SAS They are commercial companies by their form. If the shareholders choose one of these forms, they will automatically be a commercial company. No matter if they run a civil activity.

Answer 26

General partnership Characteristics: - At least 2 shareholders - Company of persons - important: who are shareholders? - Shareholders are merchants who need commercial capacity (not a minor, have permission to carry out this activity) - Principle of unanimity in general meetings. Unanimity is required (enhällighet) One head one vote. - Shareholders receive interest-shares/parts sociales - Permission is required to sell shares - Contributions of services are allowed - No minimum capital is required - Jointly and severally liable for company's debts - Managers are called Gerants. They have all the power to act on behalf of the company - Company is only bound by the act taken within the company's purpose Why this kind? Does not have to publish its account. Tax reasons LIDL France Tobacco shops are always SNC.

Answer 27

Limited liability companies - Most common commercial company - 1-100 shareholders. Not too big company, then more suitable with SAS If only one shareholder it is called URL - Between Company of persons and company of capital - Contributions of services are allowed - Contributions in kind are allowed, but specific rules must be observed (valuation of commisaire aux comptes who valuate the value of asset) - No minimum capital is required - Shareholders receive parts sociales - Sale of shares to third party requires agreement. - Limited liability for shareholders: Not liable for the debts of the company - Decisions in general meetings require in principle only a majority of vote - one share one vote. Sometimes more if you want to modify articles of the company. - Managers are called Gerants. More powers than those in SNC. They have all the power to act on behalf of the company. - Company is bound by the act not taken within the company's purpose

Answer 28

Coorperation Only for big company's. Complicated structure. - 2 or more shareholders. 7 if the SA is a listed company - SA can be a listed company (shares are admitted on a regulated financial market) (only very big companies) - Minimum capital: 37 000 - Capital company: What the shareholders bring is important, not the person - Contributions of services are not allowed - Contributions in kind are allowed (with valuation of commissaire aux comptes) - Shareholders receive shares called Actions (easier to sell than parts sociales, less formalities in tax, you don't have to get consent by other shareholders) - Shareholder's liability is limited - Decisions in general meeting require majority of vote. One share one vote.

Answer 29

- Structure with administrative board: A collegial body who has power only to give general orientation, aims of the company. Chaired by a president: President du conseil d'administration, known as the PDG: President directeur general Possibility for a CEO (directeur general), not not mandatory. The president binds the company by the contracts he signs, even if not within scope of company's purpose - Structure of directorate and supervisory board More modern structure 2 governing bodies: Directorate and supervisiory board. Directorate is a collegial body which exercises all powers traditionally granted to president, and some granted in the classical strucutre of administative board. Only shareman of dictorate who is authorized to act on behalf of the company. The role of supervisiory board is limited, only to supervise actions of directorate.

Answer 30

Simplified shares company - Most popular form of company. A recent form of company created in 1994. - Natural persons can now be shareholders. Before it was only legal persons. - Freedom to organize the company. Its up to the articles of the company, but there are some mandatory rules, like you cannot supress the right to vote of the shareholders - Single Shareholer SAS is possible: SASU. - Contributions in services are possible - Contributions in kind are possible (in exchange you get actions d'instustri) - No minimum capital - Shares are called Actions. Shareholders are called Actionnaires - Limited Liability for shareholders - Manager is called President - CEO of company. Mandatory. Binds the company by contract which do not fall within company's purpose

Answer 31

Also called a Civil Company - it has civil activity, not commercial They are very frequent. For instance organizing the management of immovable asset, or activities of independent professionals like lawyers Most famous is SCI Société civile immobiliére - 2 shareholders or more - Company of persons - Principle of unanimity - Shares are called parts sociales - agreement from other shareholders i requires to sell - Contributions of services are allowed Shareholders are jointly, but not severally liable for company's debts --> The creditors must divide his claims. - No minimum capital required - Manager is called Gerant. Only bound by contract concluded within the company's purpose

Answer 32

All independent professionals Not just merchants

Answer 33

Rules made to protect enterprises against competition, and protect competition itself to enable competition to exist.

Answer 34

- Non-competition clauses - Unfair competition action

Answer 35

One party undertakes not to compete with the beneficary of the clause Exception to the principle of freedom of trade It is valid under certain conditions: - The prohibition must be limited in time and space - The ban must be legitimate and proportionate. Legitimate: A good reason. Proportionate: to the purpose it serves, not more than necessary. - If employment contract, there must be financial compensation (according to case law) If any of these are not met --> The clause is void. If it is valid and debtor does not apply --> Sued for damages because breach of contract, and the competing activity can be stopped

Answer 36

Protection even if absence of a competition clause Art 1349 CC 5 kinds: - Disorganisation/Disruption. To disorganise another enterprise. To poach to many employees. - Disparagement. To discredit a person or a product. Conditions: Pejorative statements - say something not friendly Disparagement is directed either at a business or at its products or services Must concern an identifiable person or business Statements must be public - Some comparative advertising Only allowed if: Not misleading, not tell lies, not create confusion, must be objective Must comparee enterprises, product or services that are comparitable Quality, price, shape, color but not taste - taste cannot be compared. Case 2020 Lidl "J'aime" - pretented taste was the same. - Imitation leading to confusion. Imitating a companys name, packaging, letters, drawings. It can mislead the customer. If a trademark is imitated you have a specific infringement action. - Parasitic behavior. Imitating another business, but not confusion. You take advantage of work of another enterprise and make profit without paying the costs of the company creating it Case 2015 Slogans "Grands volumes, petits prix" - unfair competition because it gave same impression Art 1240 and 1241 you may raise action called Unfair Competition and may be protected without a clause or contract. You can receive damages.

Answer 37

- Control of operations and practises which reduce competition - Control of restrictive practises

Answer 38

Good for business and economics in general. It is an incentive for innovation when companies compete, to create new products, enhance the quality and lower the prices. Desirable for customers. It can have negative effects, like lower wages for employees, get product of less produce to make profit

Answer 39

- Preventative control (a priori control) - Control of anti-competative practises (a posteriori control) The competition Authority can sanction anti-competative practises and concentrations. It also has a consultative role. For the government in question regarding competition

Answer 40

- Operation of concentration - Threshold of control

Answer 41

Art L 430-1 Com C 3 types of operations of concentration: - Mergers (Le fusions) Like M&A at law firms. - Control acquisition - Creation of a joint-venture

Answer 42

An operation between two companies. The absorbing company is absorbing the absorbed company. The absorbed company will disappear. The patrimony will be transferred to the absorbing company - all assets, obligations, contracts. The absorbing company will use this patrimony to increase its capital - is able to create new shares. The shareholders from the absorbed company will receive them. In the end you only have one company.

Answer 43

Operation of concentration where one enterprise acquires control of all or part of another enterprise. One decides for the other. For instance if one buy the majority of shares by another. FNAC required Darty.

Answer 44

When two independent enterprises creates a joint venture Most common: Joint subsidiary - Owned by another company or more Must perform all the functions of an autonomous economic entity on a lasting long-term basis Economic entity: Creation of an independent economic activity. For instance two car companies working togetehr to research new models is not a concentration, just a cooperation

Answer 45

Art L 430.2 Com C Requires that the operation exceed the threshold for the concentration to be controlled. - Must be a strong impact on competition Two cumulative thresholds must be met to trigger concentration control: - Combined pre-tax turnover worldwide of all the businesses involed in the operation must exceed 150 milllion Euros - At least two of the participating legal or natural persons must have a pre-tax turnover in France at least 50 million Both must be met!

Answer 46

How will the authority conduct the control. - The definition of the relevant market - The effects on the concentration

Answer 47

The Assessment criteria. - The definition of the relevant market - The effects on the concentration

Answer 48

Which market is concerned with the operation? Products or services which may be substituted one for another given their characteristics, price or use Customer point of view. Case: Can Roquefort be substituted by other blue cheeses? No it is not the same thing. It is made from goat, the others are made from cow. It is much more expensive. What is the geographical limit of the relevant market? It can be a European size market.

Answer 49

They have to determine negative effects on competition and compensation by contribution to economic progress. Stronger effect if enterprise has a very dominant position on the market. For instance, monopoly will have an effect. The operation must exceed a certain threshold. It it does, there will be a control by the Competition Authority.

Answer 50

Competition Authority may stop the operation Or authorize the operation but ask parties to make commitment

Answer 51

Even if negative effect, it can be authorized by the Authority if it sufficiently is contributing to economic progress. If a concentration is a way to reduce costs, rationalise production method or reduce prices of products and services for the interest of customers. For instance franchises Must be proportionate. The control occurs before the operation and they must obtain an authorization.

Answer 52

- Cartels / Anti-competative agreements - Abuses of dominant position

Answer 53

Art L 420-1 Commercial Code: prohibits all forms of agreement that "have the purpose, or could have the effect of preventing, restraining or distorting free market competition" - All kinds of businesses can be involved in a Cartel - The parties do not have to be competitors. Does not only apply to horizontal agreements (competitors) but also vertical agreements (supplier-distributors) - For instance a clause of exlusisity between supplier and distributor can have negative effect on the market - The agreement prohibited may be of various forms. Written, oral, concerted practise. L'oreal Case: Exchange information on prices L 420-2 Com C gives examples of agreement which can have such consequences - Those preventing other enterprises from entering the market or prevent freedom of competition - Dividing the market geographically - Predatory prices. When an enterprise sets low prices to limit competition, two enterprises together set low prices to eliminate all competition Competition Authority must prove that the agreement has the purpose or effect to reduce competition There is a threshold for the effect: - Vertical agreement: Not if parties hold less than 15 % of relevant market share - Horizontal agreements: Not if parties hold less than 10 % of relevant market share The sanction is fines, max 10 % of annual turnover

Answer 54

Art L 420-4 Com c Economic progress 4 conditions 1. Economic progress thanks to the agreement (best distribution practises, creating or maintaining jobs) 2. The benefit of the economic progress it not only to the parties of the agreement. As well for customers, employees or other enterprices 3. The harm to competition must not exceed what is necessary to reach the economic progress 4. Must not eliminate competition

Answer 55

Art L 420-2 Com C The relevant enterprise must dominate the relevant market or a substantial part of it Decide the relevant market, see above. Conditions: 1. Dominant position: Owning 50 % of the relevant market, or if less than 50 % a very famous trademark 2. Abuse, two categories - Anticompetative abuse: Practices that have as their object or effect the elimination of competitors. Exclusionary effect. Refusing to supply another business, fix predatory prices, the denial of use of essential facilities Case 1996 Company which operated the airport were prohibited from using the airport - Abuse of exploitation. Set too high prices

Answer 56

Two kinds of Restrictive practices: - Concern pricing - Constitutes an abuses They are prohibited per se - even if no proof of negative consequence on competition Both protection and prohibition of competition. And to protect the other party in a weaker position, or competitors Competition Authority has no jurisdiction, instead DGCCRF, or Commercial court for damages

Answer 57

- Resale below cost - Minimum resale price

Answer 58

Art L 442-5 Com C: Resale below cost threshold: purchase price Only resale of unaltered goods, not services Why this prohibition? It gives customers a fake image of competition. Distributor who sells below costs give the impression of having best prices, but in he wants to steal competitor's customers Not necessarily beneficial for customers. The low price will be compensated on other products

Answer 59

- Winter or summer sales - Termination of the activity - Products that have been re-supplied at a lower price - The need to realign prices with other traders operating in the same geographical zone

Answer 60

Art L 442-6 Com C A seller, supplier, imposes a minimum price of resale to its reseller/distributor. Why do that? Do not want product be be concidered a cheap product. But it is not allowed because kills competition between resellers. Recommended prices and maximum prices are allowed.

Answer 61

Art L 442-1 Com C: - Obtaining a benefit without consideration or which is manifestly disproportionate to the service rendered - Obligations creating a significant imbalance - Sudden termination of established relationship - Illicit terms of the contract Not only to protect competition, but also to protect a commercial partner in a weak position - to ensure fairness in business Like protecting suppliers against distributors. B2B.

Answer 62

Art L 442-1, 1, 1 Com C To receive an advantage that does not correspond to any reprossity from you Also if it is disproportionate from what you give in exchange A fake commercial cooperation - a contract that occurs when the reseller offers services to supplier in advance to increase resale of product supplied by supplier. For instance Ficititous commercial cooperation - "Tetes de gondola" : When the products of supplier are in places in the beginning of the shells of the shop

Answer 63

Art L 442-1, 1, 2 Com C, Art 212-1 Consumer C The practice of imposing, or attempting to impose, on the other party, obligation creating.a significant imbalance in the rights and obligations of the parties is prohibited Significant imbalance = In clause, imposes an obligation without any repreossity Reform ordinance 10 feb 2016 Art 1171 CC In a standard contract, any non-negotiable clause that creates significant imbalance is void

Answer 64

Art 442-1, 2 Com Code Prohibits such practice which is an abusive termination of a relationship You must give sufficient notice. What is it? It depends on: Duration, nature of activity, there are customs - Established duration - Single long contract, without any definite duration - Succession of fixed-term contracts 18 month notice is in any case sufficient This prohibition only applies to established relationships. It must be a commercial relationship for a long period of time and a significant volume of business. A single long contract. If you have not a definite duration, you have the right to terminate whenever you want. Perputrial contracts, for life, are forbidden

Answer 65

Art L 442-3 Com C Clauses or contract which allow retroactive rebates, reductions or commercial cooperation agreement are considered null and void "One year after buying t-shirt you are entitled to reduction" Goal is to prevent Practice of the Wedding basket. If the absorbing company in a merger used new strenght to force its partner to grant commercial advantages for instance retroactive predictions. (can also be abuse of dominant position) The most favored nation clause - prohibits any clause which allows a party to automatically benefit from the more favourable terms granted to competing enterprises by their co-contracting party

Answer 66

When an enterprise produces a product they can sell it directly to end users, but most of the time they do not - and instead use a distribution network. At the head of the network - Promotor.of The network, a company that will conclude Distribution contract, with various Distributors

Answer 67

The distributor are independent professionals and merchants The distributor will use employees to distribute their products, it can also be employees of supplier or agents of the producer. They sell products on behalf of the supplier Retailers and wholesalers are two kinds of distributors - Retailers - the end users are customers - Wholesaler - you are grossist and clients are professionals, the chain is longer.

Answer 68

Exclusivity purchase agreement Exclusive distribution conctracts Selective distibution contracts Franchising

Answer 69

Obliges one contracting party to buy specific products for resale only from the contracting party Frequent between bar and their drink supplier, and gas-station and oil company Such contracts may have negative effects on competition. If you have an exclusivity clause you are not allowed to buy from other suppliers - no competition Despite this, they are most of the time considered valid because these kind of contract contribute to economic progress Also an issue with Restrictive Practises. Must not be obligation without reprossity and you must give sufficient notice. Art L 330-1 Com C gives protection against restrictive practices, max 10 years

Answer 70

To resell with own profit It is a kind of commercial activity, and distributors are merchants You can provide in your contract whatever you want as long as you respect mandatory rules. They are not Nominated contracts. They can conclude those contracts and have protection though

Answer 71

A supplier grants the distributor right to be the sole distributor for the products on a given territory defined by the agreement - There is a defined territory. For instance France national territory - Gives territory monopoly for disrtibutor For instance car supplier Renault, each distributor has its own territory and will be the only distributor of the territory Despite it being an anti competition agreement it is allowed because it allows economic progress One must also be aware to not have restrictive practices.

Answer 72

The distributor will be selected according to criteria which enable the supplier to be sure that the image of its product will not be damages because of the distribution Common contract in luxery products. Art L 442-2 Com C: When there is in a contract a Prohibition of a non-network resale - the fact for a third party to contribute to the violation of the contract - is a wrongdoing But paralllel import is in principle not prohibited But case law said it can be at fault when a supplier sells its product to underprices which are not a part of the network. Case Law: Lidl can be held accountable if Rolex is sold there. First distibutor not apart of the Network. Issue with competition law because only selected distributors will have right to sell products. But valid still because good effect on economy. Restrictive practices will apply, and even a more specific one provided for these contracts in 442-2 Com C

Answer 73

A specific know-how was developed by an undertaking franchisor to distribute its products, and this undertaking grants independent franchisees, for a fee, the right to establish themselves in other markets, using its busimess name and the business methods that have made it successful So for franchisees, the right to use know-how, trademarks, internal signs, patents, commercial names In exchange they pay fees. Franchisors will earn from activity without having to carry it out themselves Art 330-2 Com C: When a supplier imposes distributors a purchase exclusivity clause in exchange to use its trademarks, tradename, know-hos Must give precise information provided by this article, at least 20 days before the signing of the contract Ex McDonalds, Hairdresssers Restrictive practices must be avoided. Resell minimum price prohibition mustbe repsected.

Answer 74

Non-merchant - Sales representatives - Commercial agents - Managers Merchants intermediaries - Commission agent - Brokers

Answer 75

A natural person Sell products of the employer Protected by labor law Conditions: - Must represent his employer's products on a professional basis - find customers - Contract with employer must cover certain mandatory issues: precise category of product, relevant sales territory, commission rate of sales - Must perform his activity on exclusive and full-time basis - Protection when the contract terminates - minimum notice period, termination indemnity

Answer 76

Mandate contracts, not labor Commercial agents are Mandaitre, the other party The Principal, supplier, is the Mandant They sell products on behalf of the principal Paid with commission More freedom than a VRP. Can create a company, hire employees, carry out activity, hire employees Some protection, right to termination indemnity

Answer 77

Exists in distribution contract which organizes the management of the business of somebody else They manage a branch (it can constitute a separate business) They act on your behalf No legal personality For some labor law applies, for some not

Answer 78

L 7322-1 Labour Code: They are governed by labor law Conditions: - The manager must be autonomous - in control of the management of the business - A food retail business activity - Remuneration by discounts Protection by labor law - Minimum wage - Right to obtain financial compensation from non-competition clause - Dismissal indemnity - Compensatiúon from expenses, overtime, paid holidays Liable for inventory shortfall

Answer 79

Manager but employe, but many labor provisions will apply Art 7321-2 Conditions: - Must sell goods that he receives exclusivity or almost exclusivity from the same company - Activity must be carried out in premises provided or approved by the principal - Products must be sold under conditions and at prices imposed by the principal

Answer 80

Art L 146-1 Com C Natural or legal person Manages a going-oncern or craft going-concern Remuneration: Commission proportionate to the turn-over Freedom of manager - free to set working conditions, employ whoever he wants etc Protection. minimun commission in framework agreement, termination indemnity

Answer 81

Art L 132-1 Com C Acts in is own name but on behalf of the commission principal Principal and client are alien to each other. Cannot sue, not bound to each other Commission agent and client bound by contract The principal and the commission agent are governed by the commission contract - provides obligations for both parties Obligation of commission agent: must conclude contrat as provided in the commission contract, like buying products, must report to principal, return price to principle Obligation for the Principle: Must pay reminition of the agent based on turn-over achieved. All expenses must be reimbursed by commission principle. Good contract for when principal wants to be unknown. Because being competitor or foreign.

Answer 82

L 110-1 Com C A merchant Do not take part in concluding contracts. They simply bring together parties to a future contract. Once they find a client they will put them in touch with principal Do not guarantee that the contract will be concluded Principal must pay the broker Many brokers are submitted to special rules - insurance brokers, bank loan brokers, estate agents, marriage agents

Answer 83

Droit des enterprises en difficultes is better expression than Droit des procedures or Droit des faillites Faillites is simply a sanction when debtor has commited a fault Procedure collectives is not a good term either, because there are proceedings which are not collective Not Bankrupcty law because it is sanction. Applies on all independent professionals, a part of business law. Today in insolvency law there is a difference between fate of enterprise and fate of entrepreneur Idea is that the earlier difficulties are discovered, the more chances there are to save the enterprise

Answer 84

- Alert Proceeding - people can alert company's director. President of Com court, shareholders, SARL, auditors -Ad hoc agent - volontary and confidential proceeding. Debtor can ask president of Com court to designate such an agent. Asks for discounts. - Conciliation proceeding Art L 611-4 Com C In the case of an actual or foreseeable legal economic or financial difficulty. Aim is to settle an amicable agreement to put an end for difficulties for debtor Enterprise must not have been in suspension of payment for more than 45 days: Unable to pay its due and payable debts out of its assets (cash or easily sold) Designation of a conciliator for 4 months Confidential. L 611-15 Com C Agreement recorded. Agreement approved by Com Court if 3 conditions are met: 1. The debtor is no longer in suspension of payment 2. The agreement is deemed to ensure the continuity of enterprise activity 3. The agreement must not be against interest of creditors who have not sgiend it --> Guarantee to be paid before other creditors in case of a proceeding

Answer 85

Creditors in collective discipline, cannot individually claim for payment of the debts Creditors must declare their claims - Safeguard proceeding - Rehabilitation proceeding - Liquidation proceeding

Answer 86

Art L 620-1 Com C Debtor must not be in suspension of payment Only debtor itself can ask for such a proceeding Must encounter difficulties he cannot overcome Lighter kind of proceeding. Consequence: Debtor stay at head at the enterprice Insolvency judge appointed Administrator will help will negotiations and help debtor manage the enterprise Creditors representatives will act on behalf of creditors, defend their interest Observation period of max 6 months. The financial state will be evaluated, assets, debtor will ty and find wats to overcome difficulties, negotiations with creditors --> Adoption of a safeguard plan approved by Court (if everything goes well) Debt restructing, reduced, delayed, recapitalisation. Duration max 10 years

Answer 87

Art L 630-1 Com C Requires a suspension of payment - economic situation worse than safeguard Debtor must ask for the opening of a rehabilitation proceeding at latest 45 days after the suspension of payments Compulsatory when conditions for such a proceeding is met Less favourable rules for debtor Observation period Rehabilitation plan Sale plan to sell enterprise or its assets Debtor may loose his enterprise Unlike safeguard, the appointment of administrator is mandatory, if big enterprise (20 employees)

Answer 88

Art 640-1 Com C Economic difficulties too strong to overcome. no chance to save enterprise or adopt rehabilitation plan Idea is to sell the enterprise. In whole, part or asset by asset Liquidator is only manager of the enterprise - debtor has no longer any powers "Dessaisissement du debteur" Activity may continue for a few months

French Business Law Flashcards

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