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The take-over by a new born company of previous engagements

Publié le 26/11/2007

A decision rendered by the Commercial chamber of the Supreme Court (Cour de cassation) on the 9th of October 2007, recalls the principles applicable to the companies which are being created and the engagements taken by the entrepreneurs who have acted in the name of their future company.

Conditions

The companies which haven't yet been doted of a personality, cannot contract engagements. The partners of these firms have to take the engagements themselves until the company has its own legal personality. Once the company has been finally created, it can take over these engagements and free the persons who have acted on its behalf.

The Court recalls at first that according to article L 210-6 of the commercial code: the persons who have acted in the name of a company in formation before it has acquired enjoyment of legal personality are engaged jointly and indefinitely for the acts which have been taken unless the company takes over the engagements.

The court goes on and says that, according to article R 210-5 of the commercial code and article 6 of the 3rd July 1978 decree, the take-over of these engagements result either from:

- The signature by the partners of the memorandum of association including in its annex a state of the acts accomplished on behalf of the company,

- A mandate given by the partners before the registration of the company to one or several partners or to the employed manager, mandate which fixes the engagements to take and their conditions,

- Or, after the registration, a decision taken by a majority of partners.

The Supreme Court censures a decision of the Colmar Court of appeal which had rejected a demand to uphold the provisionary measures taken against partners because three of the four partners had accepted the engagements.

The Court applies strictly these texts and requires that one of the three conditions is found for the engagements to be taken over by the newly created company.

The acceptation by three partners does not comply with one of the conditions if a decision hasn't been taken by a majority of partners.

The partners had to comply strictly with one of the conditions but they didn't. They should have taken an explicit decision. An implicit decision isn't sufficient.

This implies that they are still jointly and indefinitely responsible for the engagements before the company has acquired its own legal personality.

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