The Formalism of Taking the Act in the Name of the Company in Formation

Extract

[...] Confirmation of the implicit refusal to reprise the acts. - This judgment is in line with the judgments of the Court of Cassation refusing the implicit reprise of the acts. - The court has already refused the implicit reprise in the following cases: - in the case of implicit reprise resulting from the approval of accounts (Cass civ 2/10/2002) - In the case of implicit reprise resulting from the execution of the act (Com 1/5/2003) - In the case of assignment of a claim against the company before its registration, of the acceptance of this assignment by several founders (Cass. [...]

[...] The resumption of the company in formation must comply with the rules of substance and form of Articles L210-6 and R210-5 of the Commercial Code, which is recalled by a landmark decision dated 20 February 2019, rendered by the Commercial Chamber of the Court of Cassation. In this case, a commercial lease was granted to a company in formation. Following disturbances, the lessor and the company concluded a protocol agreement under the terms of which the company waived its right to claim damages from the lessor, in exchange for the latter's abandonment of an action to recover overdue rents. [...]

[...] - The Court conducts a strict and restrictive reading of Article 1843, so that the act passed must necessarily stipulate that it is taken in the name of the company. II) The ineffectiveness of the statutory clause for the resumption of acts An inscribable act of confirmation - It is worth recalling that in this case, the company met the formal conditions for the resumption of acts. - In fact, the company's statutes provided for a clause for the resumption of previous commitments prior to registration in the trade and companies register. [...]

[...] The Court of Cassation thus had to question the effectiveness of the lease takeover by the company. The Commercial Chamber of the Court of Cassation by a judgment dated 2 February 2019, quashed the judgment of the Paris Court of Appeal. The Court grants the claims of the appellants on the question of the takeover of acts, by a principle judgment under articles L210-6 and R210-5 of the Commercial Code. This considers in fact that the constant and non-equivocal procedural behavior of the company vis-à-vis the lease on the one hand and, the conclusion of the protocol ofaccord d'on the other hand, was not sufficient to fill the conditions inherent to the takeover of the act. [...]

[...] In parallel, another company, which was in the process of formation, made an overbid through its lawyer. The SCI contests this overbidit isFor her, the overbid of the company in formation is invalid on the grounds thatshe has not respected the rules of the resumption of acts of companies in formation. The SCI a dètherefore assigned the company in formation, La SCI a dè lors assigné la société en formation Contestation of the declaration of overbid on the immovable property. [...]