Company law, legal personality, nullity, absolute nullity, company in formation, contract law, Court of Cassation, commercial chamber, legal existence
The Commercial Chamber of the Court of Cassation reaffirms its strict position on the nullity of acts concluded by a company lacking legal existence, emphasizing the absolute character of this nullity.
[...] Court of Cassation, Commercial Chamber February 2012, n° 10-27.630, Dolce Vita Company - Legal Personality and Company in Formation C.CASS., CH. COM FEB - DOLCE VITA COMPANY - DOC - SESSION 5 - LEGAL PERSONALITY AND COMPANY IN FORMATION On know all, the famous formula of Gaston Jèze:I have never had lunch with a legal person » ; This is what Jean-Claude Soyer responds to,me neither, but I have often seen it pay the bill », and in this case, the bill of the Dolce Vita company was quite salty, due to the added supplements, because it had omitted to present itself as a 'company in formation'. [...]
[...] An absolute nullity based on an irregularity that cannot be regularized after registration If the Commercial Chamber of the Court of Cassation admits the nullity of the conventions, due to 'their irregularity could not be covered by subsequent acts of execution following the registration of the company', it is in principle to apply its well-known sanction, namely absolute nullityB). Even if the applicant company failed to meet its requirements, the position adopted by the commercial chamber is widely criticized by the doctrine, as commentators of the company code are quick to remind us. [...]
[...] 210-6 of the Commercial Code of any particular mention, and whose omission would entail nullity. Thus, nullity is subject to an in concreto assessment by the judges of fact, who sovereignly may spare cases where the common intention of the parties was "that the act was concluded in the name or on behalf of the company in formation, and that this company could then, after having acquired legal personality, decide to take over the commitments made", according to Professor Bertrand Fage. [...]
[...] By recognizing that the co-contracting companies could "rely on the nullity of the disputed conventions", the solution posed by the judges of law would remain unchanged in light of the 2016 reform, because according to commentators on the Companies Code, Articles 1145 and 1147 of the Civil Code do not call into question such a solution, as it is sanctioned in this case, the non-existence of the company at the time of the conclusion of the contracts, and it is this very non-existence that the judges of law allow co-contractants to rely on. This is a protective logic for them, but also punitive towards the plaintiff company, due to the defect in these contracts, because according to Professor Thibaut de Ravel d'Esclapon, the mention "company in formation" has the sole purpose of protecting third parties, which justifies the absolute nature "of the nullity affecting acts concluded by a company lacking legal existence". [...]
[...] Consequently, the applicant company will sue the two co-contracting companies, as well as the commercial leaseholder company on the store, for execution and prohibition under penalty. Upon the commencement of the proceedings, the applicant company, formulates a request for the termination of the conventions, and for the condemnation of the assigned companies to the payment of damages and interest. However, the assigned companies will raise a counterclaim for the nullity of the two conventions. Therefore, the applicant company decides to appeal to the cassation court in order to challenge the appeal court's decision, in that it dismissed its request for the termination of these conventions, and declared, on the one hand, the nullity of the conventions, due to the lack of regular renewal of the contracts concluded before its registration, and on the other hand, that the signatory of the contracts, had not been presented as having the capacity to contract on behalf of and for the applicant company. [...]
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