Analysis
Jean Petreschi
Lawyer · M&A
Every year, many companies cease their business activity without carrying out voluntary liquidation operations.
As a result, it frequently happens that these same companies are struck off the register ex officio by the registry on the basis of Article R 123-25 para. 1 of the Commercial Code, which provides that:
“Where the registrar is informed that a registered person has allegedly ceased its activity at the declared address, the registrar shall remind that person, by registered letter with acknowledgement of receipt sent to that same address, of its declaratory obligations. If the letter is returned with a note stating that the person is no longer at the indicated address, the registrar shall enter the notation of cessation of activity on the register”.
Upon reading this notation on their debtor’s KBIS extract, creditors are often tempted to refrain from initiating an action for payment, since, even if they obtain an enforceable title against their debtor, they will not be able to apply to the Court for the opening of judicial reorganisation or judicial liquidation proceedings.
This view should be qualified, as it must be recalled that the striking-off leaves the company’s legal personality intact, and the director’s mandate remains in force despite the striking-off (Cass com 4 March 2020 no. 19-10501; Cass com 24 June 2020 no. 18-14248).
Indeed, Article L 631-5 of the Commercial Code provides that:
“Where no conciliation procedure is pending, the court may also be seised, upon application by the public prosecutor, for the purpose of opening judicial reorganisation proceedings.
Subject to that same reservation, the procedure may also be opened upon the summons of a creditor, whatever the nature of its claim. However, where the debtor has ceased its professional activity, such summons must be issued within a period of one year from:
1° The striking-off from the trade and companies register. In the case of a legal person, the period runs from the striking-off resulting from the publication of the closure of the liquidation operations (…)”.
The regime is identical for an application to open judicial liquidation proceedings (Article L 640-5 of the Commercial Code).
Accordingly, it is clear that a creditor cannot bring insolvency proceedings against a debtor that has, more than one year ago, been the subject of a striking-off resulting from the publication of the closure of the liquidation operations.
However, the question arises whether the striking-off ex officio provided for by Article R 123-25 para. 1 of the Commercial Code falls within the scope of Articles L 631-5 and L 640-5 of the Commercial Code.
Yet, so long as the company has not been voluntarily liquidated, its striking-off ex officio does not cause any period to run.
The striking-off ex officio is in fact merely an administrative measure that has no effect on the company’s legal personality.
Thus, the striking-off of a company ordered ex officio by the registry for cessation of activity is not to be confused with the striking-off resulting from the publication of the liquidation operations.
It is precisely in this sense that the Paris Court of Appeal ruled in a judgment handed down on 6 January 2009 (CA Paris, 3rd ch., sect. A, 6 Jan. 2009, SCI 15 rue Bouteille v. SCI 6 place des Terreaux in Lyon – Commentary by Jean-Pierre LEGROS, Droit des sociétés no. 5, May 2009, comm. 100).
Consequently, notwithstanding a striking-off ex officio of its debtor ordered more than one year ago, a creditor holding an enforceable title and having carried out unsuccessful enforcement measures may apply to the Court for the opening of judicial reorganisation or judicial liquidation proceedings against its debtor.
A solution worth knowing in a deteriorated economic climate where there is no doubt that many striking-offs ex officio will be ordered by the registries.
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