Corporate law
Disputes relating to a commercial company: the director does not have the choice of jurisdiction
As a rule, the commercial courts have exclusive jurisdiction to hear disputes relating to commercial companies. By way of exception, non-commercial parties who are not members of the company’s governing bodies may choose to bring their disputes before the consular or civil courts. When a dispute arises between the director or another corporate officer or partner of a commercial company and that company or another of its partners or corporate officers and concerns a dispute relating to that commercial company, it therefore falls within the exclusive jurisdiction of the commercial court.
The conditions for taking over an act performed in the name of or on behalf of a company under formation: a major change in case law
Under articles L. 210-6 and R. 210-6 of the French Commercial Code, commercial companies acquire legal personality from the date of their registration in the Trade and Companies Register. Persons who have acted in the name of or on behalf of a company under formation before it has acquired legal personality are jointly and severally liable for all acts performed, unless the company, after having been duly formed and registered, takes over the obligations entered into, which are then considered to have been undertaken by the company from the outset. In the case of an act in which it is not expressly stated that it has been entered into in the name of or on behalf of the company being formed, it is for the judge to assess, in a sovereign manner, by examining all the circumstances, both intrinsic to the act and extrinsic, whether it was not the common intention of the parties that it should be entered into in the name of or on behalf of the company and that the company could then, after acquiring legal personality, decide to take over the commitments entered into
Liability of the manager of a limited liability company (“société à responsabilité limitée, SARL”) and cancellation of his current account: limitation period
Liability claims against a former SARL manager and shareholder are subject to a three-year limitation period. A claim for damages brought against the manager for the cancellation of a current account agreement is subject to the same limitation period, and not to the five-year limitation period under ordinary law.
A creditor of a dissolved civil company (“société civile”) must take action against the company before taking legal action against a partner
A creditor of a civil company may only take action against the partners to recover a company debt after having unsuccessfully taken legal action against the company, even if the company is being voluntarily liquidated.
Statutory auditors (“commissaires aux comptes”) cannot be relieved of their duties without serious misconduct or a serious impediment
The removal of a statutory auditor requires proof of sufficiently serious misconduct. In addition, the mere fact that the entity within which the auditor carries out his duties brings an action for liability against the auditor does not constitute an impediment justifying his removal.
IP/IT and Communication
Non-pecuniary damage resulting from a material error in the communication of personal data
In a ruling handed down on 25 January 2024, the Court of Justice of the European Union confirmed that in the event of a personal data breach, the data subject may seek compensation for his or her loss under the conditions of ordinary liability law. A purely hypothetical risk of misuse by an unauthorised third party cannot, however, give rise to compensation.This is not the first time that the Court of Justice of the European Union has shed light on the interpretation of Article 82 of the General Data Protection Regulation, under which any person who has suffered material or non-material damage because of unlawful data processing has the right to obtain compensation for the damage caused by the data controller.
Electronic prescribing: conditions for implementation and entry into force
French decree no. 2023-1222 of 20 December 2023 formalises the entry into force of electronic prescribing by specifying the conditions for its implementation by healthcare professionals, the exercise of patients’ rights and the cases in which, by way of derogation, electronic prescribing may not be applied.
Employment law
It is up to the employer to prove the provision of business premises in order to avoid paying compensation to the employee
According to the Social Law Chamber of the French Supreme Court (“chambre sociale de la Cour de Cassation”), the burden of proving the provision of business premises to determine whether to award compensation for home occupation for business purposes lies with the employer and not the employee.
Untaken leave according to European law
The Court of Justice of the European Union has ruled on the interpretation of the directive about “working time” (“temps de travail”). A worker who has not been able to take all his paid annual leave before resigning is entitled to financial compensation. Member States may not limit this right on the grounds of controlling public expenditure.
A new formality for employers offering a permanent contract to an employee who has completed a fixed-term contract or assignment
The “loi Marché du travail” of 21 December 2022 introduced an obligation for employers offering employees a permanent contract in the same or a similar role as the completed fixed-term contract, to notify such an offer in writing. This obligation applies from 1st January 2024.
Lack of a resumption medical visit by the employee: reversal of case law
Until now, if an employee’s resumption medical visit was not organised, he could not claim payment of his remuneration. However, he could be compensated for the loss suffered. In a ruling dated 24 January 2024, the French Supreme Court (“Cour de Cassation”) changed its position on compensation for employees whose resumption medical visit is not scheduled: they are now entitled to payment of their remuneration.
2024 Olympic Games: introduction of a derogation from weekly rest periods
In a decree issued on Friday 24 November, the French government authorised companies involved in broadcasting or organising the Paris 2024 Olympic Games that are experiencing an extraordinary increase in workload to suspend their employees’ weekly rest periods “two or more times” between 18 July and 14 August.
Declaration of the professional equality Index before 1 March
By 1st March 2024, all companies with 50 or more employees must have calculated and published their professional quality Index on their website. The professional equality Index enables companies to measure the pay gap between women and men and highlights the areas for improvement where these disparities are unjustified.
The conditions under which foreign nationals can become “entrepreneurs individuels” have been clarified
The Immigration Law (“loi immigration”) n. 2024-42 of 26 January 2024 now stipulates that foreign nationals of countries that are not members of the European Union, the European Economic Area (EEA) or the Swiss Confederation may not work as “entrepreneurs individuels” if they do not have a legal residence permit.
Real estate law
It is not a violation to rent a furnished tourist accommodation more than the legal annual limit when it is justified by a professional reason, such as a work placement or the pursuit of a course of study
It should be remembered that, in municipalities that have implemented the “prior declaration registration procedure” (“procédure d’enregistrement de la déclaration préalable”) set out in article L 324-1-1 of the French Tourism Code, any person who offers for rent a furnished tourist accommodation that is declared as their principal residence may not do so for more than 120 days per calendar year, except in the case of a professional reason, health reason or case of force majeure. The legal tribunal ruled that an internship or the pursuit of a course of study can also be considered as a professional reason if it is for a specific and limited period. This exception must be demonstrated by the coincidence in time between the business trips and the periods of rental of the furnished tourist accommodation.
Commercial tenants are not liable for damage caused by obsolescence, unless expressly stated otherwise
A clause in a commercial lease requiring the tenant to return the premises in their original condition does not require him to pay for any damage caused by obsolescence. If an inventory of fixtures was drawn up when the tenant entered the premises, he must return the premises as he received them on the original inventory, except for anything that has perished or been damaged by obsolescence or force majeure.
Tax
An act may be considered abusive even if a lawful act could have had the same result
The abuse of rights procedure allows the tax authorities to disregard transactions that may not have been inspired by any motive other than that of evading or mitigating the tax charges that the taxpayer would normally have incurred in view of his actual situation or activities. This procedure can only be applied if the transaction resulted in a tax gain for the taxpayer. The French Council of State (“Conseil d’Etat”) clarifies that acts which have no impact on the taxpayer’s burden cannot be dismissed as constituting an abuse of rights even if their sole purpose was to evade or mitigate that burden.
Financial sanctions and penalties taxed abroad are not in principle deductible
The French Council of State (“Conseil d’Etat) has recently ruled that the legal provisions which provide for the non-deductibility of tax sanctions and penalties may apply to sanctions imposed by foreign authorities for breaches of foreign legal obligations.
Sale of a business and retirement: only one year left to benefit from the 500,000 € allowance
French Finance Act (“loi de finances”) 2017-1837 of 30 December 2017 introduced an exceptional allowance of 500,000 € on the capital gain on the sale of an executive who sells his or her business and retires. This scheme, which had already been extended, expires on 31 December 2024. Senior company directors planning to sell their business and retire still have a year to take advantage of this attractive tax window.
Country
France
