Corporate law
SAS (société par actions simplifiée): free competition and abuse of equality (“abus d’égalité”) by a shareholder
Unless otherwise stipulated, a shareholder of an SAS may engage in an activity that competes with that of the company, but must refrain from unfair competition.As shareholder with equal shares, he commits an abuse of equality by voting against an operation that is essential for the company, with the sole aim of favoring his own interests.
A contract can be unilaterally terminated for fault, even in the presence of a resolutory clause
The resolutory clause expressly stipulated in a contract of sub-contracting does not deprive the main contractor of the possibility to terminate the contract due to delays in performance imputable to the sub-contractor. The serious nature of the conduct of one party to the contract may justify the other party unilaterally terminating the contract at its own risk, regardless of the formal conditions for contractual termination.
Approval of the company financial statements may constitute acknowledgement of a company debt
Approval of the company financial statements by the meeting of shareholders may constitute acknowledgement of a company debt if the shareholders were able to verify the existence of the disputed invoice and contest it.
Construction law
Constructions not subject to the principles of classification as immovable works
Mandatory ten-year liability insurance (assurance obligatoire de responsabilité décennale) does not cover the so-called “non-subject” works (ouvrages dits non soumis) listed at article L. 243-1-1, I, of the French Insurance Code. This text, which sets out an exception to the principle that all works are covered by a mandatory policy, must be interpreted strictly. Thus, where there is more than one work for a single program, each work is analysed independently.
Employment law
An employee subject to an annual fixed hours agreement cannot be an executive manager (“cadre dirigeant”)
The labour chamber of the French Supreme Court ruled that the conclusion of a daily package agreement subsequently declared unlawful did not allow the employer to claim that the employee belonged to the category of executive manager. This solution has subsequently been confirmed. However, if there is an incompatibility between the status of ‘executive manager’ and that of an employee subject to a daily package agreement, this incompatibility of status is even more marked in the case of an employee working under an annual fixed-hour agreement who, unlike an employee subject to a daily package agreement, is subject to the legal weekly working hours and to the provisions relating to maximum daily and weekly working hours.
Collective proceedings: no minimum 30-day notice period for redundancies
In companies with less than 50 employees under collective proceedings, the minimum period of 30 days after which the employer may notify a “major” economic redundancy (licenciement économique) does not apply. Failure to comply with the notice period for economic redundancies constitutes a simple formal irregularity, which does not deprive the redundancy of real and serious grounds. The same penalty applies in the event of failure to comply with the notice period for dismissal on personal grounds (licenciement pour motif personnel).
Companies with 11 to 20 employees: no exemption from organising elections in the absence of candidates
In companies with 11 to 20 employees, the employer must organise professional elections even if there are no candidates within 30 days following the notification to the employees. Insolvency
Transfer of a goodwill (“fonds de commerce”), the approval clause in the commercial lease (“bail commercial”) is binding for the liquidator
The clause in a commercial lease providing for the lessor’s approval of a lease transfer must be respected by the lessee’s liquidator when he transfers the lease, with or without the goodwill, and not under the transfer plan.
Liability proceedings for insufficiency of assets: exclusion of management faults committed during the observation period (“période d’observation”) in the event of conversion from legal redress (“redressement”) to judicial liquidation (“liquidation judiciaire”)
When a debtor’s judicial liquidation is ordered during or at the end of the observation period of a legal redress procedure, the judgement converting the legal redress procedure into a judicial liquidation procedure does not open new proceedings. Therefore, no sanction may be ordered on the basis of article L. 651-2 of the French Commercial Code for misconduct committed during the observation period of the legal redress, as only management misconduct committed prior to the judgment opening the collective proceedings may be taken into account for the application of this text.
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