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6.  Having embezzled or concealed all or some of the assets or fraudulently increased the liabilities of the legal person.

7.  Having kept accounts which are manifestly incomplete or irregular.

II. – The date on which payments are suspended shall be set in the judgment instituting administrative order or winding-up proceedings of the legal person.

IV. – Proceedings shall be statute barred three years after the judgment setting out the recovery plan for the undertaking or, where there is none, the judgment ordering winding-up.

 

 

Article L624-6

 

In the cases for which provision is made in Articles L. 624-3 to L. 624-4, the court shall act ex officio or shall be petitioned by the administrator, the creditors' representative, the commissioner responsible for executing the plan or the procureur de la République.

 

 

Article L624-7

 

For the purpose of the provisions of Articles L. 624-3 to L. 624-5, the court may, either ex officio or at the request of one of the persons referred to in Article L. 624-6, instruct the court-appointed receiver or, where there is no court-appointed receiver, a member of the court appointed specifically to obtain any documents or information from administrations and public agencies, welfare and national insurance agencies or credit institutions on the assets of natural persons or legal persons acting as directors or natural persons acting as standing representatives of directors who are legal persons, as referred to in Article L. 624-2, any statutory provisions to the contrary notwithstanding.

 

Chapter V: Personal bankruptcy and other prohibition measures

 

Article L625-1

 

Where an administrative order or winding-up proceedings are instituted, the provisions of this chapter shall apply to:

1.  Natural persons exercising the profession of trader or farmer or entered on the trades register.

2.  Natural persons acting as de jure or de facto directors of legal persons which have an economic activity.

3.  Natural persons acting as standing representatives of legal persons acting as directors of the legal persons defined in No 2 above.

 

 

Article L625-2

 

Personal bankruptcy shall result in prohibition from directing, managing, administering or directly or indirectly controlling any commercial or artisan undertaking, any farm holding and any legal person exercising an economic activity.

 

 

Article L625-3

 

At any point during the proceedings, the court may declare personally bankrupt any natural person who is a trader or farmer or who is entered in the trades register and who is charged with:

1.  Having abusively continued to operate a loss-making business which was bound to result in insolvency.

2.  Having failed to keep accounts in accordance with the law or removed all or some accounting records.

3.  Having embezzled or hidden all or some of the assets or fraudulently increased the liabilities.

 

 

Article L625-4

 

At any point in the proceedings, the court may declare personally bankrupt any natural person who is a paid or unpaid de jure or de facto director of a legal person who has committed one of the acts referred to in Article L. 624-5.

 

 

Article L625-5

 

At any point in the proceedings, the court may declare personally bankrupt any person referred to in Article L. 625-1 who is charged with:

1.  Having exercised the profession of trader, artisan or farmer or held office as a director or administrator of a legal person despite being disqualified by law.

2.  Having purchased items with a view to reselling them at a loss or used ruinous means in order to obtain funds with intent to avoid or delay the institution of an administrative order or court-ordered winding-up.

3.  Having made commitments, on behalf of a third party and without a counterparty, which were considered excessive when made, given the standing of the undertaking or legal person.

4.  Having paid or arranged for payment to be made to a creditor to the detriment of the other creditors once payments had been suspended and knowing that they had been suspended.

5.  Having omitted to declare suspension of payments within fifteen days.

 

 

Article L625-6

 

The court may declare a director of a legal person who fails to pay the legal person's debts for which he was responsible personally bankrupt.

 

 

Article L625-7

 

The court shall act ex officio or at the petition of the administrator, the creditors' representative, the liquidator or the procureur de la République in the cases for which provision is made in Articles L. 625-3 to L. 625-6.

 

 

Article L625-8

 

The court may disqualify persons from directly or indirectly directing, managing, administering or controlling either any commercial or artisan undertaking, farm holding or legal person or one or more thereof, in lieu of declaring them personally bankrupt.

The prohibition referred to in the first paragraph may also be ordered against any persons referred to in Article L. 625-1 who failed, in bad faith, to give the creditors' representative a complete, certified list of their creditors and the amounts outstanding within eight days of the judgment instituting the procedure.

 

 

Article L625-9

 

The voting rights of directors declared personally bankrupt or disqualified in accordance with Article L. 625-8 shall be exercised at the general meetings of shareholders of legal persons subject to administrative order or winding-up proceedings by an agent specifically appointed by the court at the request of the administrator, the liquidator or the commissioner responsible for executing the plan.

The court may order all or some of these directors to sell their shares in the legal person or may order the forced sale thereof by a legal agent, where necessary after an expert opinion.  The proceeds from the sale shall be used to pay some of the company's debts, insofar as the said debts were the directors' responsibility.

 

 

Article L625-10

 

Where the court orders the personal bankruptcy or prohibition provided for in Article 625-8, it shall set the term thereof, which shall be at least five years, and may order the provisional enforcement of its ruling.  Forfeitures and prohibitions shall cease ipso jure at the end of the term set, without the need for a judgment.

The judgment closing the procedure because the liabilities have been paid shall reinstate the entrepreneur or the directors of the legal person in all their rights and shall dispense them from or relieve them of all forfeitures or prohibitions.

In all events, interested parties may request that the court relieve them of all or some forfeitures or prohibitions by making an adequate contribution towards payment of the liabilities.

Where relief is granted from all forfeitures and prohibitions, the court judgment shall include discharge.

 

  

Chapter VI: Aggravated bankruptcy and other offences

 

Section 1: Aggravated bankruptcy

 

Article L626-1

 

The provisions of this section shall apply to:

1.  Any trader, farmer or person entered on the trades register.

2.  Any person who has acted as the direct or indirect de jure or de facto director or liquidator of a private legal person exercising an economic activity.

3.  Any natural person acting as the standing representative of a legal person acting as the director of a legal person as defined in no. 2 above.

 

 

Article L626-2

 

If administrative order or winding-up proceedings are instituted, the court may institute an administrative order or winding-up proceedings against any paid or unpaid de jure or de facto directors charged with:

1.  Having purchased items with a view to reselling them at a loss or used ruinous means in order to obtain funds with intent to avoid or delay the institution of an administrative order or court-ordered winding-up.

2.  Having embezzled or hidden all or some of the debtor's assets.

3.  Having fraudulently increased the debtor's liabilities.

4.  Having kept fictitious accounts or removed accounting documents from the undertaking or the legal person or failed to keep any accounts required by law.

5.  Having kept accounts which are manifestly incomplete or irregular.

 

 

Article L626-3

 

Aggravated bankruptcy shall be punished by five years' imprisonment and a fine of 500,000 francs.

Accessories to aggravated bankruptcy shall be liable to the same punishment, even if they are not traders, farmers or artisans or do not directly or indirectly act as the de jure or de facto directors of a private legal person exercising an economic activity.

 

 

Article L626-4

 

Perpetrators of or accessories to aggravated bankruptcy who are directors of investment service companies shall be liable to seven years' imprisonment and a fine of 700,000 francs.

 

 

Article L626-5

 

Natural persons found guilty of the offences for which provision is made in Articles L. 626-3 and L. 626-4 shall also be liable to the following additional punishment:

1.  Deprivation of civic, civil and family rights as stipulated in Article 131-26 of the Penal Code.

2.  Prohibition, for a period of no more than five years, from public office or from exercising the professional or social activity in or during the exercise of which the offence was committed.

3.  Exclusion from public procurement contracts for a period of no more than five years.

4.  Prohibition, for a period of no more than five years, from issuing cheques other than cheques allowing the drawer to withdraw funds from the drawee or certified cheques.

5.  Judgment to be posted or displayed as stipulated in Article 131-35 of the Penal Code.

 

 

Article L626-6

 

The criminal jurisdiction which finds one of the persons referred to in Article L. 626-1 guilty of aggravated bankruptcy may also declare them personally bankrupt or disqualify them in accordance with Article L. 625-8.

Where a criminal jurisdiction and a civil or tribunal de commerce have passed final judgments declaring a person personally bankrupt or disqualified in accordance with Article L. 625-8 for the same deeds, the sanction ordered by the criminal jurisdiction alone shall be enforced.

 

 

Article L626-7

 

I. – Legal persons may be found criminally responsible in accordance with Article 121-2 of the Penal Code for the offences for which provision is made in Articles L. 626-3 and L. 626-4.

II. – The sanctions imposed on legal persons shall be as follows:

1.  A fine in accordance with Article 131-38 of the Penal Code.

2.  The punishments referred to in Article 131-39 of the Penal Code.

III. – The prohibition referred to in Article 131-39 (2) of the Penal Code shall apply to the activity in or during the exercise of which the offence was committed.

 

 

Section 2: Other offences

 

Article L626-8

 

A sentence of two years' imprisonment and a fine of 200,000 francs shall be passed on:

1.  Any trader, any person entered in the trades register, any farmer or any paid or unpaid de jure or de facto director of a legal person who consents to a mortgage or a charge during the period of observation, who concludes a deed of disposal without the authorisation for which provision is made in Article L. 621-24 or who pays all or part of a debt which accrued before the decision to institute proceedings.

2.  Any trader, any person entered in the trades register, any farmer or any paid or unpaid de jure or de facto director of a legal person who effects a payment in violation of the liability payment schedule for which provision is made in the plan to continue trading or who concludes a deed of disposal without the authorisation for which provision is made in Article L. 621-72.

3.  Any person who, knowing the debtor's circumstances, concludes one of the deeds referred to in nos. 1 or 2 above with the debtor or receives irregular payment from the debtor during the period of observation or the execution of the plan to continue trading.

 

 

Article L626-9

 

The punishments for which provision is made in Articles L. 626-3 to L. 626-5 shall be imposed on:

1.  Any person who removes, receives or hides all or part of the assets, chattels or real property belonging to the persons referred to in Article L. 626-1, in their interest, none of which shall prejudice the application of Article 121-7 of the Penal Code.

2.  Any person who fraudulently declares fictitious claims during an administrative order or winding-up proceedings either in his own name or through an intermediary.

3.  Any person acting as a trader, artisan or farmer, either in his own name or under an assumed name, who is guilty of one of the acts for which provision is made in Article L. 626-14.

 

 

Article L626-10

 

Spouses, descendants, ascendants, collaterals or partners of the persons referred to in Article L. 626-1 who embezzle, misappropriate or receive bills backed by the assets of a debtor subject to an administrative order shall be sentenced to the punishment for which provision is made in Article 314-1 of the Penal Code.

 

 

Article L626-11

 

In the cases for which provision is made in the preceding Articles, the court referred to shall rule, even in the event of acquittal:

1.  ex officio on the reintegration into the debtor's estate of any assets, rights or shares fraudulently removed and

2.  on any damages sought.

 

 

Article L626-12

 

1. – Any, creditors' representative, liquidator or commissioner in charge of executing the plan who:

1.  willingly damages the interests of the creditors or the debtor either by using the sums received in the performance of his duties for his own profit or by arranging for benefits to be allocated to him which he knows were not due;

2.  uses the powers at his disposal in his own interest, to the detriment of the interests of the creditors or the debtor,

shall be sentenced to the punishment for which provision is made in Article 314-2 of the Penal Code.

II. – Any administrator, creditors' representative, liquidator, commissioner in charge of executing the plan or other person, with the exception of the controllers and salaried employees' representatives who, having taken part in some capacity in the proceedings, directly or indirectly acquire the debtor's assets on their own account or use them for their own profit shall be liable to the same punishment.  The court referred to shall declare the acquisition null and void and shall rule on any damages sought.

 

 

Article L626-13

 

Any creditor who concludes an agreement which includes a specific benefit at the debtor's expense once the judgment instituting an administrative order or winding-up proceedings have been passed, shall be liable to the punishment for which provision is made in Article 314-1 of the Penal Code.

The court referred to shall declare the said agreement null and void.

 

 

Article L626-14

 

Any person referred to in Article L. 626-1 (2) and (3) who, in bad faith, removes or conceals or attempts to remove or conceal all or some of the assets of a legal person subject to a judgment instituting an administrative order or winding-up proceedings with a view to preventing the legal person or the partners or creditors thereof from recovering all or some of their assets or fraudulently having themselves listed as debtors for sums not owing to them shall be liable to the punishment for which provision is made in Articles L. 626-3 to L. 626-5.

 

 

Section 3: Procedural rules

 

Article L626-15

 

For the purpose of the provisions of sections 1 and 2 of this chapter, the period of limitation for prosecution shall only commence on the date of the judgment instituting the administrative order procedure if the deeds incriminated emerged before that date.

 

 

Article L626-16

 

Recourse shall be taken to the criminal jurisdiction either at the instigation of the ministère public or if the administrator, the creditors' representative, the salaried employees' representative, the commissioner in charge of executing the plan or the liquidator files for damages.

 

 

Article L626-17

 

The ministère public may require the administrator or liquidator to hand over all deeds and documents in their possession.

 

 

Article L626-18

 

The expenses of proceedings instituted by the administrator, the creditors' representative, the salaried employees' representative, the commissioner in charge of executing the plan or the liquidator shall be borne by the Treasury in the event of an acquittal.

In the event of a conviction, the Treasury may only take recourse against the debtor once winding-up proceedings have been completed.

 

 

Article L626-19

 

Judgments and convictions returned in application of this chapter shall be published at the offender's expense.

 

 

Chapter VII: Common provisions

 

Article L627-1

 

No manner of objection to or enforcement proceedings on sums paid to the Consignments office shall be admissible.

 

 

Article L627-2

 

The court-appointed receiver shall be entitled to reimbursement of his travelling expenses from the debtor's assets.

 

 

Article L627-3

 

I. – Where the debtor has insufficient liquid assets for immediate purposes, the Treasury shall advance expenses and expenses on the instructions of the court-appointed receiver or the president of the court, including service and publication expenses in connection with:

1.  Decisions made during the course of an administrative order or winding-up proceedings in the collective interest of the creditors or the debtor.

2.  Proceedings instituted in order to protect or restore the debtor's assets or in the collective interest of the creditors.

3.  Proceedings instituted in accordance with Articles L. 625-3 to L. 625-6.

II. – The Treasury shall also advance expenses and expenses on the instructions of the president of the court, including service and publication expenses in connection with proceedings instituted to cancel or amend the plan.

III. – These provisions shall also apply to appeals against any of the decisions referred to above, including to the Supreme Court.

IV. – Reimbursement of Treasury advances shall be guaranteed by the preferential right of court expenses.

 

 

Article L627-4

 

Any person who exercises a professional activity or office in violation of a prohibition, forfeiture or legal incapacity in accordance with Articles L. 625-2 and L. 625-8 shall be sentenced to two years' imprisonment and a fine of 2,500,000 francs.

 

 

Article L627-5

 

Plans by the administrator, employer or liquidator, as applicable, to dismiss the salaried employee's representative referred to in Articles L. 621-8, L. 621-135 and L. 622-2 shall be referred to the works council, which shall give its opinion on the planned dismissal.

The redundancy shall be subject to the consent of the health and safety inspector responsible for the establishment.  Where there is no works council in the establishment, the health and safety inspector shall be addressed directly.

However, in the event of serious misconduct, the administrator, the employer or the liquidator, as applicable, may dismiss the interested party immediately pending a final decision.  If the redundancy is refused, the dismissal shall be reversed and its consequences suppressed ipso jure.

The protection afforded the salaried employees' representative in the exercise of his duties in accordance with Article L. 621-36 shall cease once the creditors' representative has repaid all the sums paid to him by the institutions referred to in Article L. 143-11-4 of the Employment Code to the salaried employees, in application of the tenth sub-paragraph of Article L. 143-11-7 of the said Code.

Where the salaried employees' representative performs the duties of the works council or, where this is none, of the staff delegates in application of Article L. 621-135, protection shall cease at the end of the final hearing or consultation for which provision is made in the administrative order procedure.

 

 

Chapter VIII: Provisions applicable to the departments of Haut-Rhin, Bas-Rhin and Moselle

 

Article L628-1

 

 (Law No 2003-7 of 3 January 2003 Article 50 (II) Official Gazette of 4 January 2003)

 

(Law No 2003-710 of 1 August 2003 Article 37 Official Gazette of 2 August 2003)

 

The provisions of the present Title apply to natural persons domiciled in the Departments of Haut-Rhin, Bas-Rhin and Moselle, and to their successors, who are neither shopkeepers nor persons listed in the trade register, and are not farmers, if they have acted in good faith but are manifestly insolvent.

Before a decision to initiate proceedings is taken, the court shall, if it considers it appropriate, appoint a competent person whose name appears on the list of approved professionals to gather full information regarding the debtor's financial and social position.

The forfeitures and prohibitions which result from personal bankruptcy do not apply to such persons.

The present Article's terms of implementation are determined by decree.

 

 

Article L628-2

 

 (Law No 2003-710 of 1 August 2003 Article 39 Official Gazette of 2 August 2003)

 

(Law No 2003-710 of 1 August 2003 Article 39 Official Gazette of 2 August 2003)

 

Unless the insolvency judge grants an exemption, an inventory shall be made of the property of the persons referred to in Article L. 628-1.

 

 

Article L628-3

 

(Law No 2003-710 of 1 August 2003 Article 38 (I) Official Gazette of 2 August 2003)

 

(Law No 2003-710 of 1 August 2003 Article 39 Official Gazette of 2 August 2003)

 

Contrary to Article L. 621-102, no verification of debts is carried out in connection with compulsory liquidation if it appears that the proceeds from realisation of the assets would be entirely consumed by the legal costs, unless the insolvency judge decides otherwise

 

Article L628-4

 

 (Law No 2003-710 of 1 August 2003 Article 40 Official Gazette of 2 August 2003)

 

When the compulsory liquidation operations have been completed, the court may, in exceptional cases, compel the debtor to make a regular contribution towards settlement of the liabilities in the amount that it determines. In such judgments, the court appoints a commissioner to oversee execution of that obligation.

In determining the level of the contribution, the court takes the debtor's ability to pay into account in the light of his resources and his fixed expenses. The court shall reduce the level of the contribution if the debtor's resources decrease or his expenses increase.

Payment thereof must be completed within two years.

The present Article's terms of implementation are determined by decree.

 

 

Article L628-5

 

 (Law No 2003-710 of 1 August 2003 Article 41 Official Gazette of 2 August 2003)

 

In addition to the cases referred to in Article L. 622-32, the creditors also recover their right to bring an individual action against the debtor when the court, at its own initiative or at the behest of the insolvency judge, pronounces non-fulfilment of the obligation referred to in Article L. 628.4.

 

 

Article L628-6

 

 (Law No 2003-710 of 1 August 2003 Article 42 Official Gazette of 2 August 2003)

 

Details of the judgment ordering compulsory liquidation remain in the file referred to in Article L. 333-4 of the Consumer Code for a period of eight years and are no longer entered in the debtor's police record.

 

 

Article L628-7

 

 (Law No 2003-710 of 1 August 2003 Article 38 (I) Official Gazette of 2 August 2003)

 

The basis of assessment and the payment arrangements for the tax on legal expenses in cases of insolvency or compulsory liquidation are provisionally determined pursuant to the provisions of the local laws.

 

 

Article L628-8

 

 (Law No 2003-710 of 1 August 2003 Article 38 (I) Official Gazette of 2 August 2003)

 

The provisions of Article 1 of Law No. 75-1256 of 27 December 1975 relating to certain real-property sales in the Departments of Haut-Rhin, Bas-Rhin and Moselle cease to be applicable to the forced sale of real property included in the assets of a debtor who has been the subject of administration proceedings brought subsequent to 1 January 1986.

 

 

BOOK VII

Organisation of commerce

 

TITLE I

Chambers of commerce and industry

 

 

Chapter I: Organisation and powers

 

Article L711-1

 

Chambers of commerce and industry are agencies which work closely with the public authorities to serve commercial and industrial interests in their district.

They are public economic establishments.

 

 

Article L711-2

 

Chambers of commerce and industry are responsible for:

1.  Giving the government the opinions and information requested from them on industrial and commercial matters.

2.  Presenting their views on how to increase the prosperity of industry and commerce.

3.  Ensuring, subject to the authorisation for which provision is made in Articles L. 711-6 and L. 711-8, that the works and the administration of the services necessary to the interests for which they are responsible are carried out.

 

 

Article L711-3

 

The opinion of chambers of commerce shall be requested on:

1.  Regulations relating to commercial practice.

2.  The creation of new chambers of commerce and industry, marine brokers, tribunaux de commerce, conseils de prud'hommes, bonded warehouses and auction rooms for new and wholesale merchandise in their district

3.  Taxes to remunerate transport services franchised by the public authorities in their district.

4.  Any matters regulated by law or special regulations, especially the advisability of public works to be carried out in their district and the taxes and tolls to be levied in order to meet the cost of such works.

5.  Labour tariffs for work in prisons.

 

 

Article L711-4

 

In addition to opinions which the government is always entitled to ask of them, chambers of commerce and industry may issue opinions at their own initiative on:

1.  Planned changes to commercial, customs and economic legislation.

2.  Customs tariffs.

3.  Tariffs and regulations for transport services franchised by the public authorities outside their jurisdiction but affecting their district.

4.  Tariffs and regulations for commercial establishments opened in their district under an administrative permit.

 

 

Article L711-5

 

Articles L. 121-4 to L. 121-6 of the Town Planning Code reproduced below define the powers of chambers of commerce and industry to establish master plans for locating commercial and artisan installations.

"Article L. 121-4. – Once professional bodies have been consulted, chambers of commerce and industry and the trade chambers shall be involved, if they so request, in establishing master plans.

The reports attached to master plans shall stipulate the projected size of and location for preferred zones for locating various commercial and artisan installations.

Article L. 121-5. – The economic studies needed in order to prepare documents on the planned commercial and artisan infrastructure may be carried out at the initiative of chambers of commerce and industry and trade chambers.

"Article L. 121-6. – Chambers of commerce and industry and trade chambers shall be involved, if they so request, in drawing up land use plans for commercial and artisan installations and shall be responsible for links with the professional associations affected."

 

 

Article L711-6

 

Chambers of commerce and industry may be authorised to found and administer establishments for commercial use such as bonded warehouses, auction rooms, depots, weapon testing grounds, packaging and titration offices, permanent exhibitions and commercial museums, business schools, vocational schools and courses in commercial and industrial subjects.

The administration of such establishments founded by private initiative may be handed over to chambers of commerce and industry at the request of the subscribers or donors.

The administration of similar establishments created by the state, the department or the municipality may be delegated to them for similar establishments created by the state, the department or the municipality.

The authorisation referred to in this Article shall be granted to chambers of commerce and industry by decision of the minister in charge of their administrative supervision unless the nature of the establishment is such that a decree or law is needed.

Regulations and maximum tariffs shall be approved by the minister subject to the same reservation.  The actual taxes and prices payable shall be approved by the prefect, unless the deed of institution requires a ministerial decision.

Chambers of commerce and industry may acquire or construct buildings for their own premises or premises for commercial establishments subject to ministerial authorisation.

 

 

Article L711-7

 

Chambers of commerce and industry and trade chambers may create training funds for traders and artisans as defined in and for the purposes of Article L. 961-10 of the Employment Code, in liaison with professional associations.

 

 

Article L711-8

 

Chambers of commerce and industry may be appointed as franchisees of public works or to take charge of public services.

 

 

Article L711-9

 

Chambers of commerce and industry or trade chambers may act as town planning project managers in agreement with the local authority or the project agency in order to install any form of new commercial and artisan installation in the economic and social interest, for the benefit of traders and artisans and to help them set up, convert or relocate their business.

More importantly, they may help traders and artisans acquire ownership [illegible] premises without any initial capital contribution.

They may also be delegated a pre-emptive town planning right or hold or be delegated the pre-emptive right established in deferred planning zones in order to set up any form of commercial and artisan installation.

Loans contracted by chambers of commerce and industry and trade chambers in order to carry out the operations referred to above may be guaranteed by the local authority.  Chambers of commerce and industry, trade chambers and their permanent assemblies may contract loans from the Consignments office and the local authority facility aid fund.

 

 

Article L711-10

 

 (Law No 2003-7 of 3 January 2003 Article 50 (II) Official Gazette of 4 January 2003)

 

The chambers of commerce and industry are reorganised as regional chambers of commerce and industry. Without prejudice to the right, which the chambers of commerce and industry retain, to form groups in order to defend special interests which some of them have in common, the regional chambers of commerce and industry constitute the consultative bodies for the regional interests of commerce and industry in their dealings with the public authorities.

The regional chambers of commerce and industry are public institutions with legal personality.

The regrouping of the chambers of commerce and industry into regional chambers of commerce and industry, and the remits, organisation and administrative and financial workings of those regional chambers of commerce and industry are determined in a Conseil d'Etat decree.

 

 

Chapter II: Financial administration

 

Article L712-1

 

The ordinary expenses of chambers of commerce and industry shall be covered by a tax in addition to the business tax.

 

 

Article L712-2

 

Chambers of commerce and industry may allocate all or some of their surplus revenue from the management of their ordinary services to a reserve fund for emergency or contingent expenses.  The amount contained in this fund, which must be reported in the services accounts and budget, shall not under any circumstances exceed half the total annual resources of the said budget.

 

 

Article L712-3

 

The chambers of commerce and industry referred to in Article L. 711-1, the regional chambers of commerce and industry, cross-trade groups and the assembly of the French chambers of commerce and industry shall appoint at least one auditor and one deputy from the list referred to in Article L. 225-219, who shall perform their duties in accordance with the terms of Book II, subject to the regulations applicable to them.

The provisions of Article L. 242-27 shall apply to them.

The sanctions for which provision is made in Article L. 242-8 shall apply to directors who fail to draw up a balance sheet, income statement and notes to the accounts every year.  The provisions of Articles L. 242-25 and L. 242-28 shall likewise apply to them.

 

 

Chapter III: Election of members of the chambers of commerce and industry and trade representatives

 

Article L713-1

 

I. – The members of chambers of commerce and industry shall be elected for six years; half the members may be re-elected every three years.

II. - The following persons are eligible to vote in elections to a chamber of commerce and industry:

1.  In person:

a)  traders entered in the commercial and companies register in the district of the chamber of commerce and industry;

b)  the heads of undertakings entered in the district trades and commercial and companies registers who have not asked to be deleted from the electoral rolls of the chambers of commerce and industry;

c)  spouses of the natural persons referred to under a) or b) above who have stated in the commercial and companies register that they assist their spouses in the business free of charge and exercise no other professional activity;

d)  long-haul captains or captains in the merchant marine commanding a ship registered in France, the home port of which is located in the district, inshore pilots performing their duties in a port located in the district and civil aviation pilots domiciled in the district who command an aircraft registered in France;

e)  members in office and former members of the tribunaux de commerce and chambers of commerce and industry who have lost their voting rights by reason of their profession but who have requested nonetheless that their names be retained on the electoral roll.

2.  By proxy:

a)   public limited companies, limited liability companies and public commercial or industrial establishments registered in the district;

b)  the natural persons referred to under 1 a) or b) above, the legal persons referred to under 2 a), partnerships and private firms with an establishment in the district which has been registered as an additional or secondary entry, unless they are exempt from the need to do so by current laws and regulations.

 

 

Article L713-2

 

I. – By reason of their registered offices and all their establishments located in the district of the chamber of commerce and industry, the natural persons or legal persons referred to in Article L. 713-1 (1) and (2) shall have:

1.  One additional representative if they employ between ten and forty-nine salaried employees in the district of the chamber of commerce and industry.

2.  Two additional representatives if they employ between fifty and one hundred and ninety-nine salaried employees in the district.

3.  Three additional representatives if they employ between two hundred and four hundred and ninety-nine salaried employees in the district.

4.  Four additional representatives if they employee between five hundred and one thousand nine hundred and ninety-nine salaried employees in the district.

5.  Five additional representatives if they employee more than two thousand salaried employees in the district.

II. – However, the natural persons referred to in Article [illegible] II (1a) and (1b) [illegible] spouse benefits from the provisions of II (1c) of the said Article shall not appoint an additional representative if they employ fewer than fifty salaried employees in the district of the chamber of commerce and industry.

III. – The number of partners in the partnership or associates in the private firm shall be deducted, if necessary, from the electors which the private firm or partnership could have appointed in application of the provisions of Article L. 713-1 and this Article.

 

 

Article L713-3

 

The representatives referred to in Articles L. 713-1 and L. 713-2 shall perform the duties either of chairman and chief executive officer, administrator, chief executive officer, chairman or member of the management, manager, chairman or member of the board of directors or director of a public commercial or industrial establishment in the undertaking or, if not and in order to represent them as agent, duties involving commercial, technical or administrative management responsibility in the undertaking or establishment.

The personal electors referred to in Article L. 713-1 II (1) and the proxies of the natural persons or legal persons referred to in II (2) of the said Article shall only take part in the ballot if they meet the terms and conditions of Article L. 2 of the Electoral Code and have not been sentenced to one of the punishments, forfeitures or prohibitions for which provision is made in Articles L. 5 and L. 6 of the said Code or in Article L. 625-8 or disqualified from exercising a commercial activity.

 

 

Article L713-4

 

Lay commercial judges shall be elected for three years in the district of each chamber of commerce and industry by an electorate consisting of the electors referred to in Article L. 713-1 II (1) and (2) and the senior staff employed by the said electors in the district who perform duties involving commercial, technical or administrative management responsibilities in the undertaking or establishment.

The persons eligible to vote for lay commercial judges shall only take part in the ballot if they meet the terms and conditions of the second sub-paragraph of Article L. 713-3.

 

 

Article L713-5

 

The electors of lay commercial judges and members of the chambers of commerce and industry shall be divided in each administrative district into three professional categories relating to the commercial, industrial or service sectors.

Electors may, if necessary, be divided within these three categories into professional sub-categories defined on the basis either of the size of undertakings or their specific activities.

 

 

Article L713-6

 

The number of seats for lay commercial judges, which shall be no fewer than sixty and no more than six hundred, shall be determined on the basis of the size of the lay commercial electoral body in the district, the number of members elected from the chamber of commerce and industry and the number of tribunaux de commerce in the district of the said chamber.

The number of seats of a chamber of commerce and industry shall be between twenty-four and thirty-six for chambers of commerce and industry in districts with fewer than 30,000 electors and between thirty-eight and sixty-four for chambers of commerce and industry in districts with 30,000 electors or more.

 

 

Article L713-7

 

Seats shall be divided between professional categories and sub-categories with due account for the basis for assessment of the persons in them, the number of persons in them and the number of [illegible] they employ.

No one professional category may represent more than half the number of seats.

 

 

Article L713-8

 

Electoral rolls shall be drawn up in the district of the tribunal de commerce by a committee chaired by the judge in charge of the commercial and companies register and shall be subject to the requirements of the first sub-paragraph of Article L. 25 and Articles L. 37, L. 34 and L. 35 of the Electoral Code.

 

 

Article L713-9

 

Persons belonging to the electorate as defined in Article L. 713-4 shall be eligible to serve as lay commercial judges.

 

 

Article L713-10

 

The following persons shall be eligible to serve as members of a chamber of commerce and industry, provided that they are over thirty-six years old and meet the terms and conditions of the second sub-paragraph of Article L. 713-3:

1.  Persons registered as personal voters on the electoral roll of the corresponding district, who can prove that they were registered on the electoral roll of the district or on the rolls of several districts in succession for five years immediately preceding the year of the election or that they have been entered on the commercial and companies register for five years or that they have exercised the activities referred to in Article L. 713-1 II (1) for the said period.

2.  Persons registered on the electoral roll of the district as proxies, who can prove that the undertaking which they represent has been trading for five years.

3.  Members in office and former members of the chamber of commerce and industry registered on the electoral roll of the district pursuant to Article L. 713-1 II (1), provided that they are not exercising a liberal profession or salaried activity when they submit their candidature.

 

 

Article L713-11

 

Electors shall each have as many votes as they qualify for in application of Article L. 713-1 in order to elect members of the chambers of commerce and industry.

Electors shall each have one vote in order to elect lay commercial judges.

The right to vote in elections for members of chambers of commerce and industry and lay commercial judges may be exercised by proxy or by postal ballot in accordance with the terms and conditions set out by decree of the Conseil d'Etat.  Each elector may only have one proxy.

 

 

Article L713-12

 

Lay commercial judges and members of chambers of commerce and industry shall be elected in one round using one-name ballot papers.  If several candidates obtain the same number of votes, the eldest shall be declared to have been elected.

 

 

Article L713-13

 

Elections for lay commercial judges and members of chambers of commerce and industry shall be arranged by the prefect in accordance with the requirements of Articles L. 49, [illegible], L. 58 to L. 67 and L. 86 to L. 117-1 of the Electoral Code.

A committee chaired by the prefect or his deputy shall be responsible for ensuring that the election is held properly and declaring the results.

Objections to the election of lay commercial judges and members of chambers of commerce and industry shall be filed with the administrative court as for municipal elections.

 

 

Article L713-14

 

No-one may be a lay commercial judge and a member of a chamber of commerce and industry at the same time.

 

 

Article L713-15

 

The Conseil d'Etat shall issue a decree stipulating how Articles L. 713-1 to L. 713-13 are to be applied.  This decree shall stipulate how the seats for lay commercial judges and members of the chamber of commerce and industry are divided between the professional categories and sub-categories.

 

 

TITLE II: Commercial facilities

 

Article L720-1

 

Sites and extensions for and relocation and diversification by commercial and artisan undertakings must comply with town and country planning, environmental protection and city planning requirements.  More importantly, they must help to maintain activities in rural and mountain areas and redress the balance in towns by developing activities in town centres and urban generation areas.

They must also help to modernise commercial facilities, adapt them to consumer trends and new marketing techniques, improve shopping convenience and improve the conditions of work of salaried employees.

 

 

Article L720-2

 

The authorities shall facilitate groupings of commercial and artisan undertakings and new common services which allow them to enhance their productivity and competitiveness and, possibly, to provide their customers with additional services.

 

 

Article L720-3

 

I. – A departmental commercial facilities committee shall rule on applications for permits filed with it pursuant to Articles L. 720-5 and L. 720-6.

II. – The committee shall rule in accordance with the principles set out in Articles L. 720-1 and L. 720-2, taking account of:

1.  The overall supply and demand for each sector of activity in the catchment area in question.

2.  The density of installations on average and large surface areas within the catchment area.

3.  The potential effect of the project on commercial and artisan installations in the catchment area and towns in question and on the target balance between the various trades.

4.  Any impact of the project on salaried and non-salaried jobs.

5.  How competition operates within commercial and artisan trades.

6.  Undertakings by applicants wishing to open mainly food retail outlets to open similar outlets in urban generation areas or priority rural development areas with a sales surface of less than 300 square metres for at least 10% of the surfaces requested.

III. – Decisions by the departmental committee shall refer to works by the departmental commercial facilities monitoring centre.

IV. – The departmental commercial facilities monitoring centre shall collate the information needed in order to draw up commercial development plans in accordance with the guidelines set out in Article 720-1.  Where necessary, it shall take account of the guidelines set out in the town and country planning directives referred to in Article L. 111-1-1 of the Town Planning Code and the regional planning and territorial development plans for which provision is made in Article 34 of Law No 83-8 of 7 January 1983 on the division of responsibilities between the municipalities, departments, regions and state.

V. – Commercial development plans shall be drawn up and publicised as stipulated by decree of the Conseil d'Etat.

VI. – In addition, where the planned operation relates to a town in which the procedures for which provision is made in Articles L. 303-1 of the Construction and Housing Code and L. 123-11 of the Town Planning Code have been applied, the committee shall take account of action intended to ensure that local shops, artisans or artisan activities are maintained or sited there.

VII. – Plans shall only be brought before the committee for examination if accompanied by an indication of the shop sign to be used by future operator(s) of establishments with a sales surface greater than or equal to a threshold set by decree.

VIII. – Applications to open a retail outlet or a shopping centre as defined in Article L. 720-6 with a sales surface of more than 6,000 square metres shall be accompanied by the conclusions of a public inquiry into the economic, social and town and country planning implications of the project, to be carried out as decreed by the Conseil d'Etat.  This inquiry shall be carried out at the same time as the public inquiry for which provision is made in application of Article 1 of Law No 83-630 of 12 July 1983 on more democratic inquiries and environmental protection where such protection is required under the planning permission procedure.

 

NB – Until such time as the law ratifying the new Commercial Code is passed, it will not be possible to make the amendments to Article 28 of Law No 73-1193 of 27 December 1973, on which this Article L. 720-3 of the Commercial Code is based, for which provision is made in Article 97 of Law No 2000-1208 on urban solidarity and regeneration, as published in the Official Gazette of the French Republic on 14 December 2000.

"Article 97: The following three sub-paragraphs have been inserted after the third sub-paragraph of Article 28 of Law No 73-1193 of 27 December 1973 on guidelines for commercial and artisan activities:

-  the overall impact of the project on traffic of private cars and delivery vans;

-  access by public transport or alternative modes of transport;

-  the space available for loading and unloading goods.

 

 

Article L720-4

 

 (Law No 2003-660 of 21 July 2003 Article 56 Official Gazette of 22 July 2003)

 

In the overseas departments, unless a founded derogation from the Departmental Equipment Commission stipulates otherwise, the authorisation requested cannot be granted when it appears that it would have the effect of taking the total selling space of primarily food retailing outlets with a selling space greater than 300 square metres beyond a threshold of 25% for ‍the department as a whole, or of increasing it if it is already above that threshold, whether this involves the plan as a whole or only a part thereof, when that space:

1. Belongs to a single trading group;

2. Belongs a single company, or to one of its subsidiaries, or to a company in which that company has an equity participation of between 10% and 15%, or a company controlled by that single company within the meaning of Article L. 233-3;

3. Is controlled directly or indirectly by at least one partner which exerts an influence on it within the meaning of Article L. 233-16, or has a common manager in law or in fact.

 

 

Article L720-5

 

I. – A business licence shall be required for projects to:

1.  Open a retail outlet with a sales surface of over 300 square metres in a new or converted building.

2.  Extend the sales surface of a retail outlet which has already reached the 300 square metre threshold or will exceed it once the project has been completed, whereby an extension shall be understood to mean any covered or exposed, fixed or movable space not governed by Article L. 310-2.

3.  Open or extend a shopping centre, as defined in Article L. 760-6, with a sales surface of over 300 square metres or which will exceed this threshold once the project has been completed.

4.  Open or extend any retail fuel outlet, irrespective of the size of the sales surface, attached to a retail outlet as referred to in [illegible] or a shopping centre as referred to under no. 3 above, which is not located not on a public motorway or expressway.

5.  Re-establish a sales surface of over 300 square metres freed under a licence to open an outlet by relocating existing activities as a retail outlet, irrespective of the date on which the relocation was authorised.

6.  Re-open a retail outlet with a sales surface of over 300 square metres to the public on premises which have not been used for two years commencing, in the event of an administrative order of the retailer, on the date on which the owner regained full and complete possession of the premises.

7.  New buildings or extensions to or conversions of existing buildings involving the construction of hotels with more than thirty rooms outside the region of Ile-de-France or fifty rooms in Ile-de-France.

The departmental commercial facilities committee shall obtain the opinion of the departmental tourism committee, to be presented by the regional tourism officer attending the meeting, before ruling on these applications.  In addition to the criteria for which provision is made in Article L. 720-3, it shall take account of the density of hotel facilities in the area in question in its ruling.

8.  Any diversification by an outlet with a sales surface of over 2,000 square metres shall likewise be subject to the business licence for which provision is made in this Article.  This threshold shall be reduced to 300 square metres where the new business of the outlet is mainly food.

II. – No business permit shall be required in order to group sales surfaces of no more than 1,000 square metres, or 300 square metres if the new activity is mainly food, in neighbouring outlets without creating any additional sales surface

III. – Pharmacies shall not require a business licence and need not be taken into account for the purpose of I (3) above.

IV. – Retail food and other markets set up in outbuildings of public property allocated to railway stations with a maximum surface area of 1,000 metres shall not require a business licence, irrespective of whether or not they are covered.

V. – No business licence shall be required in order to open or extend garages or car showrooms with a maintenance and repair workshop, provided that the resultant surface area is less than 1,000 square metres.

VI. – A business licence must be obtained before any planning permission required or before the project is carried out, if no planning permission is required.

The licence shall be granted per square metre of sales surface or room.

A new application shall be made if the type of business or sales surface is substantially modified during the course of processing or construction.  The same shall apply if the shop sign(s) designated by the applicant are modified.

The advance licence required in order to open new retail outlets shall be neither assignable nor transferable.

VII. – The provisions of II (7) shall not apply to overseas departments.

 

 

Article L720-6

 

I. – Outlets on the same site:

1.  which were designed during the same development project, irrespective of whether it was completed in one or more stages;

2.  which have arrangements allowing the same customers to access various establishments;

3.  certain operating elements of which are jointly managed, mainly by creating collective services or using joint standard practices or advertising;

4.  which are linked by a common legal structure directly [illegible] controlled by at least one partner exercising an influence on it as defined in Article L. 233-16 or with a joint de jure or de facto director,

shall be deemed to form part of the same shopping centre, irrespective of whether or not they are housed in separate buildings or owned or operated by the same person.

II. – However, the provisions of this Article shall not apply to joint development areas created in a town centre under Article L. 311-1 of the Town Planning Code.

 

 

Article L720-7

 

Subject to specific provisions applicable to territorial authorities and local mixed economy companies, all contracts concluded by public or private persons for the purpose of a project authorised under Articles L. 720-5 and L. 720-6 shall be notified by each contracting party to the prefect and the tribunal de grande instance of auditors, as stipulated by decree.

This obligation shall also apply to contracts which predate the licence, governing the control or development of the land on which the licensed establishments are located.  It shall apply to all types of contract, including contracts making provision for assignments free of charge, services in kind and intangible considerations.

The said notification shall be effected within two months of signature of the contract or, if the contract predates the licence, within two months of the licence.

Any person who infringes the provisions of this Article shall be liable to a fine of 100,000 francs.

 

Article L720-8

 

I. – The departmental commercial facilities committee shall be chaired by the prefect who, without taking part in the vote, shall report to the committee on the content of the national programme for which provision is made in Article 720-1 and on the commercial development plans referred to in Article L. 720-3.

II. – In departments other than Paris it shall consist of:

1.  The following three elected persons:

a)  the mayor of the municipality in which the site is located;

b)  the chairman of the public inter-municipal cooperation establishment responsible for space planning and development to which the municipality in which the site is located belongs or, where there is none, the general councillor of the canton in which the site is located;

c)  the mayor of the most densely populated municipality in the district other than the municipality in which the site is located; with the exception of the departments of Hauts-de-Seine, Seine-Saint-Denis, Val-de-Marne and the municipalities of Essonne, Val-d'Oise, Yvelines and Seine-et-Marne, which belong to Greater Paris, if the municipality in which the site is located belongs to a town comprising at least five municipalities, the mayor of the most densely populated municipality shall be chosen from the mayors of the municipalities of the said town.

2.  The following three persons:

a)  the chairman of the chamber of commerce and industry whose district includes the municipality in which the site is located, or his deputy;

b)  the chairman of the chamber of trades whose district includes the municipality in which the site is located, or his deputy;

c)  a representative of the consumer association in the department.

Where the mayor of the municipality in which the site is located or the mayor of the most densely populated municipality referred to above is also the general councillor of the canton, the prefect shall appoint the mayor of one of the municipalities in the town or district in question to replace him.

III. – In Paris it shall consist of:

1.  The following three elected persons:

a)  the mayor of Paris;

b)  the mayor of the district in which the site is located;

c)  a district councillor appointed by the Paris council.

2.  The following three persons:

a)  the chairman of the Paris chamber of commerce and industry or his deputy;

b)  the chairman of the Paris chamber of trades or his deputy;

c)  a representative of the consumer associations in the department.

IV. – Every member of the departmental commercial facilities committee shall notify the prefect of their financial interests and business functions.

Members of the committee may not vote on projects in which they have a direct personal interest or if they represent or have represented one of the interested parties.

V. - The heads of decentralised government departments in charge of installations, competition, consumer affairs and employment shall attend committee meetings.

VI. - In the region of Ile-de-France, the representative of the prefect of the region shall also attend committee meetings.

Applications for licences shall be processed by the decentralised government departments.

VII. - Applications for licences shall be filed as stipulated by decree of the Conseil d'Etat.  Applications resulting in sales surfaces of no more than 1,000 square metres shall be subject to a simplified procedure.

VIII. - Members of the committee shall be appointed and shall serve in office as stipulated by decree of the Conseil d'Etat.

 

 

Article L720-9

 

 

The departmental commercial facilities committee shall authorise projects for which four members have voted in favour using the procedure set by decree.  The minutes shall record how each member voted.

 

 

Article L720-10

 

The departmental commercial facilities committee shall rule on the applications for licences referred to in Article L. 720-5 within four months of the date on which the application was filed and its decisions shall be reasoned mainly with reference to the provisions of Articles L. 720-1 and L. 720-3.  The licence shall be deemed to have been granted on expiration of this deadline.  Members of the committee shall be given at least one month's notice of applications before ruling on them.

The decision of the departmental committee may be referred for appeal to the national commercial facilities committee for which provision is made in Article L. 720-11 within two months of notification, at the initiative of the prefect, two members of the committee, one of whom shall be elected, or the applicant.  The national commercial facilities committee shall rule on the appeal within four months.

The committees shall authorise or reject projects in their entirety.

Planning permission shall not be granted, building work shall not commence and no new application shall be filed for the same property with the departmental commercial facilities committee before the deadline for appeal expires or, in the event of an appeal, before the decision at appeal is returned by the national committee.

If the application for a licence is rejected on substantive grounds by the aforementioned national committee, no new application may be filed by the same applicant, for the same project or for the same land for a period of one year from the date of the ruling by the national committee.

 

 

Article L720-11

 

 

I. - The national commercial facilities committee shall consist of eight members appointed by decree for single term of office of six years at the proposal of the minister for trade.  Half the committee may be reappointed every three years.

II. - The committee shall consist of:

1.  A member of the Conseil d'Etat appointed by the vice-president of the Conseil d'Etat, who shall act as chairman.

2.  A member of the court of auditors appointed by the first president of the court of auditors.

3.  A member of the tax inspectorate appointed by the chief tax inspector.

4.  A general inspector appointed by the vice chairman of the general council of bridges and roads.

5.  Four persons appointed for their knowledge of distribution, consumer affairs, town and country planning or employment, to be appointed (one each) by the president of the national assembly, the president of the Senate, the minister for trade and the minister for employment.

II. - In the event of a tied vote, the chairman of the committee shall have the casting vote.

III. - The members of the committee shall notify the chairman of their financial interests and business functions.

IV. - Members of the committee may not vote on projects in which they have a direct personal interest or if they represent or have represented one of the interested parties.

V. - The mayor of the municipality in which the site is located and who sits on the departmental committee against whose decision an appeal has been filed shall be heard by the national committee if he so requests.

VI. - A government commissioner appointed by the minister for trade shall attend committee meetings and be given a copy of the files.

VII. - The members and chairman of the committee shall be appointed and shall serve as stipulated by decree of the Conseil d'Etat.

 

 

 

TITLE III: National interest markets

 

Article L730-1

 

Markets of agricultural and food produce shall be classified as national interest markets or shall be created by decree of the Conseil d'Etat following consultation with the local authorities or, where applicable, groupings of authorities and the chambers of commerce and industry and agricultural chambers affected.

 

 

Article L730-2

 

National interest markets may be managed on behalf of the state by a local authority or grouping of local authorities, by a mixed economy company or by any other legal person incorporated for the purpose by decree of the Conseil d'Etat.

 

 

Article L730-3

 

The tariff of fees collected from market licence holders shall be established by the manager and approved by the prefect.

The market manager shall submit a projected income statement which guarantees financial equilibrium.

Where the market is in serious deficit or a serious deficit is projected, the ministers in charge may, having consulted the manager and, if applicable, the public authorities which guaranteed the loans, increase existing fees ex officio, generate new income, reduce expenses and, in general terms, take any measures conducive to restoring financial equilibrium.

 

 

Article L730-4

 

A protective perimeter may be set up around national interest markets in accordance with the procedure for which provision is made in Article L. 730-1.

The protective perimeter shall include the bans for which provision is made in Article L. 730-5.  The bans for which provision is made in Article L. 730-6 may also be applied to all or one or more parts of this perimeter.

The bans for which provision is made in Article L. 730-5 and L. 730-6 shall apply to sales of and ancillary transactions pertaining to the products listed in each case by decree of the ministers in charge.  The lists of products subject to the bans referred to in Article L. 730-5 may be more extensive than the lists of products subject to the bans referred to in Article 730-6.

 

 

Article L730-5

 

The decree setting up the protective perimeter shall prohibit any establishment in which a legal person or natural person effects non-retail sales of or ancillary transactions pertaining to the products listed by joint ministerial decree in accordance with Article L. 730-4 from being extended, moved or opened within the perimeter.

This ban shall not apply to producers or groups of producers for products from shares located within the protective perimeter.

Changes of ownership of goodwill shall not qualify as opening an establishment.

Extending an establishment shall be understood to mean either creating new activities or extending commercial premises.

The terms of application of this Article shall be stipulated by decree of the Conseil d'Etat.

 

Article L730-6

 

The decree establishing the protective perimeter may prohibit activities by any natural person or legal person involving non-retail sales of or ancillary transactions pertaining to products listed by joint ministerial decree in accordance with Article L. 730-4 in all or one or more parts of the territory which it encompasses.

This ban shall enter into force on the date stipulated by the decree referred to in the preceding sub-paragraph, irrespective of the state of progress reached in compensation proceedings on the said date.

This ban shall not apply to producers or groups of producers for products from shares located within the zone(s) affected by the aforementioned ban.

The terms of application of this Article shall be stipulated by decree of the Conseil d'Etat.

 

 

Article L730-7

 

Where the perimeter protecting a market of national interest encompasses the precinct of a port, non-retail sales of products listed in accordance with Article L. 730-4 shall comply with the following provisions within the port precinct:

The bans for which provision is made in Articles L. 730-5 and L. 730-6 shall not apply to sales of products shipped directly by sea to or from the port in batches which exceed the size limits set by joint order of the ministers for national interest markets and the minister for ports.

The decree establishing the protective perimeter may ban sales on importation within the port precinct of products shipped other than by sea or may authorise sales solely for batches of a size in excess of certain limits, subject to terms set in the decree.

 

 

Article L730-8

 

By way of exception, the ministers in charge may grant exemptions from the bans for which provision is made in Articles L. 730-5 to L. 730-7 subject to terms laid down by decree of the Conseil d'Etat.

However, an exemption from the ban described in Article L. 730-6 may only be granted for ancillary transactions.

Persons exempted from the bans described in Article L. 730-5 may not claim compensation if the activity exercised pursuant to the said exemption is subsequently subject to the ban described in Article L. 730-6.

 

 

Article L730-9

 

Where necessary, retail sales be defined by decree of the ministers in charge for the purpose of Articles L. 730-5, L. 730-6 and L. 730-7.

 

 

Article L730-10

 

Infringements of the bans referred to in Articles L. 730-5 to L. 730-7 or of the provisions introduced in application of the said Articles shall be established and prosecuted as stipulated in the first sub-paragraph of Article L. 450-1 and in Articles L. 450-2 and L. 450-3 and shall attract a fine of 100,000 francs.  Articles L. 470-1 and L. 470-4 shall apply.

 

 

Article L730-11

 

I. – Compensation payable in reparation for losses incurred as a result of the application of the bans for which provision is made in Article L. 730-6 shall comply with the system of compensation for compulsory purchases.

II. – Compensation shall be awarded by:

1.  Allocating each trader affected by the aforementioned ban an equivalent pitch to the pitch abolished within the precinct of the market of national interest.

The pitch offered shall be deemed to be equivalent if it is such that a similar business of a similar size to the average business on the old pitch over the last three years can be conducted.  If it is acknowledged that the first offer is unsatisfactory, the promoter offering the compensation shall notify the applicant of a new offer.  If the judge again finds this new offer to be unsatisfactory, he shall set the balance to be paid by the promoter.

Where a trader's acknowledged right to be allocated a pitch is larger or smaller than one or more full pitches in the market of national interest, the promoter offering the compensation shall meet his obligations by offering to allocate the interested party the unit(s) which represent the pitch which is the nearest in size to the pitch to which he is entitled, whereby:

a)  if the full pitch unit(s) allocated exceed the trader's rights, the trader shall pay a balance equal to the sum of the right of first accession to the part of the pitch which exceeds the part allocated as equivalent.  However, the trader may ask to be allocated a pitch which is one size smaller than his rights and, if his request is satisfied, he shall receive a balance equal to the amount of the right of first accession to the part of the pitch renounced;

b)  if the pitch offered and actually allocated to the interested party pursuant to the foregoing provisions is one size smaller than his rights, he shall again receive a balance calculated as described above.

2.  Reimbursing the amount of the right of first accession owed by the trader for the pitch allocated, less the value of the tangible and intangible assets assigned or retained by him, up to the right of first accession.

3.  Compensating for the loss of non-transferable assets and relocation expenses.

III. – However, compensation may be paid in specie in lieu of the offer of pitches for which provision is made in II (1) where traders prove that they are unable, for personal reasons or because of the particular nature of their trade, to set up elsewhere within the market precinct.

Compensation in specie shall only be paid to beneficiaries who sign a commitment limiting the activities which they may exercise in time and space.

IV. – The terms of application of the provisions of this Article shall be laid down by decree of the Conseil d'Etat.

 

 

Article L730-12

 

The registrations taken in application of Articles L. 141-5 to L. 143-20 and L. 143-23 shall remain valid ipso jure in the event that a business affected by the bans for which provision is made in Article L. 730-6 relocates within the precinct of a market of national interest, provided that the notice for which provision is made in the first sub-paragraph of Article L. 143-1 is given.

Traders' sole right of occupation of pitches established within the precinct of a market of national interest may be included in charges on the business for the purpose of this provisions.

 

 

Article L730-13

 

Tenants of premises housing a business affected by the ban for which provision is made in Article L. 730-6 may exercise a business for which no provision is made in the lease or transfer the lease so that a third party may exercise such business on the demised premises, any agreement to the contrary notwithstanding, including agreements concluded previously.

Tenants or persons to whom the lease is transferred shall notify the owner of the business which they intend to exercise by extrajudicial deed.

The owner may object to the exercise of the said business within one month of service of the said deed if it will cause greater inconvenience to the building, its inhabitants or the neighbourhood than the business abolished.

Disagreements shall be referred to the tribunal de grande instance which may uphold the tenant's request and amend the rent, by way of exception from the provisions of Articles L. 145-37 to L. 145-39.

 

 

Article L730-14

 

Business tenants who cease trading pursuant to a decision imposing a ban in accordance with the provisions of this chapter may terminate the lease without paying compensation to the owner, provided that they give the owner at least three months' notice by extrajudicial deed.

 

 

Article L730-15

 

Laws and regulations governing the holding of markets of agricultural and food produce shall not apply to national interest markets.

The general arrangements for national interest markets and the general terms and conditions applicable to users thereof shall be stipulated by decree of the Conseil d'Etat.

The location and management of each market shall be determined by decree in accordance with Article L. 730-1.  The said decrees may require existing markets to be reorganised, any provisions to the contrary notwithstanding.

The rules governing the arrangements for and working of national interest markets shall be stipulated by decree of the Conseil d'Etat.

 

 

Article L730-16

 

Prefects shall exercise policing powers within the precinct of national interest markets.  They shall ensure that laws and regulations applicable to the market are applied within the protective perimeter and shall therefore report any infringements committed to the procureur de la République.  Where the market and the protective perimeter thereof extend over several departments, the aforementioned powers shall be exercised by the prefect designated by the minister of the interior.

 

 

Article L730-17

 

A government commissioner shall be designated and seconded to the market manager.  The method of designation and the powers granted to the commissioner shall be defined by decree of the Conseil d'Etat.

 

 

 

BOOK VIII

Certain regulated professions

 

TITLE I

Court-appointed receivers, legal agents in the winding-up of undertakings and corporate analysis experts

 

Chapter I

Court-appointed receivers

 

      Section 1

      Tasks, conditions of access and performance and incompatibilities

 

  

Sub-section 1: Tasks

 

Article L811-1

 

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 1 and Article 13 Official Gazette of 4 January 2003)

 

The receivers are representatives, either natural persons or legal entities, entrusted by a decision of the court to administer the assets of others or to provide assistance with or supervision of the administration of such assets.

They are personally responsible for performing the tasks entrusted to them. When the proper conduct of the proceedings so requires, however, and with the well-founded authorisation of the presiding judge, they may entrust some of those tasks to third parties, while retaining responsibility therefor.

When the receivers entrust to third parties tasks pertaining to the mission entrusted to them by the court, they effect payment to them from the remuneration they receive pursuant to the decree referred to in Article L. 814-6.

Sub-section 2: Conditions of access to the profession

 

Article L811-2

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 2 and Article 13 Official Gazette of 4 January 2003)

 

Without prejudice to the special provisions applicable to certain cases, such as those relating to minors and protected adults, or to the occasional missions which can be entrusted to members of the judiciary and the legal profession, no person whose name does not appear on the list established by a national committee instituted for that purpose shall be appointed by the court to perform such duties.

In exceptional circumstances, however, the court may, via an expressly reasoned decision and after seeking the advice of the Public Prosecutor, appoint as receiver a natural person who can furnish proof of specific experience or qualifications pertinent to the nature of the case and who meets the conditions laid down in subparagraphs 1 to 4 of Article L. 811-5.

Persons appointed pursuant to the previous paragraph must not, within the previous five years, either directly or indirectly, have received any reward or payment of any kind from the natural person or legal entity in administration, receiving assistance or under supervision, from a person who controls that legal entity or from any company which it controls within the meaning of subparagraphs II and III of Article L. 233-16, nor have been an advisor to the natural person or legal entity concerned or have been in any way dependent on it. They must, moreover, have no personal interest in the mission entrusted to them and must not be former directors or court-appointed receivers whose names have been removed from the lists pursuant to Articles L. 811-6, L. 811-12 and L. 812-4. Having assumed the functions entrusted to them, they are required, when performing their professional duties, to discharge the obligations imposed on court-appointed receivers whose names appear on the list.

Persons appointed pursuant to the second paragraph must, upon assuming their functions, give a sworn statement to the effect that they meet the conditions laid down in subparagraphs 1 to 4 of Article L. 811-5, that they fulfil the obligations enumerated in the previous paragraph and that they are not under any prohibition so to act pursuant to the penultimate paragraph of Article L. 814-10.

When the court appoints a legal entity, it designates one or more natural persons within it to represent it in the performance of the duties entrusted to it.

 

Article L811-3

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 3 and Article 13 Official Gazette of 4 January 2003)

 

The national list is divided into sections corresponding to the jurisdiction of each court of appeal.

 

Article L811-4

 

(

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 4 and Article 13 Official Gazette of 4 January 2003)

 

The composition of the national committee referred to in Article L. 811-2 is as follows:

- a Court of Cassation judge, acting as chairman, designated by the president of the Court of Cassation;

- an officer of the National Audit Office, designated by the chairman of the National Audit Office;

- a member of the Inspectorate of Public Finances, designated by the Finance Minister;

- an appeal court judge, designated by the president of the Court of Cassation;

- a higher commercial court judge, designated by the president of the Court of Cassation;

- a professor of law, economics or management, designated by the Minister for the Universities;

- a representative of the Conseil d'Etat, designated by the Vice-President of the Conseil d'Etat;

- two persons qualified in an economic or social discipline, designated by the Minister of Justice;

- three listed court-appointed receivers, elected by their peers as prescribed in a Conseil d'Etat decree.

In the event of a tied vote, the chairman has a casting vote.

The chairman and the members of the commission, and their deputies (equal in number and chosen from the same categories), are appointed for a term of office of three years, renewable once.

A judge from the Public Prosecutor's Office and his deputy are appointed to act as the government's representative on the national committee and to examine, among other things, the applications for admission.

The commission's operating costs are met by the State.

 

Article L811-5

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 5 and Article 13 Official Gazette of 4 January 2003)

 

No person's name shall appear on the commission's list unless they meet the following conditions:

1. They must be French nationals or nationals of a European Community Member State or of a State which is a party to the European Economic Space Agreement;

2. They must not be the perpetrator of dishonourable or dishonest acts which have resulted in a criminal conviction;

3. They must not be the perpetrator of acts of the same nature which have resulted in a disciplinary or administrative sanction entailing removal from office, striking off, dismissal, withdrawal of approval or withdrawal of authorisation;

4. They must not have been declared bankrupt or legally incompetent or made subject to forfeiture of rights as provided for in Chapter V of Title II of Book VI of the present Code, Title VI of the aforementioned Law No. 85-98 of 25 January 1985 or, under the scheme which preceded that law, Title II of the aforementioned Law No. 67-563 of 13 July 1967;

5. They must have passed the professional training course entrance examination, have taken that course and passed the aptitude test set for legal agents for winding up companies.

Only persons who hold the qualifications determined by decree shall be allowed to take the professional training course entrance examination.

Contrary to the above provisions, persons who meet the skills and professional competence requirements determined in a Conseil d'Etat decree are exempted from the professional training course entrance examination. The commission may also exempt such persons, under the conditions determined in a Conseil d'Etat decree, from a part of the professional training course and from all or part of the aptitude test set for legal agents for winding up companies.

Listed legal entities shall act as legal agents for winding up companies only through their members who are themselves listed.

Persons who can show that they have obtained qualifications in a European Community Member State other than France, or in a State which is a party to the European Economic Space Agreement, which are sufficient to qualify them to act as a court-appointed receiver are exempted from the qualifications, professional training course and examination requirements referred to in the sixth and seventh paragraphs, provided that they have taken a knowledge test as prescribed in a Conseil d'Etat decree. The list of candidates authorised to take the examination is drawn up by the commission.

 

NB - Law 2003-7 2003-01-03 Article 39 I: The provisions of the present Art L. 811-5 of the Commercial Code, given that they institute an entrance examination for the professional training course, are only applicable to persons whose names are not already on the course register on the date on which the present law is promulgated.

 

 

 

Sub-section 3: Conditions of  Practise

 

Article L811-6

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 6 and Article 13 Official Gazette of 4 January 2003)

 

The national committee, at its own initiative or at the behest of the Minister of Justice, the chairman of the national council of court-appointed receivers and legal agents for winding up companies, the regional commissioner, or the Public Prosecutor for the jurisdiction in which the court-appointed receiver is established, may, via a reasoned decision and having directed the party concerned to submit its observations, remove from the list referred to in Article L. 811-2 a court-appointed receiver who, on account of his physical or mental state, is unable to perform his duties properly or who has demonstrated an inability to perform his duties properly.

Removal from the list does not preclude disciplinary proceedings from being instituted against the court-appointed receiver if the complaints made against him relate to actions executed in the performance of his duties.

 

 

Article L811-7

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 Official Gazette of 4 January 2003)

 

Court-appointed receivers may jointly found private professional companies governed by Law No. 66-879 of 29 November 1966 relating to private professional companies in order to practice their profession together. They may also practice their profession via a liberal professional practice subject to a legislative or regulatory charter or having a protected designation. They may also be members of an economic interest group or a European economic interest group or partners in a joint equity venture company governed by Title II of Law No. 90-1258 of 31 December 1990 relating to the practising of the liberal professions via companies subject to a legislative or regulatory charter or having a protected designation.

 

 

Article L811-8

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 7 and Article 13 Official Gazette of 4 January 2003)

 

The cases being handled by a court-appointed receiver who is relinquishing his duties, whatever the reason therefor, shall be distributed by the court among the other court-appointed receivers within three months of his relinquishment thereof.

In the interest of the proper administration of justice, however, the court may authorise the former court-appointed receiver to continue to handle one or more of the cases in hand, unless the reason for him abandoning his duties was a striking off. Such a receiver shall continue to be subject to the provisions of Articles L. 811-10 to L. 811-16 and L. 814-1 and L. 814-5.

 

 

Article L811-9

 

(

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 Official Gazette of 4 January 2003)

 

The persons whose names appear on the list are entitled to practise throughout France.

 

Sub-section 4: Incompatibilities

 

Article L811-10

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 8 and Article 13 Official Gazette of 4 January 2003)

 

The status of listed court-appointed receiver is incompatible with the practising of any other profession, save that of legal counsel.

It is, moreover, incompatible with:

1. Any business of a commercial nature, whether conducted directly or through an intermediary.

2. The status of partner in a general partnership, of financing partner in a limited partnership or a partnership limited by shares, of manager of a limited company, of chairman of the board of directors, of member of the executive board, of general manager or assistant general manager of a public limited company, of chairman or chief executive of a simplified joint-stock company, of member of the supervisory board or board of directors of a commercial company, and of manager of a non-commercial partnership, unless the corporate mission of those companies is the practising of the profession of court-appointed receiver or the acquisition of premises for that purpose. Moreover, a receiver may perform management duties within a non-commercial partnership whose sole purpose is the administration of family interests.

The status of listed court-appointed receiver does not preclude consultancy activities in disciplines in which the individual in question is qualified, nor the conducting of the ad hoc administration and conciliation missions provided for in Article L. 611-3 of the present Code and in Article 351-4 of the Rural Code, or those of commissioner for execution of the plan, of amicable administrator or liquidator, of court-appointed expert or of amicable or court-appointed receiver. Such activities and such missions, with the exception of ad hoc administrator, arbitrator and commissioner for execution of the plan, shall only be conducted subsidiarily.

With the exception of the fourth paragraph, the conditions of the present Article are applicable to listed legal entities.

 

 

Section 2: Monitoring, inspection and discipline

 

Sub-section 1: Supervision and Inspection

 

Article L811-11

 

(

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 9 and Article 13 Official Gazette of 4 January 2003)

 

Court-appointed receivers are placed under the supervision of the Public Prosecutor's Office. When performing their professional duties, they are subject to inspection by the public authorities in connection with which they shall provide all required information or documents without entitlement to raise the issue of professional secrecy.

The organisation and content of those inspections are determined in a Conseil d'Etat decree.

Within the framework of the control exercised by the national council pursuant to Article L. 814-2, court-appointed receivers are required to defer to the requests of the persons tasked with such control functions and shall provide them with all required information or documents without entitlement to raise the issue of professional secrecy.

The auditors of a court-appointed receiver being audited or inspected are required to defer to the requests of the persons tasked with the auditing or inspection functions and to provide them with any information gathered or documents drawn up in connection with their auditing duties, without entitlement to raise the issue of professional secrecy.

 

Sub-section 2: Disciplinary Matters

 

Article L811-12 A

 

 (inserted by Law No. 2003-7 of 3 January 2003 Article 10 and Article 13 Official Gazette of 4 January 2003)

 

Any breach of the law and regulations, any violation of the professional rules, any failure to maintain probity or honour, even in connection with facts unrelated to professional matters, shall expose the court-appointed receiver responsible to disciplinary proceedings.

 

 

Article L811-12

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 11 and Article 13 Official Gazette of 4 January 2003)

 

Disciplinary action is initiated by the Minister of Justice, the Public Prosecutor of the court of appeal having jurisdiction at the place where the acts were perpetrated, the regional commissioner or the chairman of the national council of court-appointed receivers and legal agents for winding up companies. Acceptance of the resignation of a person whose name appears on the list of court-appointed receivers does not preclude disciplinary proceedings from being instituted if the complaints made against him relate to actions executed in the performance of his duties.

I. - The national registration committee sits as a disciplinary chamber, with the regional commissioner exercising the Public Prosecutor's functions. It may impose the following disciplinary sanctions:

1. A warning;

2. A reprimand;

3. A temporary ban of up to three years;

4. Removal from the list of court-appointed receivers.

II. - A warning or a reprimand may be accompanied, for a period of one year, by control measures determined by the commission which impose specific obligations on the court-appointed receiver. Such obligations may also be prescribed by the commission when the temporarily barred court-appointed receiver resumes his functions.

III. - When it imposes a disciplinary sanction, the commission may decide, having regard to the seriousness of the facts, to make the court-appointed receiver liable for payment of some or all of the costs incurred through having a court-appointed receiver or an expert present at the verifications or inspections which enabled the facts to be established.

 

 

Article L811-13

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 Official Gazette of 4 January 2003)

 

Any court-appointed receiver who is the subject of criminal or disciplinary proceedings may be temporarily suspended from his duties by the national committee.

In urgent cases, temporary suspension can be imposed even before the criminal or disciplinary proceedings are instituted if inspections or verifications have revealed that the sums collected by the court-appointed receiver in his professional capacity are at risk.

The commission may end the temporary suspension at any time at the request of either the regional commissioner or the court-appointed receiver.

The suspension ends automatically as soon as the criminal or disciplinary proceedings are concluded. It also ends automatically in the situation envisaged in the second paragraph if no criminal or disciplinary proceedings are instituted within one month of it being imposed.

 

 

Article L811-14

(Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 Official Gazette of 4 January 2003)

 

The disciplinary action lapses after ten years.

 

Article L811-15

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 Official Gazette of 4 January 2003)

 

A court-appointed receiver who is barred, struck off or suspended must cease all professional activities.

Any actions carried out despite this sanction may be declared null and void by the court ruling in chambers at the request of any interested party or of the Public Prosecutor. The decision is enforceable against any person.

Any breach of the foregoing provisions incurs the penalties applicable in the event of illegal exercise of functions as provided for in Article 433-17 of the Penal Code.

 

Article L811-16

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 12 and Article 13 Official Gazette of 4 January 2003)

 

No person shall claim court-appointed receiver status other than in connection with a mission entrusted to him by virtue of the second paragraph of Article L. 811-2 or the second paragraph of Article L. 811-8 unless his name appears on the list of court-appointed receivers.

Any breach of this provision incurs the penalties applicable in the event of illegal exercise of functions as provided for in Article 433-17 of the Penal Code.

Any person who uses an occupational designation which resembles that of court-appointed receiver and could give rise to a misunderstanding in the public perception‍ shall incur the same penalties.

 

  

Chapter II: Legal agents in the winding-up of undertakings

 

 

Section 1: Tasks, conditions of access and performance and incompatibilities

 

Sub-section 1: Missions

 

Article L812-1

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 14 Official Gazette of 4 January 2003)

 

Legal agents for winding up companies are natural persons or legal entities instructed by the court to represent the creditors and, if appropriate, to liquidate companies pursuant to Title II of Book VI.

They are personally responsible for performing the tasks entrusted to them. When the proper conduct of the proceedings so requires, however, and with the well-founded authorisation of the presiding judge, they may entrust some of those tasks to third parties, while retaining responsibility therefor.

When the receivers entrust to third parties tasks pertaining to the mission entrusted to them by the court, they effect payment to them from the remuneration they receive pursuant to the decree referred to in Article L. 814-6.

Sub-section 2: Conditions of Admission to the profession

 

Article L812-2

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 15 Official Gazette of 4 January 2003)

 

I. - No person may be appointed by a court to perform the functions of a legal agent for winding up companies in bankruptcy proceedings unless his name appears on the list compiled for that purpose by a national committee.

II. - Contrary to this, however, the court may, via a specially reasoned decision and after seeking the advice of the Public Prosecutor, appoint to the functions of a legal agent for winding up companies a natural person who can furnish proof of specific experience or qualifications pertinent to the nature of the case and who meets the conditions laid down in subparagraphs 1 to 4 of Article L. 812-3.

The persons referred to in the previous paragraph must not, within the previous five years, either directly or indirectly, have received any reward or payment of any kind from the natural person or legal entity in administration, receiving assistance or under supervision, from a person who controls that legal entity or from any company which it controls within the meaning of subparagraphs II and III of Article L. 233-16, nor have been an advisor to the natural person or legal entity concerned or have been in any way dependent on it. They must, moreover, have no personal interest in the mission entrusted to them and must not be former directors or court-appointed receivers whose names have been removed from the lists pursuant to Articles L. 811-6, L. 811-12, L. 812-4 and L. 812.9. Having assumed the functions entrusted to them, they are required, when performing their professional duties, to discharge the obligations imposed on legal agents for winding up companies whose names appear on the list.

Upon assuming their functions, persons appointed pursuant to the first paragraph of this present subparagraph II must give a sworn statement to the effect that they meet the conditions laid down in subparagraphs 1 to 4 of Article L. 812-3, that they fulfil the obligations enumerated in the previous paragraph and that they are not under any prohibition so to act pursuant to the penultimate paragraph of Article L. 814-10.

III. - When the court appoints a legal entity, it designates one or more natural persons within it to represent it in the performance of the duties entrusted to it.

 

Article L812-2-1

 

(inserted by Law No. 2003-7 of 3 January 2003 Article 13 and Article 16 Official Gazette of 4 January 2003)

 

The list referred to in Article L. 812-2 is divided into sections corresponding to the jurisdiction of each court of appeal.

 

 

Article L812-2-2

 

 (inserted by Law No. 2003-7 of 3 January 2003 Article 13 and Article 16 Official Gazette of 4 January 2003)

 

The composition of the national committee referred to in Article L. 812-2 is as follows:

- a Court of Cassation judge, acting as chairman, designated by the president of the Court of Cassation;

- an officer of the National Audit Office, designated by the chairman of the National Audit Office;

- a member of the Inspectorate of Public Finances, designated by the Finance Minister;

- an appeal court judge, designated by the president of the Court of Cassation;

- a higher commercial court judge, designated by the president of the Court of Cassation;

- a professor of law, economics or management, designated by the Minister for the Universities;

- a representative of the Conseil d'Etat, designated by the Vice-President of the Conseil d'Etat;

- two persons qualified in an economic or social discipline, designated by the Minister of Justice;

- three listed legal agents for winding up companies, elected by their peers as prescribed in a Conseil d'Etat decree. One of them is replaced by a person whose name appears on the list of corporate analysis experts when, pursuant to the provisions of the last paragraph of Articles L. 813-1 and L. 813-2, the commission gives an opinion regarding the registration, striking off or withdrawal from the list of such an expert.

In the event of a tied vote, the chairman has a casting vote.

The chairman and the members of the commission, and their deputies (equal in number and chosen from the same categories), are appointed for a term of office of three years, renewable once.

A judge from the Public Prosecutor's Office and his deputy are appointed to act as the government's representative on the national committee and to examine, among other things, the applications for admission.

The commission's operating costs are met by the State.

 

Article L812-3

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 17 Official Gazette of 4 January 2003)

 

No person's name shall appear on the commission's list unless they meet the following conditions:

1. They must be French nationals or nationals of a European Community Member State or of a State which is a party to the European Economic Space Agreement;

2. They must not be the perpetrator of dishonourable or dishonest acts which have resulted in a criminal conviction;

3. They must not be the perpetrator of acts of the same nature which have resulted in a disciplinary or administrative sanction entailing removal from office, striking off, dismissal, withdrawal of approval or withdrawal of authorisation;

4. They must not have been declared bankrupt or legally incompetent or made subject to forfeiture of rights as provided for in Chapter V of Title II of Book VI of the present Code, Title VI of the aforementioned Law No. 85-98 of 25 January 1985 or, under the scheme which preceded that law, Title II of the aforementioned Law No. 67-563 of 13 July 1967;

5. They must have passed the professional training course entrance examination, have taken that course and passed the aptitude test set for legal agents for winding up companies;

Only persons who hold the qualifications determined by decree shall be allowed to take the professional training course entrance examination.

Contrary to the above provisions, persons who meet the skills and professional competence requirements determined in a Conseil d'Etat decree are exempted from the professional training course entrance examination. The commission may also exempt such persons, under the conditions determined in a Conseil d'Etat decree, from a part of the professional training course and from all or part of the aptitude test set for legal agents for winding up companies.

Listed legal entities shall act as legal agents for winding up companies only through their members who are themselves listed.

Persons who can show that they have obtained qualifications in a European Community Member State other than France, or in a State which is a party to the European Economic Space Agreement, which are sufficient to qualify them to act as a legal agent for winding up companies are exempted from the qualifications, professional training course and examination requirements referred to in the second and third paragraphs, provided that they have taken a knowledge test as prescribed in a Conseil d'Etat decree. The list of candidates authorised to take the examination is drawn up by the commission.

 

NB - Law 2003-7 2003-01-03 Article 39 I: The provisions of the present Art L. 812-3 of the Commercial Code, given that they institute an entrance examination for the professional training course, are only applicable to persons whose names are not already on the course register on the date on which the present law is promulgated.

 

 

Sub-section 3: Conditions of Practise

 

Article L812-4

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 18 Official Gazette of 4 January 2003)

 

The national committee, at its own initiative or at the behest of the Minister of Justice, the chairman of the national council of court-appointed receivers and legal agents for winding up companies, the regional commissioner, or the Public Prosecutor for the jurisdiction in which the court-appointed receiver is established, may, via a reasoned decision and having directed the party concerned to submit its observations, remove from the list referred to in Article L. 812-2 a legal agent for winding up companies who, on account of his physical or mental state, is unable to perform his duties properly or who has demonstrated an inability to perform his duties properly.

Removal from the list does not preclude disciplinary proceedings from being instituted against the court-appointed receiver if the complaints made against him relate to actions executed in the performance of his duties.

 

Article L812-5

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 Official Gazette of 4 January 2003)

 

Legal agents for winding up companies may jointly found private professional companies governed by the aforementioned Law No. 66-879 of 29 November 1966. They may also practice their profession via a liberal professional practice as provided for in Law No. 90-1258 of 31 December 1990 relating to the practising of the liberal professions via companies subject to a legislative or regulatory charter or having a protected designation. They may also be members of an economic interest group or a European economic interest group or partners in a joint equity venture company governed by Title II of Law No. 90-1258 of 31 December 1990 relating to the practising of the liberal professions via companies subject to a legislative or regulatory charter or having a protected designation.

 

 

Article L812-6

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 19 Official Gazette of 4 January 2003)

 

The cases being handled by a legal agent for winding up companies who is relinquishing his duties, whatever the reason therefor, shall be distributed by the court among the other receivers within three months of his relinquishment thereof.

In the interest of the proper administration of justice, however, the court may authorise the former receiver to continue to handle one or more of the cases in hand, unless the reason for him abandoning his duties was a striking off. Such a receiver shall continue to be subject to the provisions of Articles L. 812-8 to L. 812-10 and L. 814-1 and L. 814-5.

 

Article L812-7

Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 20 Official Gazette of 4 January 2003)

 

The persons whose names appear on the list are entitled to practise throughout France.

 

Sub-section 4: Incompatibilities

 

Article L812-8

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 21 Official Gazette of 4 January 2003)

 

The status of listed legal agent for winding up companies is incompatible with the practising of any other profession.

It is, moreover, incompatible with:

1. Any business of a commercial nature, whether conducted directly or through an intermediary.

2. The status of partner in a general partnership, of financing partner in a limited partnership or a partnership limited by shares, of manager of a limited company, of chairman of the board of directors, of member of the executive board, of general manager or assistant general manager of a public limited company, of chairman or chief executive of a simplified joint-stock company, of member of the supervisory board or board of directors of a commercial company, and of manager of a non-commercial partnership, unless the corporate mission of those companies is the practising of the profession of legal agent for winding up companies or the acquisition of premises for that purpose. Moreover, a legal agent for winding up companies may perform management duties within a non-commercial partnership whose sole purpose is the administration of family interests.

The status of listed legal agent for winding up companies does not preclude consultancy activities in disciplines in which the individual in question is qualified, nor the conducting of the ad hoc administration and conciliation missions referred to in Article L. 611-3 of the present Code and in Article 351-4 of the Rural Code, or those of commissioner for execution of the plan, of amicable administrator or liquidator, of court-appointed expert or of amicable or court-appointed receiver. Such activities and such missions, with the exception of ad hoc administrator, arbitrator and commissioner for execution of the plan, shall only be conducted subsidiarily. The same person shall not successively perform the functions of arbitrator and legal agent for winding up companies for the same company until one year has elapsed.

With the exception of the fourth paragraph, the conditions of the present Article are applicable to listed legal entities.

 

Section 2: Supervision, Inspection and Discipline

 

Article L812-9

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 22 Official Gazette of 4 January 2003)

 

The provisions relating to the supervision, inspection and discipline of court-appointed receivers contained in Articles L. 811-11 to L. 811-15 also apply to legal agents for winding up companies.

The national registration committee sits as a disciplinary chamber, with the regional commissioner exercising the Public Prosecutor's functions.

 

 

Article L812-10

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 23 Official Gazette of 4 January 2003)

 

No person shall claim legal agent for winding up companies status other than in connection with a mission entrusted to him by virtue of the first paragraph of Article L. 812-2 and the second paragraph of Article L. 812-6 unless his name appears on the list of legal agents for winding up companies.

Any breach of this provision incurs the penalties applicable in the event of illegal exercise of functions provided for in Article 433-17 of the Penal Code.

Any person who uses an occupational designation which resembles that of legal agent for winding up companies and could give rise to a misunderstanding in the public perception‍ shall incur the same penalties.

 

Chapter III: Corporate analysis experts

 

Section 1: Missions and Conditions of Appointment

 

Article L813-1

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 24 Official Gazette of 4 January 2003)

 

Corporate analysis experts are appointed by the courts to draft a report on a company's economic and financial situation in the event of an amicable settlement or judicial administration, or to assist with the drafting of such a report in the event of judicial administration.

Such experts must not, within the previous five years, have received any reward or payment of any kind, either directly or indirectly, from the natural person or legal entity in administration, receiving assistance or under supervision, or from a person who controls that legal entity, and must not have been in any way dependent on the natural person or legal entity concerned.

The experts thus appointed must, upon assuming their functions, give a sworn statement to the effect that they meet the conditions laid down in the preceding paragraph.

Such experts may be chosen from among the experts on this subject whose names appear on the lists compiled for the information of judges pursuant to Article 2 of Law No. 71-498 of 29 June 1971 relating to court-appointed experts.

Each court of appeal registers experts on this subject on the advice of the national committee created by Article L. 812.2. Such registration is valid for three years. Experts can re-apply when that period expires.

 

Section 2: Cessation of Functions

 

Article L813-2

 

(

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 24 Official Gazette of 4 January 2003)

 

In the circumstances envisaged in the second paragraph of Article 5 of Law No. 71-498 of 29 June 1971 relating to court-appointed experts, an expert listed under the heading of corporate analysis may be struck off before the three-year period has expired, at the request of the national committee or after its advice has been sought.

The court of appeal can also remove from the list the names of experts on this subject whose professional competence has proved inadequate or who are no longer able to perform their duties in a proper manner.

 

 

Chapter IV: Common provisions

 

 

Section 1: Appeals against decisions of registration committees and representation before the public authorities

 

 

Sub-section 1: Appeal against decisions of registration committees

 

Article L814-1

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 26 Official Gazette of 4 January 2003)

 

Appeals against the decisions made by the national committees in regard to registration, striking off, temporary suspension and discipline are brought before the Paris court of appeal.

Such appeals, with the exception of those brought against temporary suspension, are of a suspensive nature.

 

Sub-section 2: Representation of the professions before the public authorities

 

Article L814-2

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 26 Official Gazette of 4 January 2003)

 

The professions of court-appointed receiver and legal agent for winding up companies are represented vis-à-vis the public authorities by a national council of court-appointed receivers and legal agents for winding up companies, a public institution with corporate status responsible for defending the collective interests of those professions. The national council is also responsible for seeing to it that the administrators discharge their obligations, for organising their professional training, for ensuring that they comply with their obligation to maintain and develop their knowledge, for monitoring their studies and reporting on the accomplishment of these tasks in an annual report sent to the Minister of Justice.

The methods used for electing the national council and for conducting its business, which include, in equal numbers, an electoral college representing the court-appointed receivers and another representing the legal agents for winding up companies, are determined in a Conseil d'Etat decree.

 

 

 

Section 2 : Guarantee of the representation of businesses, professional civil liability and remuneration

 

Sub-section 1: Guarantee of the representation of funds and professional civil liability

 

Article L814-3

 

 (Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 27 Official Gazette of 4 January 2003)

 

The purpose of a fund which has legal personality and is administered by its contributors is to guarantee the repayment of the funds, bills or securities received or managed by each listed court-appointed receiver and by each listed legal agent for winding up companies in connection with the transactions they are required to process in the performance of their duties. Two judges from the Public Prosecutor's Office are appointed to act as the government's representatives to the fund, one as incumbent and the other as deputy.

Membership of this fund is compulsory for every listed court-appointed receiver and every listed legal agent for winding up companies.

The fund's resources originate from the income generated by a special annual contribution paid by each listed court-appointed receiver and each listed legal agent for winding up companies.

The contributions paid by the court-appointed receivers and the legal agents for winding up companies are applied to guaranteeing only those court-appointed receivers and legal agents for winding up companies who are duly listed.

In the event of the fund's resources proving to be insufficient to meet its obligations, it shall issue a call for additional contributions from the listed professionals.

The fund's guarantee comes into play, without the creditors having the benefit of discussion envisaged in Article 2021 of the Civil Code, merely upon production of proof that the debt is payable and that the listed court-appointed receiver or legal agent for winding up companies has failed to make provision therefor.

The fund is required to insure itself against the risks it incurs through application of the present code.

Appeals against the fund's decisions are brought before the district court of Paris.

 

 

Article L814-4

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 28 Official Gazette of 4 January 2003)

 

Each listed court-appointed receiver and each listed legal agent for winding up companies must prove that they have taken out insurance through the guarantee fund. That insurance covers the financial consequences of the civil liability incurred by court-appointed receivers and legal agents for winding up companies in respect of any negligence or errors for which they or their employees have been responsible in the performance of their duties.

 

 

Article L814-5

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (1) Official Gazette of 16 May 2001)

 

(Law No 2003-7 of 3 January 2003 Article 13 and Article 29 Official Gazette of 4 January 2003)

 

A court-appointed receiver whose name does not appear on the national list, but who is appointed in the circumstances envisaged in Article L. 811-2, and likewise a legal agent for winding up companies whose name does not appear on the national list, but who is appointed in the circumstances envisaged in Article L. 812-2, must, upon assuming their functions, prove that they have a guarantee to cover repayment of the funds, bills or securities, and also, if appropriate, an insurance policy taken out through the guarantee fund. This insurance covers the financial consequences of the risks incurred by the court-appointed receiver or the legal agent for winding up companies in respect of any negligence or errors for which they or their employees have been responsible in the performance of their duties.

 

 

Sub-section 2: Remuneration

 

Article L814-6

 

(Law No 2001-420 of 15 May 2001 Article 113 I (1) Official Gazette of 16 May 2001)

 

 

The Conseil d'Etat shall issue a decree stipulating the terms of remuneration of court-appointed receivers, irrespective of whether or not they are registered on the national list, and of legal agents for winding up companies, together with the rules for paying remuneration to persons called, at their request, to carry out certain technical tasks for the benefit of the company not included in their brief.

 

Article L814-7

 

 (inserted by Law No. 2003-7 of 3 January 2003 Article 13 and Article 34 (I) Official Gazette of 4 January 2003)

 

When the proceeds from realisation of the company's assets are insufficient to enable the liquidator or the creditors' representative to receive, by way of the remuneration due to him pursuant to the provisions of Article L. 814-6, a sum at least equal to the threshold set in a Conseil d'Etat decree, a decision of the court declares that case to be impecunious on the basis of a proposal from the insolvency judge and in the light of the elements of proof produced by the liquidator or the creditors' representative.

That same decision determines the sum corresponding to the difference between the remuneration actually received by the liquidator or the creditors' representative and the threshold referred to in the previous paragraph.

The sum paid to the creditors' representative or the liquidator is deducted from a portion of the interest paid by the Caisse des dépôts et consignations on the funds deposited with it pursuant to Articles L. 621-33, L. 621-64 and L. 622.8. That portion is allocated to a special fund managed by the Caisse des dépôts et consignations under the control of an administration committee. The present paragraph's terms of application are determined in a Conseil d'Etat decree.

 

 

Section 3: Miscellaneous Provisions

 

Article L814-8

 

 (inserted by Law No. 2003-7 of 3 January 2003 Arts 13, 30 and 31 Official Gazette of 4 January 2003)

 

When a listed court-appointed receiver or legal agent for winding up companies appointed by a court to perform the task envisaged in Book VI in regard to a company has already acted on its behalf as an advisor or in connection with the tasks referred to in the penultimate lines of Articles L. 811-10 and L812-8, he shall inform the court of the nature and scale of the duties thus performed during the previous five years.

Failure to observe the provisions of the previous paragraph is punishable via disciplinary proceedings.

 

 

Article L814-9

 

 (inserted by Law No. 2003-7 of 3 January 2003 Arts 13, 30 and 32 Official Gazette of 4 January 2003)

 

Listed court-appointed receivers and legal agents for winding up companies are required to undergo continuous training which enables them to maintain and improve their knowledge. Such training is organised by the national council referred to in Article L.814.2.

 

 

Article L814-10

 

 (inserted by Law No. 2003-7 of 3 January 2003 Arts 13, 30 and 35 Official Gazette of 4 January 2003)

 

Non-listed court-appointed receivers and legal agents for winding up companies appointed as provided for in the second paragraph of Article L. 811-2, the first paragraph of subparagraph II of Article 812-2 or Article L. 621-137, are placed under the supervision of the Public Prosecutor's Office. When performing their professional duties, they are subject to inspection by the public authorities in connection with which they shall provide all required information or documents without entitlement to raise the issue of professional secrecy.

The auditors of non-listed court-appointed receivers or liquidators undergoing an inspection are required to defer to the requests of the persons tasked with the auditing or inspection functions and provide them with any information gathered or documents drawn up in connection with their auditing duties, without entitlement to raise the issue of professional secrecy.

If such court-appointed receivers or liquidators are found to have committed an act which constitutes a breach, infraction or lapse within the meaning of Article L. 811-12 A, the Public Prosecutor may ask the district court to prohibit them from practising as court-appointed receivers or liquidators.

The Minister of Justice shall be informed of all prohibitions imposed pursuant to the previous paragraph and shall, in turn, inform the Public Prosecutors thereof.

 

 

Article L814-11

 

 (inserted by Law No. 2003-7 of 3 January 2003 Arts 13, 30 and 36 Official Gazette of 4 January 2003)

 

Any sum held by a court-appointed receiver or a legal agent for winding up companies by virtue of a private agreement shall be paid into an account with the Caisse des dépôts et consignations as soon as it is received unless the principal expressly decides to designate another financial institution. Should there be any delay, the court-appointed receiver or the legal agent for winding up companies shall pay interest at the legal rate plus five percentage points on the sums he has not paid into an account.

 

TITLE II: Auditors

 

Article L820-1

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (2) Official Gazette of 16 May 2001)

 

(Law No 2003-706 of 1 August 2003 Article 99, Article 110 (1) Official Gazette of 2 August 2003)

 

Notwithstanding any provision to the contrary, Articles L. 225-227 to L. 225-242, as well as the provisions of the present Title, are applicable to auditors appointed in all legal entities regardless of the scope of their remit. They are also applicable to those persons, without prejudice to the specific rules which apply to them, regardless of their legal status.

The obligations imposed on chairmen of boards of directors, managing directors, directors, members of the executive board and managers of commercial companies are applicable to the management of legal entities which are required to have an auditor.

 

Article L820-2

 

(

(Law No 2001-420 of 15 May 2001 Article 113 (I) (2) Official Gazette of 16 May 2001)

 

(Law No 2003-706 of 1 August 2003 Article 99, Article 110 (2) Official Gazette of 2 August 2003)

 

No person who fails to meet the conditions laid down in Articles L. 225-227 to L. 225-242 and the provisions of the present Title may claim to be an auditor.

 

Article L820-3

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (2) Official Gazette of 16 May 2001)

 

(Law No 2003-706 of 1 August 2003 Article 99, Article 109 Official Gazette of 2 August 2003)

 

Prior to his appointment, the auditor shall write to the entity whose accounts he proposes to audit to tell it that he is a member of a national or international network which is not solely devoted to the legal auditing of accounts and whose members have a common financial interest. If applicable, he shall also inform it of the total amount of fees received by that network for services unconnected with auditing which were provided by that network to an entity controlled by or which controls, within the meaning of subparagraphs I and II of Article L. 233-3, the entity whose accounts the said auditor is proposing to audit. This information is included in the documents made available to shareholders pursuant to Article L. 225-108. After annual updating by the auditor, that information is made available to the partners and shareholders and, in the case of associations, to the members and donors, at the registered office of the entity whose accounts he audits.

The information regarding the amount of the fees paid to each auditor is available to the partners and shareholders and, in the case of associations, to the members and donors, at the controlled entity's registered office.

 

Article L820-4

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (2) Official Gazette of 16 May 2001)

 

(Law No 2000-916 of 19 September 2000 Article 3 Official Gazette of 22 September 2000 effective 1 January 2002)

 

(Law No 2003-706 of 1 August 2003 Article 99 Official Gazette of 2 August 2003)

 

Notwithstanding any provision to the contrary:

1. A penalty of two years' imprisonment and a fine of 30,000 euros (criminal penalties) are imposed on any executive of a legal entity required to have an auditor who fails to organise such an appointment or who fails to invite the auditor to any general meeting;

2. A penalty of five years' imprisonment and a fine of 75,000 euros are imposed on the executives of a legal entity or any person in the service of a legal entity required to have an auditor who obstructs the auditing or verification of the accounts by the auditors or other experts appointed pursuant to Articles L. 223-37 and L. 225-231, or who refuses to provide them, there and then, with all the items relevant to their mission and, in particular, any contracts, books, accounting documents and minute books.

 

Article L820-5

(Law No 2001-420 of 15 May 2001 Article 113 (I) (2) Official Gazette of 16 May 2001)

 

(Law No 2000-916 of 19 September 2000 Article 3 Official Gazette of 22 September 2000 effective 1 January 2002)

 

(Law No 2003-706 of 1 August 2003 Article 99 Official Gazette of 2 August 2003)

 

A penalty of one years' imprisonment and a fine of 15,000 euros (criminal penalties) are imposed on any person who:

1. Uses the designation "auditor", or any similar designation which might be confused with it, who is not duly registered as prescribed in subparagraph I of Article L. 225-219, and has not taken an oath in the manner stipulated in Article L. 225-223;

2. Illegally practises as an auditor in breach of the provisions of subparagraph I of Article L. 225-219 and Article L. 225-223 or those of any temporary ban or suspension.

Articles 226-3 and 226-14 of the Penal Code, relating to professional secrecy, are applicable to auditors.

 

Article L820-6

(Law No 2001-420 of 15 May 2001 Article 113 (I) (2) Official Gazette of 16 May 2001)

 

(Law No 2000-916 of 19 September 2000 Article 3 Official Gazette of 22 September 2000 effective 1 January 2002)

 

(Law No 2003-706 of 1 August 2003 Article 99 Official Gazette of 2 August 2003)

 

A penalty of six months' imprisonment and a fine of 7,500 euros (criminal penalties) are imposed on any person who, either on his own account, or as a partner in an auditing firm, accepts, performs or retains the functions of an auditor notwithstanding legal incompatibilities.

 

Article L820-7

 

(Law No 2001-420 of 15 May 2001 Article 113 (I) (2) Official Gazette of 16 May 2001)

 

(Law No 2000-916 of 19 September 2000 Article 3 Official Gazette of 22 September 2000 effective 1 January 2002)

 

(Law No 2003-706 of 1 August 2003 Article 99 Official Gazette of 2 August 2003)

 

A penalty of five years' imprisonment and a fine of 75,000 euros (criminal penalties) are imposed on any person who, either on his own account, or as a partner in an auditing firm, gives or confirms false information regarding a legal entity's position or who fails to disclose any criminal facts he is aware of to the Public Prosecutor.

 

Chapter I: Organisation and Monitoring of the Profession

 

 

Article L821-1

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

A High Council for Auditorship has been created by the Minister of Justice, with the following mission:

‑ to provide supervision for the profession with the support of the National Company of Auditors instituted by Article L. 821-6;

- to ensure respect for professional ethics and the independence of auditors.

Consistent with this mission, the High Council for Auditorship performs the following tasks, among others:

- to identify and promote good professional practices;

- to give an opinion on the rules of professional practice drafted by the National Company of Auditors prior to their approval via an order of the Minister of Justice;

- in its capacity as an appeals authority for decisions of the regional commissions referred to in Article L. 822-2, to effect registration of auditors;

- to determine the content of and framework for the periodic inspections provided for in Article L. 821-7 and to supervise their implementation and monitoring pursuant to Article L. 821-9;

- in its capacity as an appeals authority for decisions of the regional chambers referred to in Article L. 822-6, to deal with disciplinary issues relating to auditors.

 

 

Article L821-2

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

The opinion referred to in subparagraph six of Article 281-1 is accepted by the Minister of Justice after consultation with the Financial Markets Authority, the Banking Commission and the Supervisory Commission for general insurance companies, mutual insurance companies and provident societies whenever it pertains to their specific areas of responsibility.

 

 

Article L821-3

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

The composition of the High Council for Auditorship is as follows:

1. Three law officers, one of whom is a judge at the Court of Cassation, as chairman, a senior official of the Cour des Comptes, and a second Judge;

2. The chairman of the Financial Markets Authority or his representative, a representative of the Minister for the Economy and a university professor specialising in law, economics or finance;

3. Three persons qualified in economics and finance; two of whom are chosen for their expertise in the field of corporate public issues; the third is chosen for his expertise in the field of small and medium-sized enterprises, commercial private-law corporations or associations;

4. Three auditors, two of whom have experience of auditing the accounts of entities which launch public issues or appeals for public generosity.

The decisions are taken on a majority of the votes cast. In the event of a tied vote, the chairman has a casting vote.

The chairman and the members of the High Council for Auditorship are appointed by decree for renewable periods of six years. The composition of the High Council for Auditorship is renewed by half every three years.

The High Council for Auditorship forms specialised advisory committees from among its members to prepare its decisions and recommendations. Those committees may co-opt experts if necessary.

 

 

Article L821-4

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

The Minister of Justice appoints a government representative to the High Council for Auditorship. He sits on the Council with a right of discussion only. The government representative does not attend deliberations relating to disciplinary matters. In regard to other matters, he may request a second deliberation under terms and conditions determined in a Conseil d'Etat decree.

 

 

Article L821-5

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

The funds required to operate the High Council are charged to the budget of the Ministry of Justice.

 

 

Article L821-6

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

A National Company of Auditors, a public corporation with legal personality instituted under the aegis of the Minister of Justice and directed to the public benefit, is tasked with representing the auditing profession in its dealings with the public authorities.

It contributes to the promotion of proper practises in the profession, supervision thereof and the protection of the honour and independence of its members.

A Regional Company of Auditors having legal personality is instituted within the territorial jurisdiction of each court of appeal. The Minister of Justice may nevertheless constitute groupings based on a proposal from the National Company after the latter has consulted the Regional Companies concerned.

The resources of the National Company and the Regional Companies are provided mainly by an annual subscription collected from the auditors.

 

 

Article L821-7

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

While practising their profession, auditors are subject to:

a) The inspections referred to in Article L. 821-8;

b) Periodic checks organised on the basis of parameters defined by the High Council;

c) Occasional checks decided on by the national company or the regional companies.

 

 

Article L821-8

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

The Minister of Justice may launch immediate inspections and request the assistance of the Financial Markets Authority, the National Company of Auditors, the Banking Commission or the Commission for general insurance companies, mutual insurance companies and provident societies in connection therewith.

The Financial Markets Authority may immediately launch any inspection of an auditor of an entity which makes public issues or of a collective investment undertaking and request the assistance of the National Company of Auditors in connection therewith, and also, if appropriate, that of the authorities enumerated in subparagraph 2 of Article L. 621-9-2 of the Monetary and Financial Code. Neither the chairman of the Financial Markets Authority nor his representative shall sit on the High Council while any disciplinary proceedings resulting from such an inspection are in progress.

 

 

Article L821-9

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

The checks referred to in subparagraphs b) and c) of Article L. 821-7 are carried out by the national company or the regional companies.

When such checks relate to the auditors of entities that make public issues or of collective investment undertakings, they are carried out by the National Company with the assistance of the Financial markets Authority.

 

 

Article L821-10

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

When particularly serious facts come to light which would justify criminal or disciplinary penalties, the Minister of Justice may, from the inception of proceedings, when the urgent nature and the public interest warrant it, and when the person concerned has had an opportunity to present his observations, pronounce the temporary suspension of an auditor (natural person). The chairman of the Financial Markets Authority and the chairman of the National Company of Auditors may refer the matter to him.

The Minister of Justice may end the temporary suspension at his own discretion at any time at the request of the person concerned or of the authorities referred to in the first paragraph.

The temporary suspension ceases automatically and immediately upon closure of the criminal and disciplinary procedures.

 

 

Article L821-11

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

The implementing provisions for Articles L. 821-3 and L. 821-6 to L. 821-10 are determined in a Conseil d'Etat decree.

 

 

Article L821-12

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 100 Official Gazette of 2 August 2003)

 

Auditors are requested to provide all the information and documents requested of them when inspections and checks are carried out, without being able to invoke professional secrecy.

 

 

Subsection 1: Registration

 

 

Article L822-1

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 101, Article 102, Article 103, Official Gazette of 2 August 2003)

 

No person shall practice as an auditor without prior registration on a list established for that purpose.

 

 

Article L822-2

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 101, Article 102, Article 103, Official Gazette of 2 August 2003)

 

A Regional Registration Commission is established at the main facility of each court of appeal. It compiles and revises the list referred to in Article L. 822-1.

Each Regional Registration Commission is composed of:

1. A judge acting as chairman;

2. A senior official of the Chambre Régionale des Comptes;

3. A university professor specialising in law, economics or finance;

4. Two persons qualified in law, economics or finance;

5. A representative of the Minister for the Economy;

6. A member of the Regional Company of Auditors.

The chairman and members of the Regional Registration Commission, and their deputies, are appointed by a decree of the Minister of Justice for a renewable period of three years.

The decisions are taken on a majority of the votes cast. In the event of a tied vote, the chairman has a casting vote.

Appeals against the decisions of the Regional Registration Commissions are brought before the High Council for Auditorship.

 

 

Article L822-3

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 101, Article 102, Article 103, Official Gazette of 2 August 2003)

 

Every auditor must go before the court of appeal within whose jurisdiction he practices to swear to fulfil the duties of his profession with honour, probity and independence, and to respect, and impose respect for, the laws.

 

 

Article L822-4

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 101, Article 102, Article 103, Official Gazette of 2 August 2003)

 

Any person registered pursuant to Article L. 822-1 who has not practised as an auditor for three years is required to take a special part-time training course before accepting an auditing mission.

 

 

Article L822-5

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 101, Article 102, Article 103, Official Gazette of 2 August 2003)

 

The implementing provisions of the present subsection are determined in a Conseil d'Etat decree.

 

 

Subsection 2: Discipline

 

 

Article L822-6

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 101, Article 102, Article 103, Official Gazette of 2 August 2003)

 

The Regional Registration Commission, sitting as a Regional Disciplinary Chamber, is competent to judge a disciplinary action brought against an auditor who is a member of a regional company, regardless of the place in which the misconduct with which he is charged is alleged to have taken place.

 

 

Article L822-7

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 101, Article 102, Article 103, Official Gazette of 2 August 2003)

 

Cases may be referred to the Regional Disciplinary Chamber by the Minister of Justice, the Public Prosecutor, the Chairman of the National Company of Auditors or the chairman of the Regional Company.

In addition to the persons determined in a Conseil d'Etat decree, the chairman of the Financial Markets Authority may refer cases pertaining to disciplinary action to the Principal State Prosecutor. When he has exercised that right, he is not entitled to sit on the disciplinary bench of the High Council hearing the same proceedings.

The decisions of the Regional Disciplinary Chamber are appealable before the High Council for Auditorship at the initiative of the authorities referred to in the present Article and the professional concerned.

A judge, appointed by the Minister of Justice, attached to the Principal State Prosecutor's Office or the Public Prosecutor's Office, exercises the Public Prosecutor's functions for each Regional Chamber and the High Council in regard to disciplinary matters.

The present Article's implementing provisions are determined in a Conseil d'Etat decree.

Article L. 822-8. - The disciplinary penalties are:

1. A warning;

2. A reprimand;

3. A temporary ban of up to five years;

4. Removal from the list.

Honorary titles may also be withdrawn.

A warning, a reprimand or a temporary ban may be accompanied by the additional penalty of ineligibility for membership of professional bodies for a maximum of ten years.

A temporary ban may be pronounced with suspended effect. The suspension of the penalty does not extend to any additional penalty imposed pursuant to the previous paragraph. If the auditor commits a breach or an offence which results in the application of a further disciplinary penalty within five years of the penalty being pronounced, this shall, barring a reasoned decision to the contrary, give rise to execution of the first penalty without any prospect of concurrency with the second.

When they pronounce a disciplinary penalty, the High Council and the Regional Chambers may decide to make the auditor liable for payment of some or all of the costs incurred through carrying out the inspections or verifications which enabled the penalised misconduct to be established.

 

 

Article L822-8

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 101, Article 102, Article 103, Official Gazette of 2 August 2003)

 

- The disciplinary penalties are:

1. A warning;

2. A reprimand;

3. A temporary ban of up to five years;

4. Removal from the list.

Honorary titles may also be withdrawn.

A warning, a reprimand or a temporary ban may be accompanied by the additional penalty of ineligibility for membership of professional bodies for a maximum of ten years.

A temporary ban may be pronounced with suspended effect. The suspension of the penalty does not extend to any additional penalty imposed pursuant to the previous paragraph. If the auditor commits a breach or an offence which results in the application of a further disciplinary penalty within five years of the penalty being pronounced, this shall, barring a reasoned decision to the contrary, give rise to execution of the first penalty without any prospect of concurrency with the second.

When they pronounce a disciplinary penalty, the High Council and the Regional Chambers may decide to make the auditor liable for payment of some or all of the costs incurred through carrying out the inspections or verifications which enabled the penalised misconduct to be established.

 

 

Section 2: Ethics and Independence of Auditors

 

 

Article L822-9

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 104 (I) Official Gazette of 2 August 2003)

 

The auditing profession is practised by natural persons or by firms created by such persons in whatever form.

Three quarters of an auditing firm's capital shares must be held by auditors. When an auditing firm has an equity interest in another auditing firm, shareholders or partners who are not auditors cannot hold more than 25% of the total of the two firms' capital shares. The posts of chief executive, chairman of the board of directors or of the executive board, chairman of the supervisory board and general manager must be held by auditors. At least three quarters of the members of the management, administrative and supervisory structures and at least three quarters of the shareholders or partners must be auditors. The permanent representatives of auditing firms, whether partners or shareholders, must be auditors.

In registered auditing firms, the auditing functions are performed, on behalf of the firm, by natural-person auditors who are partners, shareholders or executives of that firm. Those persons can only perform auditing functions for one auditing firm. The members of the board of directors or of the supervisory board can be employees of the company without limitation in terms of number or conditions of seniority being applied to employee status.

In the event of the decease of an auditor who is a shareholder or a partner, his beneficiaries have two years in which to sell their shares to an auditor.

The admission of any new shareholder is subject to prior approval which, under the terms and conditions of the memorandum and articles of association, can be given either by a general meeting of shareholders or partners, or by the board of directors or the supervisory board or the management, as applicable.

Notwithstanding these provisions, these functions may be performed concurrently within one auditing firm and a second auditing firm in which the first firm holds more than half of the share capital or if at least half of the partners of the two firms are common to both.

 

 

Article L822-10

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 104 (I) Official Gazette of 2 August 2003)

 

The functions of an auditor are incompatible with:

1. Any activity or any act likely to jeopardise his independence;

2. Any paid employment; an auditor may nevertheless provide training associated with the practising of his profession or occupy a remunerated post in an auditing firm or an accounting firm;

3. Any commercial activity, whether conducted directly or through an intermediary.

 

 

Article L822-11

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 104 (II) Official Gazette of 2 August 2003)

 

I - An auditor shall not directly or indirectly take, receive or retain an interest in an entity whose accounts he audits, or in an entity which controls that entity or is controlled by it within the meaning of subparagraphs I and II of Article L. 233-3.

Without prejudice to the provisions of the present Book or those of Book II, the code of ethics referred to in Article L. 822-16 defines the concomitant or prior personal, financial and professional connections which are incompatible with the auditor's mission. It specifies, among other things, the situations in which the auditor's independence is affected when he belongs to a national or international multidisciplinary network whose members have a common economic interest through the provision of services to an entity which is controlled by or which controls, within the meaning of subparagraphs I and II of Article L. 233-3, the entity whose accounts are audited by the said auditor. The code of ethics also specifies the limitations that must be applied to the holding of financial interests by the auditor's employees and associates in the companies whose accounts he audits.

II. - Auditors are prohibited from providing any advice or other service to the person who entrusts them with the auditing of their accounts, or to the persons who control that person within the meaning of subparagraphs I and II of that same Article, which is unrelated to the formalities having direct relevance to their auditing task as defined in the standards of professional practice referred to in the sixth paragraph of Article L. 821-1.

When an auditor is affiliated to a national or international network whose members have a common economic interest and which is not exclusively involved in the legal auditing of accounts, he cannot audit the accounts of an entity which, by virtue of a contract entered into with that network or with a member of that network, benefits from a provision of services which are not directly linked to the auditor's mission according to the assessment made by the High Council for Auditorship pursuant to the third paragraph of Article 821-1.

 

 

Article L822-12

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 104 (II) Official Gazette of 2 August 2003)

 

Individual auditors and signing members of an auditing firm cannot be appointed as directors or employees of a company they have audited until five years have elapsed since they last audited that company.

During that same period, they cannot perform those functions in a legal entity which controls or is controlled, within the meaning of subparagraphs I and II of Article L. 233-3, by the company whose accounts they audited.

 

 

Article L822-13

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 104 (II) Official Gazette of 2 August 2003)

 

Persons who have been directors or employees of a legal entity cannot be appointed as auditors of that legal entity until five years have elapsed since they were employed by that company.

During that same period, they cannot be appointed as auditors of legal entities which hold at least 10% of the capital of the legal entity in which they performed their functions, or which held at least 10% of the capital when those functions ceased.

The prohibitions provided for in the present Article for the persons referred to in the first paragraph are applicable to auditing firms in which the said persons are partners, shareholders or executives.

 

 

Article L822-14

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 104 (II) Official Gazette of 2 August 2003)

 

Individual auditors and signing members of auditing firms are prohibited from auditing the accounts of legal entities which make public issues for more than six consecutive financial years.

This provision also applies to the legal entities referred to in Article 612-1 and the associations referred to in Article L. 612-4, when such legal entities make appeals for public generosity.

 

 

Article L822-15

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 104 (II) Official Gazette of 2 August 2003)

 

Without prejudice to the provisions of Article L. 225-240 of the special legislative provisions, auditors, and their associates and experts, are bound by professional secrecy in regard to any facts, acts and information they have knowledge of on account of their functions.

When a legal entity prepares consolidated accounts, the auditors of the consolidating legal entity and the auditors of the consolidated entities are, in respect of each other, released from professional secrecy. These provisions also apply when an entity prepares combined accounts.

 

 

Article L822-16

 

(inserted by Law No. 2003-706 of 1 August 2003 Article 104 (II) Official Gazette of 2 August 2003)

 

A Conseil d'Etat decree approves a code of ethics for the profession after seeking the advice of the High Council for Auditorship and, for the provisions which apply to auditors who act for entities that make public issues, the Financial Markets Authority.

 

 

BOOK IX

Provisions relating to overseas

 

TITLE I: Provisions specific to Saint-Pierre-et-Miquelon

 

Article L910-1

 

The following Articles shall not apply to Saint-Pierre-et-Miquelon:

1.  L. 125-3, L. 126-1.

2.  L. 252-1 to L. 252-13.

3.  L. 470-6.

4.  L. 522-1 to L. 522-40 and L. 524-20.

5.  L. 711-5, L. 711-9, L. 720-1 to L. 730-17.

 

 

Article L910-2

 

The terms set out below shall be replaced as follows for the purpose of the application of this Code to Saint-Pierre-et-Miquelon:

1.  "Tribunal de grande instance" or "tribunal d'instance" by "court of first instance".

2.  "Tribunal de commerce" or "lay commercial judge" by "court of first instance ruling on commercial matters".

3.  "Department" or "district" by "territorial authority".

4.  "Official Gazette of Civil and Commercial Announcements" by "Records of administrative deeds of the territorial authority".

 

 

Article L910-3

 

References in the provisions of this Code applicable to Saint-Pierre-et-Miquelon to other Articles of this Code shall only refer to the Articles made applicable to the authority with the changes for which provision is made in the following chapters.

 

 

Article L910-4

 

Where no changes are made, references in the provisions of this Code applicable to Saint-Pierre-et-Miquelon to provisions which do not apply to it shall be replaced by references to local provisions which serve the same purpose.

 

 

Article L910-5

 

Articles which refer to the European Community shall apply in accordance with the association decision for which provision is made in Article 136 of the Treaty establishing the European Community.  References to the agreement on the European Economic Area shall not apply.

 

 

Chapter I: Provisions adapting Book I

 

Article L911-1

 

In Article L. 122-1, the words "by the prefect of the department in which the foreigner is to conduct his business" shall be replaced by the words "by the prefect of the authority if the foreigner is to conduct his business there".

 

 

Article L911-2

 

The exemptions for which provision is made in Articles L. 123-25 to L. 123-27 shall apply to natural persons subject to a simplified taxation system under regulations in force in Saint-Pierre-et-Miquelon.

 

 

Article L911-3

 

In Article L. 133-7, the words "customs duty, tax, expenses and fines connected with a transport operation" shall be deleted.

 

 

Article L911-4

 

Registration with the registry of the court of first instance ruling on commercial matters shall exempt deeds and declarations submitted to it in application of Article L. 141-5 from the need to be formally recorded.

 

 

Article L911-5

 

For the purpose of Articles L. 141-15, L. 143-7 and L. 145-28, a magistrate of the court of first instance may be delegated by the president.

 

 

Article L911-6

 

In Article L. 141-13, the words "by Articles 638 and 653 of the General Tax Code" shall be replaced by the words "by the provisions of local tax laws".

 

 

Article L911-7

 

In Article L. 144-5, the words "Articles L. 3211-2 and L. 3212-1 to L. 3212-12 of the Public Health Code" shall be replaced by the words "the Articles of the public health Code applicable locally to hospitalisation or confinement with or without the consent of the interested party".

 

 

Article L911-8

 

 

 (Law No 2003-7 of 3 January 2003 Article 50 (II) Official Gazette of 4 January 2003)

 

Article L. 145-2 is modified as follows:

I. - In 4, the words: "to the State, to the departments, to the communes, to the public institutions" are replaced with the words "to the State, to the territorial authorities and to the public institutions";

II. - In 6, the words "to the social security fund of the Maison des Artistes et reconnus auteurs d'œuvres graphiques et plastiques, as defined in Article 71 of Annex III of the General Tax Code" are replaced with the words "to the local social security fund for the creators of graphic and plastic arts, as defined in the tax code applicable in the territory".

 

Article L911-9

 

For the purpose of Article L. 145-6, the words "evacuation of the premises included in a sector or perimeter for which provision is made in Articles L. 313-3 and L. 313-4 of the Town Planning Code" shall be replaced by the words "evacuation of the premises for which provision is made in Article L. 145-18".

 

 

 Article L911-10

 

In Article L. 145-13, the words "subject to the provisions of the law of 28 May 1943 on the application to foreigners of legislation governing residential leases and farming leases" shall be deleted.

 

 

Article L911-11

 

The second sub-paragraph of Article L. 145-18 shall be worded as follows:

"The same shall apply for the purpose of restoring buildings involving repair, conservation, modernisation or demolition work which changes the living conditions of a set of buildings so that the premises have to be evacuated.  Such work may be decided and carried out in accordance with local regulations either by the public authorities with local jurisdiction or at the initiative of one or more owners who may but need not have form a freeholders' association, in which case the owner or owners shall be specially authorised to do so on terms laid down by the state representative, who shall stipulate the commitments which owners must make as to the type and extent of the work.

Buildings acquired by developers shall only be assigned by mutual agreement, once they have been restored, in accordance with the type specifications approved by the state representative."

 

 

Article L911-12

 

In Article L. 145-26, the words "and the territorial authority" shall be inserted after the words "to the state, the departments, the municipalities".

 

Article L911-13

 

The first sub-paragraph of Article L. 145-34 shall be worded as follows:

"Unless the factors which determine the rental value change significantly, the variation in the rent applicable when the lease for renewal takes effect, provided that it is for no longer than nine years, shall not exceed the variation in a local quarterly construction cost index since the rent for the expired lease was originally set.  This index shall be calculated in accordance with the terms of an order issued by the state representative.  If there is no clause in the contract stipulating the reference quarter for the index, the variation in the local quarterly construction index set for the purpose by the aforementioned order shall be used."

 

 

Article L911-14

 

Article L. 145-35 shall be amended as follows:

I. – In the first sub-paragraph, the word "departmental" shall be deleted.

II. – The final sub-paragraph shall be worded as follows:

"The composition of the committee and the method of appointing the members and the rules of procedure thereof shall be decided by order of the state representative."

 

 

 

Chapter II: Provisions adapting Book II

 

Article L912-1

 

In Articles L. 225-36 and L. 225-65, the words "in the same department or a neighbouring department" shall be replaced by the words "in the authority".

 

 

Article L912-2

 

The final sub-paragraph of Article L. 225-43 and of Article L. 225-91 shall be deleted.

 

 

Article L912-3

 

In the second sub-paragraph of Article L. 225-102, the words "and by the salaried employees of a workers' cooperative as defined in Law No 78-763 of 19 July 1978 on the status of workers' cooperatives" shall be deleted.

 

 

Article L912-4

 

In Article L. 225-115 (5), the words "referred to in Article 238(a) AA of the General Tax Code" shall be replaced by the words "as set out in the provisions of the local tax Code applicable to total deductions from the taxable profit of companies which make payments for the benefit of works by bodies of general interest or authorised companies or donations of works of art to the state."

 

 

Article L912-5

 

In Article L. 225-196 IV, the words "calculating national insurance contributions" shall be replaced by the words "calculating national insurance contributions payable under the local social security system".

 

 

Article L912-6

 

In Article L. 225-270 VI, the words "the provisions of Article 94 A of the General Tax Code" shall be replaced by the words "the provisions of the local tax Code applicable to net capital gains from disposals for money consideration of securities and corporate rights".

 

 

Chapter III: Provisions adapting Book III

 

Article L913-1

 

The second sub-paragraph of Article L. 322-9 shall be worded as follows:

"They shall comply with the provisions of the local tax Code applicable to public sales and auctions."

 

 

Chapter IV: Provisions adapting Book IV

 

Article L914-1

 

In the second sub-paragraph of Article L. 442-2 the word "any" shall be inserted before the words "turnover taxes".

 

 

Article L914-2

 

Article L. 443-1 shall be amended as follows:

I. – In no. 3, the words "Article 403 of the General Tax Code" shall be replaced by the words "by the provisions of the local tax Code".

II. – No. 4 shall be worded as follows:

"4.  "Seventy-five days from delivery for purchases of alcoholic beverages liable for the circulation taxes for which provision is made in the local tax Code".

 

 

Chapter V: Provisions adapting Book V

 

Article L915-1

 

The second sub-paragraph of Article L. 511-62 shall read as follows:

"The withdrawal shall include the sums referred to in Articles L. 511-45 and L. 511-46, in addition to any brokerage fees or stamp duty for which provision is made in the local tax Code."

 

 

Article L915-2

 

The first sub-paragraph of Article L. 524-19 shall be worded as follows:

"The duty to be collected by the clerk of the court of first instance ruling on commercial matters shall be set by decree."

 

 

Article L915-3

 

In the first sub-paragraph of Article L. 525-2, the words "according to local regulations" shall be inserted after the words "the fixed duty".

 

 

Article L915-4

 

In Article L. 525-9 II, the words "the preferential right referred to in Article L. 243-4 of the Social Security Code" shall be replaced by the words "the preferential right organised for the benefit of the social welfare fund of the territorial authority".

 

 

Article L915-5

 

Article L. 525-18 shall be amended as follows:

I. – In no. 1, the reference to decree no. 53-968 of 30 September 1953 shall be replaced by a reference to decree no. 55-639 of 20 May 1955.

II. – No. 2 shall be worded as follows:

"Ocean-going ships."

 

 

Chapter VI: Provisions adapting Book VI 

 

Article L917-1

 

In Articles L. 711-2 and 711-4, the word "government" shall be replaced by the words "state representative to the authority".

 

 

Article L917-2

 

In the third sub-paragraph of Article L. 711-6, the words "or the municipality" shall be replaced by the words "the municipality or authority".

 

 

Article L917-3

 

In Article L. 711-7, the words "as defined in and for the purpose of Article L. 961-10 of the Employment Code" shall be deleted.

 

 

Article L917-4

 

In Article L. 712-1, the words "by means of a tax in addition to the business tax" shall be replaced by the words "as set out in the local tax Code".

 

 

 

TITLE II: Provisions applicable to Mayotte

 

Article L920-1

 

(Law No 2003-710 of 1 August 2003 Article 38 (II) Official Gazette of 2 August 2003)

 

Without prejudice to the adaptations provided for in the Chapters hereunder, the following provisions of the present code are applicable in Mayotte:

1. Book I, with the exception of Articles L. 125-3, L. 126-1;

2. Book II, with the exception of Articles L. 252-1 to L. 252-13;

3. Book III, with the exception of Articles L. 321-1 to L. 321-38;

4. Book IV, with the exception of Articles L. 441-1, L. 442-1 and L. 470-6;

5. Book V, with the exception of Articles L. 522-1 to L. 522-40, L. 524-12, L. 524-20 and L. 524-21;

6. Book VI, with the exception of Articles L. 621-38, L. 621-132 and L. 628-1 to L. 628-8;

7. Book VIII.

 

Article L920-2

 

The terms set out below shall be replaced as follows for the purpose of the application of this Code to the authority:

1.  "Tribunal de grande instance" or "tribunal d'instance" by "court of first instance".

2.  "Tribunal de commerce" or "lay commercial judge" by "court of first instance ruling on commercial matters".

3.  "Conseil de prud'hommes" by "employment tribunal".

4.  "Department" or "district" by "territorial authority".

4.  "Official Gazette of Civil and Commercial Announcements" by "Records of administrative deeds of the territorial authority".

 

 

Article L920-3

 

References in the provisions of this Code applicable to Mayotte to other Articles of this Code shall only refer to the Articles made applicable to the authority with the changes for which provision is made in the following chapters.

 

 

Article L920-4

 

Where no changes are made, references in the provisions of this Code applicable to Mayotte to provisions which do not apply to it shall be replaced by references to local provisions which serve the same purpose.

 

 

Article L920-5

 

References in the provisions of this Code applicable to Mayotte to provisions of the Employment Code shall only apply there if there is a provision applicable locally which serves the same purpose.

 

 

Article L920-6

 

References to registration in the trades register shall be replaced by references to registration in accordance with regulations applicable to Mayotte.

 

 

Article L920-7

 

Articles which refer to the European Community shall apply in accordance with the association decision for which provision is made in Article 136 of the Treaty establishing the European Community.  References to the agreement on the European Economic Area shall not apply.

 

 

Chapter I: Provisions adapting Book I

 

Article L921-1

 

In Article L. 122-1, the words "by the prefect of the department in which the foreigner is to conduct his business" shall be replaced by the words "by the prefect of the authority if the foreigner is to conduct his business there".

 

 

Article L921-2

 

The exemptions for which provision is made in Articles L. 123-25 to L. 123-27 shall apply to natural persons subject to a simplified taxation system under regulations in force in Mayotte.

 

 

Article L921-3

 

In Article L. 133-6, the words "those which derive from the provisions of Article 1269 of the New Code of Civil Procedure" shall be replaced by the words "claims for accounts to be revised and proceeds to be settled which are presented with a view to adjustment in the event of error, omission or inaccurate presentation".

 

 

Article L921-4

 

In Article L. 133-7, the words "customs duty, tax, expenses and fines connected with a transport operation" shall be deleted.

 

 

Article L921-5

 

For the purpose of Articles L. 141-15, L. 143-7, L. 144-1 to L. 144-13 and L. 145-28, a magistrate of the court of first instance may be delegated by the president.

 

 

Article L921-6

 

In Article L. 141-13, the words "of the return prescribed by Articles 638 and 653 of the General Tax Code" shall be replaced by the words "of the return prescribed by the provisions of local tax laws".

 

 

Article L921-7

 

In Article L. 144-5, the words "Articles L. 3211-2 and L. 3212-1 to L. 3212-12 of the Public Health Code" shall be replaced by the words "the Articles of the public health Code applicable in the authority to hospitalisation or confinement with or without the consent of the interested party".

 

 

Article L921-8

 

(Law No 2003-7 of 3 January 2003 Article 50 (II) Official Gazette of 4 January 2003)

 

Article L. 145-2 is modified as follows:

I. - In 4, the words: "to the State, to the departments, to the communes, to the public institutions" are replaced with the words "to the State, to the territorial authorities and to the public institutions";

II. - In 6, the words "to the social security fund of the Maison des Artistes et reconnus auteurs d'œuvres graphiques et plastiques, as defined in Article 71 of Annex III of the General Tax Code" are replaced with the words "to the local social security fund for the creators of graphic and plastic arts, as defined in the tax code applicable in the territory".

 

Article L921-9

 

For the purpose of Article L. 145-6, the words "evacuation of the premises included in a sector or perimeter for which provision is made in Articles L. 313-3 and L. 313-4 of the Town Planning Code" shall be replaced by the words "evacuation of the premises for which provision is made in Article L. 145-18".

 

 

 Article L921-10

 

In Article L. 145-13, the words "subject to the provisions of the law of 28 May 1943 on the application to foreigners of legislation governing residential leases and farming leases" shall be deleted.

 

 

Article L921-11

 

The second sub-paragraph of Article L. 145-18 shall be worded as follows:<