You’re a new entrepreneur, you’ve started or are about to start the formalities for setting up your company, and don’t intend to wait for your KBIS to be issued before starting your business. Your first acts will often be to sign a commercial lease, transfer a business or create a website. How do you sign a contract for a company that doesn’t yet exist?
1. Legal personality, a prerequisite for signing contracts
In order to conclude an act, it is mandatory to have the “capacity” to conclude an act. This capacity derives, among other things, from the fact of having legal personality. Two types of persons have legal personality: natural persons and legal entities.
The French Commercial Code contains an article which states that “commercial companies have legal personality from the date of their registration in the Trade and Companies Register”.
This means that your new company will only be able to enter into contracts once it has been registered with the RCS.
So how do you go about concluding deeds for your professional activity while you’re waiting for your company to be registered with the RCS?
2. The mechanism for taking over deeds concluded on behalf of a company in formation
If you want to sign a deed for your professional activity before your company is registered, you must sign in your own name and add the words “in the name and on behalf of the company”.
The more precise, the better. If you already know them, you can indicate the registered office, the amount of capital, etc.
Secondly, Article 1843 of the French Civil Code provides that “a company duly registered may take over the commitments entered into, which are then deemed to have been entered into by the company from the outset”.
These deeds will therefore be appended to the Articles of Association, and the signing of these by the partners will entail the assumption of these commitments by the company once it has been registered.
However, Article 1843 also stipulates that “persons who have acted on behalf of a company in formation before registration are liable for the obligations arising from the acts thus performed, with joint and several liability if the company is a commercial one, without joint and several liability in other cases”. If, for example, the commercial company fails to pay its rent under the commercial lease, the person who signed the deed may be liable.
3. Poorly drafted contracts: beware of penalties
What are the consequences of not complying with this precise formalism?
Without such formalities, the deed will be deemed to have been concluded by the company itself, even though it does not yet have the legal personality to enter into contracts.
The deed will therefore be absolutely null and void, with two consequences:
- This nullity may be invoked by any interested party, in particular by a co-contractor wishing to withdraw abruptly.
- The deed will not be subject to confirmation or ratification, and regular execution of the deed will not prevent this.
Many companies in the process of forming do without legal advice, or have their deeds drawn up by their real estate agent or chartered accountant. Legal errors in deeds are often revealed months or years later, and can become a real legal problem (cancellation of the lease, personal liability of the signatory, etc.). We strongly advise you to seek the assistance of a legal professional.
Please do not hesitate to contact our law firm DESRUMAUX AVOCATS so that we can help you in your efforts.
