participating company
LexInter | May 22, 2012 | 0 Comments

PARTICIPATING COMPANY

The joint venture is governed and governed by the Civil Code articles 1871 to 1873) .

There is a joint venture as soon as several people agree to create a company but deliberately refrain from registering it. The joint venture is therefore not granted legal personality.

 Unlike the regime prior to 1978, the joint venture is no longer necessarily a company which “ does not reveal itself to third parties ”. Alongside traditional joint ventures not disclosed to third parties, there may be ” ostensible ” joint ventures in which the existence of the company is disclosed to third parties.

The joint venture can be civil or commercial. It is characterized by the simplicity of the incorporation formalities (drafting of articles of association) and the flexibility in its operation.

A joint venture can be made up either of individuals, legal entities, private law (SARL, SNC, SAS, etc.) or public law. , or both (natural and legal persons).

There are no conditions required to create a joint venture company, nor to be the manager, except when it is prohibited to manage. The joint-venture company is not registered in the trade register and the partners do not have to be individually registered in the trade register either.

A social pact must be established, the joint venture results from a contract, its statutes. There is no minimum capital imposed, but each partner, as in all forms of company, must make contributions. The joint venture is based on  the desire to join forces to share the cost and any gains (

Cass. Civ. 1, January 14, 2003 )
A joint venture can be created to carry out a common project, for a commercial operation, the launch of a new product, for a given period.

It can be used to operate just about any day-to-day business except those that are strictly regulated [at least if not all members are engaged in that regulated activity].

Activities can be civil or commercial. If they are civil, it is the rules of civil partnerships that apply, if it is commercial, the rules of general partnerships apply.

The joint venture can have a maximum duration of 99 years.

The partners are not known to third parties, neither to the trade register, nor to any member of the public, nor to administrations (except tax) since the articles of association are not published. Only the manager is known and must have the capacity to be a trader.

The other partners can be of any nationality. They can be natural persons, or legal entities (companies).

As in other legal forms (apart from SARL, SAS and SA), the liability of the partners is proportional to the number of shares each has. Losses or profits will therefore be distributed according to the number of shares.

It is the manager who is responsible for social charges.

PROVISIONS OF THE CIVIL CODE CONCERNING THE PARTICIPATING COMPANY

Article 1871
The partners can agree that the company will not be registered . The company is then said to be a “joint venture”. It is not a legal person and is not subject to publicity. It can be proven by any means.

The partners freely agree on the object, operation and conditions of the joint venture, subject to not derogating from the mandatory provisions of articles 1832, 1832-1, 1833, 1836 (2 nd paragraph), 1841, 1844 ( 1st paragraph) and 1844-1 (2nd paragraph).

Article 1871-1
Unless a different organization has been provided for, the relations between partners are governed, as a matter of reason, either by the provisions applicable to civil companies, if the company has a civil character, or, if it has a civil character. commercial, by those applicable to general partnerships.
Article 1872
With regard to third parties, each partner remains the owner of the goods that he makes available to the company.
Assets acquired by use or reinvestment of undivided funds during the term of the company and those which were undivided before being made available to the company are deemed to be undivided between the partners.
It is the same for those that the partners would have agreed to put in joint possession.
It may also be agreed that one of the partners is, with regard to third parties, the owner of all or part of the property that he acquires with a view to achieving the corporate purpose.
Article 1872-1
Each partner contracts in his own name and is solely responsible for third parties.
However, if the participants act as partners in the sight and knowledge of third parties, each of them is bound to them by the obligations arising from acts performed in this capacity by one of the others, with solidarity, if the company is commercial, without solidarity in other cases.
The same is true of the partner who, by his interference, led the co-contracting party to believe that he intended to commit to him, or whose engagement has been proven to have turned to his benefit.
In all cases, with regard to property deemed undivided in application of article 1872 (paragraphs 2 and 3), are applicable in relations with third parties, i.e. the provisions of Chapter VI of Title I of Book III of this present document. code, or, if the formalities provided for in article 1873-2 have been completed, those of Title IX bis of this book, all the partners then being, unless otherwise agreed, deemed to be managers of the joint possession.
Article 1872-2
When the joint venture is for an indefinite period, its dissolution may result at any time from a notification sent by one of them to all the partners, provided that this notification is in good faith, and not made out of time. .
Unless otherwise agreed, no partner may request the partition of undivided property under article 1872 as long as the company is not dissolved.
Article 1873
The provisions of this chapter are applicable to de facto companies.

 

A joint venture, not being a legal person, cannot be a creditor of an obligation ( Cass. Com. May 20, 2008)

in joint ventures, each partner contracts in his own name and is the only one committed to third parties; that it is however different if the participants act as a partner with the knowledge of third parties or if a partner has, by his interference, led the co-contracting party to believe that he intended to commit to him  Cass. com. November 26, 1996

because of the very nature of the lottery ticket, which is based on the chances of winning and the risks of loss, it is still in the exercise of its sovereign power that the court of appeal, after having noted the purchase in common, constitutive of a contribution, deduced from it the will to join together for a sharing of the cost and the possible gains  Cass. civ. 1 January 14, 2003

” having noted that each participation in losses was payable as soon as the accounts were approved by the shareholders’ meeting, from which it follows that depending, on the one hand, on the possibility of the existence of losses during the exercise and, on the other hand, of the approval of the accounts by the said assembly, the debt of contribution to the losses of each partner was indeterminate and did not meet the condition of periodicity to which the application of article is subject. 2277 of the Civil Code, the Court of Appeal made the exact application of this text;

Whereas, in the second place, having, on the one hand, noted that under the terms of the social pact the partners of the joint venture had agreed to bear directly and in proportion to their respective rights the losses that occur and that these losses were recorded annually, for the amount of their share, in the current account of the partners, and on the other hand, noted that the valuation invoked in the alternative by the company Molinier Finances corresponded to the annual valuation of the value of the rights of the joint-venture company, provided for in article 9 of the social pact, this valuation being determined from the arithmetic mean between the value of the real net assets and the profitability value, from which it follows that the contribution to losses by the partners was independent of the assessment of the value of the rights of each partner in the joint venture, the court of appeal was able to rule as it did  Cass. com. February 22, 2005

RESPONSIBILITY OF MEMBERS OF A PARTICIPATING COMPANY

if under the terms of article 1872-1, paragraph 2, of the Civil Code, the members of a joint-venture company, who act as partners in the sight and knowledge of third parties, are bound with regard to those – here of the obligations born from the acts accomplished by one of the others, it is on the condition that this one has accomplished them in this capacity Cass. com. January 13, 1998

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