A French company can become unable to pay its debts even when its director, shareholders and finance team are outside France. A foreign address does not stop the French insolvency timetable, and it does not turn an urgent cash crisis into an ordinary company closure. The practical question is whether the company has entered cessation des paiements: the legal condition in which due liabilities cannot be paid with immediately available assets. Once that condition is established, the representative must choose between a protective or recovery-oriented proceeding and liquidation, while respecting a short statutory deadline.
This guide addresses a French subsidiary, a French operating company and the French establishment of a foreign group. It explains how a foreign director can prepare a filing from abroad, which court may be competent, what evidence should accompany the declaration, and how a French proceeding interacts with a foreign main proceeding. It also separates company-level consequences from personal exposure. The procedure is technical, but the first response is operational: freeze the cash position, identify the exact date of non-payment, preserve the evidence, and obtain a French procedural assessment before the 45-day period expires.
The focus is a transaction-ready question: what should a foreign founder or director do when a French company cannot pay suppliers, the tax authorities, social-security contributions or employees? A foreign parent may be able to support the company, but a promise of funding is not the same as immediately available cash. The analysis below should be read with the company’s articles, contracts, banking evidence, accounting records and group structure. A broader overview of the firm’s cross-border corporate work is available on the French corporate and international business law page.
I. Can a foreign director file French company insolvency proceedings from abroad?
A. How do you prove that a French company is in cessation des paiements?
The starting point is the statutory payment test, not the nationality of the director and not the fact that the company still owns assets. Article L. 631-1 of the French Commercial Code describes the debtor in this condition as one that is « dans l’impossibilité de faire face au passif exigible avec son actif disponible ». In English, the test compares liabilities that are due and payable with assets that can be mobilised immediately. It is a cash-flow test with a legal vocabulary, rather than a simple comparison between total assets and total liabilities.
Passif exigible means debts that have fallen due and can be demanded. It may include an unpaid invoice, a due bank instalment, a tax balance, social-security contributions collected by URSSAF, wages, rent or a contractual amount that is no longer subject to a genuine dispute. Actif disponible means cash and other funds that can actually be used promptly: bank balances, cash equivalents and, depending on the circumstances, receivables that are certain, liquid and immediately collectable. A building, a long-term investment, stock that cannot be sold quickly or a foreign parent’s uncommitted intention to inject money is not automatically available cash.
The same provision recognises that the existence of credit reserves or payment moratoria can change the result. A signed and usable credit line, a confirmed bank facility or a binding payment agreement may show that the company can meet its due liabilities. A conversation with a parent company, an unsigned term sheet or a possible future capital increase does not provide the same protection. The evidence must show when the funds could be drawn, in what amount, on what conditions and whether the lender could withdraw or refuse the facility.
A foreign director should therefore prepare a daily or weekly cash bridge. Start with every French and foreign account that the French company can legally use. Record the balance, currency, bank restrictions, overdraft limit, blocked funds and the date on which each amount can be transferred. Then list due debts by creditor, amount, due date, dispute status and enforcement risk. Separate debts of the French company from debts of the foreign parent. A group guarantee, intercompany account or director’s personal guarantee may affect negotiations, but it does not merge the companies’ assets for the initial payment test.
The date matters. The tribunal may later determine a date of cessation des paiements that is earlier than the filing date. Article L. 631-8 of the Commercial Code provides that the court fixes that date after hearing the parties’ observations and that it cannot be set more than 18 months before the opening judgment. The official text states that, when the court does not set a different date, the date is deemed to be that of the opening judgment. A director who waits for a later bank refusal can therefore create a gap between the factual crisis and the formal filing.
Do not confuse temporary distress with cessation des paiements. A company may have a poor balance sheet but remain able to pay its due debts through available cash and committed credit. It may also be in serious difficulty without yet being in cessation des paiements. For a commercial or craft business, Article L. 611-4 of the Commercial Code makes a conciliation procedure available where the debtor experiences a legal, economic or financial difficulty, actual or foreseeable, and has not been in cessation des paiements for more than 45 days. This can provide a route to negotiate with lenders, suppliers or a foreign parent before a collective proceeding becomes unavoidable.
Conciliation is not a device for rewriting history after the deadline. The file should show the company’s cash position, the nature of the difficulty, the proposed restructuring and the creditors whose cooperation is needed. If the company is already unable to meet due liabilities, the director must obtain advice on whether conciliation remains available and whether the 45-day exception applies. The existence of negotiations does not, by itself, suspend the statutory obligation to react.
For an English-speaking founder, the evidence should be readable by a French court and auditable by an administrator or liquidator. Keep original bank statements, transaction exports, aged creditor and debtor ledgers, unpaid invoices, payment demands, tax notices, URSSAF statements, payroll records, loan agreements, group funding correspondence and board minutes. Preserve the email or message that first reported a missed payment. A reconstructed spreadsheet can be useful, but it should not replace the underlying records or conceal the date on which a debt became due.
The company’s Kbis is also relevant. A Kbis is the official extract showing a company’s registration information, including its SIREN identification number, registered office and legal representative. It is not proof that the company is solvent, but it helps identify the entity, the registered office and the person authorised to act. The greffe, meaning the court registry, may ask for information that does not match an old Kbis. If the director, registered office, activity or group ownership recently changed, prepare the corresponding INPI filing evidence and corporate resolutions.
B. Which French court applies to a subsidiary, a branch or a group with a foreign main proceeding?
For a French subsidiary, the company is a separate legal person. The foreign parent’s location and the director’s residence do not normally transfer the subsidiary’s insolvency filing to the parent’s country. The registered office, the legal form, the company’s activity and the applicable jurisdiction determine the French route. A French SAS, or société par actions simplifiée, and a French SARL, or société à responsabilité limitée, file in their own name. The representative acts for the French company, not for the shareholder merely because the shareholder owns all the shares.
Article L. 621-2 of the Commercial Code distinguishes the tribunal de commerce for commercial or craft activity from the tribunal judiciaire for other activity. In a number of jurisdictions, a Tribunal des activités économiques, or TAE, is used under the current pilot arrangement. The correct court should be checked against the company’s registered office and activity at the time of filing. The form should not be sent to a convenient court merely because the director, lawyer or bank is located there.
The distinction between a subsidiary and a branch is decisive. A French subsidiary owns its own assets and owes its own debts. A French branch, often called a succursale, is an establishment of the foreign company rather than a wholly separate company. Its registration trail and accounts may contain foreign-company documents. The rules governing registration of a foreign company’s establishment, including filing documents at the greffe, are set out in the Commercial Code provisions on foreign companies and their establishments. Before filing, confirm whether the debtor named in the Kbis is the French subsidiary or the foreign company operating through a branch.
This question becomes more difficult when a foreign court has already opened insolvency proceedings against the same legal person. Within the European Union, the concept of the centre of main interests, usually abbreviated as COMI, and the distinction between main and secondary proceedings can affect recognition and the powers of the courts. A French branch or establishment may be involved in a secondary proceeding even though the main proceeding is elsewhere. A French subsidiary is a different legal person, so the parent’s foreign proceeding does not automatically replace the subsidiary’s French analysis.
The cross-border limit was central to Cass. com., 7 February 2018, no. 17-10.056, ECLI:FR:CCASS:2018:CO00180. A Romanian court had opened an insolvency proceeding against the Romanian company before a French court opened a liquidation proceeding. The Court of cassation held that the French proceeding could only be secondary and that the director was not required to make a French declaration of cessation des paiements in that particular procedural setting. The decision describes the consequence in the words « la procédure de liquidation judiciaire ouverte en France ne pouvait qu’être une procédure secondaire ».
That ruling is not a general exemption for a foreign director. It concerned the same legal person, a prior foreign main proceeding and the European recognition rules applicable to that case. It does not mean that a director of an ordinary French SAS may ignore the French 45-day period because the director lives in London, Dubai, New York or Singapore. It means that the first cross-border question is always: which legal person is in difficulty, has another court already opened a main proceeding, and is the French court being asked to open a main or secondary proceeding?
Prepare a one-page jurisdiction map before filing. Identify the debtor, registered office, French establishments, foreign parent, other group companies, bank accounts, employees, material assets and any foreign insolvency application. Add the dates of each proceeding, the court, the appointed office-holder and the legal effect claimed by that court. If a foreign proceeding is pending, obtain the opening decision and its certified translation where needed. Do not describe a parent’s liquidation as the French company’s liquidation unless the legal identity and court order support that conclusion.
The French court can still need information about foreign operations. A French company may pay a foreign supplier, hold receivables abroad or receive shareholder financing. That information helps the court assess available assets, group support and the feasibility of a recovery plan. It does not automatically make the foreign court competent for the French company. Conversely, a French registered office is not enough to defeat an already recognised foreign main proceeding concerning the same foreign legal person.
II. How do you file French company insolvency proceedings remotely and protect the foreign director?
A. What documents, filing route and 45-day timetable should a foreign director prepare?
For a debtor that is in cessation des paiements, the filing clock is short. Article L. 631-4 of the Commercial Code states: « L’ouverture d’une procédure de redressement judiciaire doit être demandée par le débiteur au plus tard dans les quarante-cinq jours qui suivent la cessation des paiements ». The text preserves an exception where the debtor has requested conciliation within that period. If recovery is manifestly impossible, the liquidation route has a corresponding 45-day rule under Article L. 640-4.
Count from the date the legal payment test was first met, not from the day the director finally understood the accounting report. If the date is uncertain, create alternative cash-flow scenarios and preserve the assumptions. A French lawyer or accountant can help test whether a committed credit facility, a payment moratorium or a genuinely collectable receivable changes the date. Waiting for perfect certainty can be dangerous because the court, not the director’s internal spreadsheet, ultimately assesses the relevant dates.
The debtor uses the official declaration route. The Cerfa form no. 10530*02 is the official form for a declaration of cessation des paiements. “Cerfa” is the French label used for standard administrative forms. The form asks for the company’s identification, SIREN number, capital, registered office, activity, other establishments, cessation date, employees and turnover, among other information. The form also accommodates a person who is assisted or represented, but the representative’s authority must be clear.
Article R. 631-1 of the Commercial Code provides that « La demande d’ouverture d’une procédure de redressement judiciaire est déposée par le représentant légal ». It also identifies the financial and corporate material that accompanies the application. In practical terms, the foreign director should assemble the latest annual accounts, a current statement of receivables and liabilities, a declaration of the cash position made recently, the company’s identification documents, employee information and a clear presentation of the business activity. Use the current official form and court instructions because filing channels and document requirements can change.
A robust remote filing pack should contain:
- the signed Cerfa declaration and a short chronological statement explaining the first missed payment, the current cash position and the measures attempted;
- the Kbis or current RNE information, where RNE means Registre national des entreprises, together with the company’s SIREN and legal-form documents;
- the latest filed annual accounts and management information, with a current trial balance and aged accounts payable and receivable;
- bank statements for every account available to the French company, including foreign accounts, overdraft terms, blocked balances and the currency conversion date;
- tax statements, VAT balances, URSSAF statements, payroll records, employee headcount and unpaid wage information;
- loan agreements, security documents, guarantees, factoring arrangements, material leases and important customer and supplier contracts;
- foreign parent funding proposals, intercompany ledgers, board or shareholder resolutions and evidence showing whether promised support is committed and drawable;
- the director’s identity document, proof of authority and, where a lawyer or agent files physically, a written power of attorney with the required formalities.
The list of creditors must be specific. Article L. 622-6 of the Commercial Code refers to an inventory and a list of creditors, debts and principal contracts. Do not submit a single total labelled “trade creditors” when the court needs to understand who is unpaid, which debts are disputed, which security exists and which liabilities concern employees or public bodies. A schedule with creditor name, address, invoice or tax reference, principal, interest, due date, dispute status, security and proposed treatment is more useful than a compressed figure.
Remote execution requires a document and signature plan. The director should confirm with the competent greffe whether the application can be transmitted electronically, filed through a representative or lodged by appointment. A French lawyer can explain the current route and obtain a procedural appointment, but the lawyer cannot cure an absent or inaccurate statement of the company’s assets. If the director signs abroad, check whether the court requires an original, a qualified electronic signature, a legalised power of attorney, an apostille or a certified translation. Requirements can depend on the origin of the document and the court.
Foreign corporate extracts often need translation into French. Keep the original document, the translator’s version and the date on which the extract was issued. Explain foreign accounting terms rather than translating them into a misleading French equivalent. If a parent company’s bank letter is relied on, identify the signatory, the facility, the amount, drawdown conditions, expiry and whether the French company is the beneficiary. A letter stating that the parent “intends to support” the subsidiary may be commercially reassuring but is weaker than an enforceable funding commitment.
The filing should explain the proposed route. A redressement judiciaire is a judicial recovery proceeding intended to preserve the business where continuation or a plan remains possible. A liquidation judiciaire is the court-supervised winding-up route where recovery is manifestly impossible. The director should not choose redressement merely to gain time if there is no credible financing or operating plan. Equally, the existence of unpaid debts does not automatically prove that liquidation is the only route. Explain current orders, margins, key contracts, staff, assets, financing and the concrete steps that could restore payment capacity.
Before sending the application, run a 24-hour filing review. Reconcile the bank balance to the accounting ledger. Check that the cessation date is supported by dated evidence. Recalculate totals in the creditor schedule. Confirm that employee and public-law debts are not omitted. Verify that the French legal representative shown in the filing has authority under the company’s current records. Check whether another court has already opened a proceeding for the same legal person. Finally, save an unmodified copy of every document submitted and the delivery confirmation from the greffe.
This process is compatible with a foreign director remaining abroad. Residence outside France affects logistics, language, travel, service of documents and the availability of a local representative; it does not remove the obligation to act for the French debtor. A foreign director can use a French lawyer, an authorised agent or another procedural representative where the court permits it. The mandate should identify the debtor, the exact proceeding, the authority to sign or lodge documents and the power to receive court communications.
B. What happens after filing, and when can a foreign director face personal sanctions?
After the application, the court checks jurisdiction, the debtor’s identity, the payment condition and the supporting material. Article L. 631-5 of the Commercial Code also shows that a proceeding may be brought through routes other than the debtor’s own application, including by a creditor or the public prosecutor in the circumstances provided by law. The company should therefore expect the possibility that a creditor’s summons, tax enforcement or employee claim reaches the court before the director’s file is complete.
If redressement is opened, the judgment starts a collective process around the company’s debts and operations. An administrator may be appointed, and the director’s powers can be supervised or limited depending on the judgment. If liquidation is opened, a liquidator generally takes responsibility for realising assets and verifying claims. Article L. 640-1 of the Commercial Code describes liquidation where the debtor is in cessation des paiements and recovery is manifestly impossible: « la liquidation judiciaire est ouverte à tout débiteur en cessation des paiements et dont le redressement est manifestement impossible ».
The opening judgment has immediate effects. Article L. 622-21 of the Commercial Code provides that « Le jugement d’ouverture interrompt ou interdit toute action en justice de la part de tous les créanciers ». In context, the rule concerns individual actions seeking payment of money and enforcement measures covered by the collective proceeding. It does not mean that every contract, bank operation or regulatory obligation disappears. The company must follow the administrator’s or liquidator’s instructions, preserve assets and provide accurate information.
The office-holder will examine the books, bank accounts, contracts, employees, tax and social liabilities, related-party transactions, guarantees, asset transfers and the company’s conduct before the opening judgment. The director should provide a clean document index with bank statements, ledgers, invoices, correspondence, board minutes and explanations of unusual transactions. A foreign parent should preserve the same material and identify every transfer between the group and the French company. Incomplete records can delay the proceeding and create avoidable suspicion around ordinary group payments.
Creditors must follow the claim-declaration process and deadlines stated in the opening judgment and official notices. The BODACC, the Bulletin officiel des annonces civiles et commerciales, publishes many French commercial notices. A supplier, bank, landlord or foreign parent should not assume that an email to the director is enough to preserve a claim. The creditor should monitor the BODACC notice, identify the office-holder and submit the claim in the required form, with supporting invoices, contracts, security and calculations.
Employees have a separate practical position. Payroll, employment contracts, unpaid wages and social declarations should be listed immediately. The French wage-guarantee system may intervene through AGS, the Association pour la gestion du régime de garantie des créances des salariés, subject to the legal conditions and limits applicable to the proceeding. A foreign director should not promise employees that every amount will be paid by the parent or by AGS before the administrator or liquidator has verified the claims. Preserve payroll files, time records, payslips, employment contracts and evidence of payment.
Opening a proceeding does not automatically make the director personally liable for the company’s debts. A director’s personal exposure may nevertheless arise from a personal guarantee, a separate contractual undertaking, fraud, certain tax or social-security breaches, asset diversion, an inaccurate filing or management conduct that caused a legally recognised loss. The analysis is personal and fact-specific. A foreign nationality or foreign residence is not a shield, but neither is the mere fact that the company failed.
One risk is a late or deliberately omitted filing. Article L. 653-8 of the Commercial Code permits an interdiction de gérer, meaning a prohibition on directing, managing, administering or controlling certain businesses or legal persons, where the person knowingly failed to request redressement or liquidation within 45 days without requesting conciliation. The relevant wording refers to a person who « a omis sciemment de demander l’ouverture d’une procédure ». The sanction is not an automatic result of every delay: the court must apply the statutory conditions and assess the evidence.
The Court of cassation addressed the mental element in Cass. com., 24 May 2018, no. 17-18.918, ECLI:FR:CCASS:2018:CO00447. It held that the less severe version of Article L. 653-8 requiring the omission to have been made knowingly applied immediately to the case before it. The court’s reasoning refers to the requirement that « l’omission de la demande d’ouverture d’une procédure collective dans les quarante-cinq jours de la cessation des paiements soit faite sciemment ». The decision supports a careful distinction between a proven knowing omission and an assumption based only on the company’s eventual liquidation.
A second risk is an action for insufficiency of assets. Article L. 651-2 of the Commercial Code concerns the liability of a manager whose management fault contributed to an insufficiency of assets in liquidation. The provision excludes simple negligence in management. This does not make delay harmless: knowingly continuing a business, failing to preserve evidence, paying a related party while leaving employees unpaid or hiding liabilities can be assessed differently from a documented but unsuccessful restructuring attempt.
The foreign director should maintain a decision log from the first warning. Record the cash position, debts due, funding requests, payment plans, professional advice, board decisions, creditor communications and the reason for each payment made after the crisis began. If a payment is necessary to preserve employees, insurance, essential services or an income-generating contract, document the legal and business basis and obtain appropriate advice. Do not backdate minutes, alter accounting records or route company assets through a foreign parent to make the French balance sheet appear healthier.
The Commercial Code also provides a separate personal-bankruptcy-type sanction in certain cases. Article L. 653-3 addresses conduct such as continuing a loss-making business for personal interest, diverting or concealing assets, or fraudulently increasing liabilities. The provision should not be used as a label for ordinary commercial failure. It is a warning that the director’s conduct before and during the proceeding must remain transparent, commercially defensible and traceable.
Cross-border logistics continue after the opening judgment. The office-holder may need access to a foreign bank, a foreign accounting platform, cloud records, group contracts or directors who live in another jurisdiction. Give written consent and practical access quickly, while preserving confidentiality and legal privilege where it applies. Translate the minimum material needed for the court and the office-holder, but keep the source files and metadata. If a foreign court is also involved, coordinate notices, claims and asset information so that the French company is not represented inconsistently in two proceedings.
A foreign parent can support a French recovery only through a credible, documented plan. The plan should identify the funding amount, timing, conditions, ranking, security, currency, tax treatment and approval process. It should also explain the French company’s operating model: customers, employees, rent, suppliers, VAT, corporate tax and social-security payments. An intercompany promise that depends on a future investment round should be described as conditional. The court and the office-holder need to know what money is available now and what depends on an uncertain event.
Use this final decision matrix before choosing the filing route:
- If due debts can be paid with cash, immediately usable credit or a binding moratorium, document that position and monitor it daily; the company may be distressed without yet meeting the statutory test.
- If the company has a genuine difficulty and has not been in cessation des paiements for more than 45 days, assess conciliation promptly, with a funding and creditor-negotiation plan.
- If the company cannot meet due liabilities and recovery remains possible, prepare the redressement filing and do not let cross-border logistics consume the 45-day window.
- If the company cannot meet due liabilities and recovery is manifestly impossible, prepare the liquidation route, preserve assets and give the court an accurate creditor and employee schedule.
- If a foreign proceeding concerns the same legal person, map the COMI, main proceeding and possible French secondary proceeding before making a French declaration or relying on the foreign court.
- If the issue concerns a French subsidiary, treat it as a separate debtor even when every share is owned by a foreign parent and the director signs from abroad.
Each outcome requires evidence, not a slogan. “The parent will pay,” “the bank has not formally refused,” or “the director is abroad” are not substitutes for a cash schedule, a creditor list, a jurisdiction analysis and a timely filing decision. The strongest file explains what happened, when it happened, what was tried, what is available, what is due and why the proposed proceeding is legally and commercially appropriate.
Conclusion
A foreign director can often initiate a French insolvency proceeding without travelling to France, but distance does not stop the French payment test or the 45-day deadline. The first task is to identify the French debtor, distinguish a subsidiary from a branch, test due liabilities against immediately available assets and establish the earliest defensible date of cessation des paiements. The second is to confirm the competent court and check whether a foreign main proceeding already concerns the same legal person.
The practical file should contain the signed Cerfa declaration, current bank and accounting evidence, a precise creditor schedule, employee and public-law liabilities, corporate authority, foreign documents and a clear recovery or liquidation proposal. The company should preserve every source record and create a decision log. A timely, accurate filing can protect the collective process; a knowing delay, asset diversion or unsupported statement can expose the director to separate sanctions. The correct approach is therefore urgent and evidence-led, not improvised from the director’s country of residence.
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