Commercial law lawyer in Paris: trader status, proof of acts and sale of a business.

The Commercial Code sets two cumulative conditions: carrying out commercial acts and making them one's regular profession (Article L. 121-1 of the Commercial Code). A single act, even one that is commercial by nature, is therefore not enough to make a person a trader. The repetition, duration and professional character of the activity are examined on documents.

The Court of Cassation recalled this in a case concerning a founding shareholder who had transferred control of their company and granted a warranty and indemnity agreement (garantie d'actif et de passif). It upheld the judgment holding that “those acts were not sufficient, given their limited number, to show that Mr Y... had made them his regular profession, so that he was not a trader” (Cass. com., 29 January 2020, No. 19-12.584) (our translation). For the company that sought to treat him as a trader, the decision is unfavourable: the appeal to the Court of Cassation was dismissed.

A company officer who signs in the company's name does not, in principle, carry out a commercial act on their own account. The firm therefore checks who signed, in what capacity and on whose behalf, before discussing the applicable regime.

Registration of an individual gives rise to a presumption of trader status (Article L. 123-7 of the Commercial Code). The presumption is not absolute: third parties and administrations may adduce proof to the contrary, and they cannot rely on it if they knew that the registered person was not a trader.

Absence of registration has the opposite effect. A person required to register who has not applied for registration within fifteen days of starting activity cannot, until registered, rely on trader status, but cannot invoke the lack of registration to escape the obligations attached to that status (Article L. 123-8 of the Commercial Code).

This asymmetry carries great weight in commercial leases, whose statutory regime requires, among other things, registration of the operator (Article L. 145-1 of the Commercial Code). In a case where the tenant claimed eviction compensation, the Court of Cassation upheld the refusal of that compensation on the ground that the company “was not, at the time the notice to quit was served, registered for the secondary establishment operated on the premises” (Cass. 3e civ., 23 January 2020, No. 19-11.215) (our translation). For the tenant, the outcome is unfavourable. The firm therefore checks the registration of each establishment, and not only that of the head office.

Article L. 110-1 of the Commercial Code lists the acts that the law deems commercial acts (Article L. 110-1). Some are so by their object, such as the purchase of movable property for resale or banking and brokerage operations. Others are commercial between all persons, whatever the status of their author: the bill of exchange and, since 1 January 2022, the guarantee of a commercial debt.

Case law adds the transfer of control of a commercial company. The Court of Cassation holds that “Agreements that transfer control of a commercial company are commercial in nature, even where they are not concluded between traders, and the obligations undertaken by the sellers are performed jointly and severally” (Cass. com., 30 August 2023, No. 22-10.466) (our translation). In that case, the sale covered all the shares and the sellers' appeal to the Court of Cassation was dismissed.

This classification has practical consequences: the commercial court also rules on disputes concerning a commercial act, whatever the status of the persons involved (Article L. 721-3 of the Commercial Code). The firm therefore identifies the act in question before determining the court and the regime applicable to the debt.

As regards traders, commercial acts may be proved by any means, unless a text provides otherwise (Article L. 110-3 of the Commercial Code). An agreement reached by email, an order placed by telephone and then delivered, or a series of invoices paid without reservation may thus establish the existence and content of a commercial act as regards a trader, unless a text provides otherwise.

Accounting plays a particular role. If properly kept, it may be admitted in court as evidence between traders for commercial matters; if irregularly kept, it cannot be relied on by its author in their own favour (Article L. 123-23 of the Commercial Code). The same text limits the cases in which the judge may order the production of accounting documents.

Freedom of evidence does not remove the need for consistency. The judge assesses the value of each item, and an invoice issued by the party claiming payment does not, on its own, amount to the other party's agreement. The firm therefore assembles documents that come from both sides: signed purchase order, delivery receipt, partial payment, an exchange acknowledging the service. It is their dated and ordered consistency that makes it possible to demonstrate the agreement and its scope.

The rule of freedom of evidence applies as regards traders (Article L. 110-3 of the Commercial Code). Where the act is commercial for one party and civil for the other, it is called a mixed act, and each party keeps its own regime. Against a private individual, a legal act concerning a sum above the amount set by decree must in principle be proved by a written document (Article 1359 of the Civil Code).

Conversely, the private individual may rely on this freedom against the trader, since the text refers to evidence as regards traders (Article L. 110-3). The same difference appears in the clauses of the contract. A clause designating the territorially competent court operates only between parties who have all contracted as traders (Article 48 of the Code of Civil Procedure), and an arbitration clause cannot be enforced against a party who did not contract in the course of their professional activity (Article 2061 of the Civil Code).

A trader dealing with non-professionals therefore has an interest in keeping signed documents for significant commitments. Before any action, the firm checks whether the required written document exists, whether a commencement of proof in writing can be relied on, and which court can be seised against the non-trader party.

The general limitation period is five years for commitments arising from commercial activity, whether the creditor dealt with another trader or with a non-trader, although a special text may provide a shorter period (Article L. 110-4 of the Commercial Code). The starting point follows the general rule: the day on which the right-holder knew or should have known the facts enabling them to exercise it (Article 2224 of the Civil Code).

The date of the invoice is not always decisive. In a judgment unfavourable to the service provider, the Court of Cassation held the claim barred by limitation and upheld the court of appeal, which had found that “the client's obligation to pay arises when the service ordered has been performed”, “regardless of the date on which it had decided to issue its invoice” (Cass. com., 26 February 2020, No. 18-25.036) (our translation). The provider, who had been late in invoicing, had its claim for payment declared barred by limitation.

In another case, the seller had itself set the payment due date on its invoice. The Court of Cassation upheld the judgment holding that “the seller's claim fell due from that date”, the starting point of the limitation period (Cass. com., 14 June 2023, No. 21-14.841) (our translation). The firm therefore reconstructs the performance date, the invoicing date and the due date before any claim.

The Civil Code provides that joint and several liability is statutory or contractual and is not presumed (Article 1310 of the Civil Code). The Court of Cassation nonetheless finds joint and several liability between sellers who transfer control of a commercial company, absent a clause expressly excluding it, the sale being a commercial act (Cass. com., 30 August 2023, No. 22-10.466).

This presumption has precise limits. The Court of Cassation quashed a judgment that had given a buyer who had bought shares from only one of the sellers the benefit of joint and several liability of all the sellers under a liabilities warranty, recalling, under the former text, that “joint and several liability is not presumed; it must be expressly stipulated” (Cass. com., 24 January 2024, No. 20-13.755) (our translation).

It has also held that “active joint and several liability is not presumed” between several creditors of the same guarantee, so that the action of one had not interrupted the limitation period for the benefit of another (Cass. com., 26 September 2018, No. 16-28.133) (our translation). The firm therefore examines separately the position of each debtor and each creditor, as well as the clauses of the deed, before claiming the whole amount from a single person.

Silence does not amount to acceptance, unless the law, customs, business dealings or particular circumstances provide otherwise (Article 1120 of the Civil Code). Between traders, there is a strong temptation to consider that a new condition that was notified and not contested has been accepted. Case law requires more.

The Court of Cassation quashed a judgment that had held a service provider bound by a new invoicing method on which it had not commented. It recalls that “silence does not in itself amount to acceptance, unless particular circumstances make it possible to give it that meaning”, and criticises the judges for not having identified those circumstances (Cass. com., 26 February 2025, No. 23-21.063) (our translation). The provider's payment claims were sent back to another court of appeal.

In practice, a party who wishes to amend a commercial contract must obtain express agreement or gather evidence showing that the other party accepted the change. The firm examines the history of the relationship, the exchanges and subsequent performance, then indicates whether silence can, in that particular file, be given any effect.

Contracts bind the parties not only to what is expressed in them but also to all the consequences that equity, custom or the law attach to them (Article 1194 of the Civil Code). In commercial law, the customs of a profession often supplement the contract, notably for time limits, tolerances, delivery arrangements or the allocation of certain tasks.

The Court of Cassation specifies their scope as regards someone outside the profession: “the customs developed by a profession are intended to govern, unless otherwise agreed, not only relations between its members, but also those of the latter with persons outside that profession, provided it is established that the latter, having been aware of them, accepted them” (Cass. com., 4 October 2023, No. 22-15.685) (our translation). In that case, the quote and the invoice referred to customs filed with the registry of the Paris commercial court, and the buyer had paid without comment: the appeal to the Court of Cassation was dismissed.

The burden of proving the custom, awareness of it and its acceptance lies on the party who relies on it. The firm therefore looks for the reference documents, the wording on quotes and invoices, and the date on which the other party became aware of it.

Apart from a contribution to a company (Article L. 141-21) and a sale ordered by the court in judicial liquidation (Article L. 642-5), the sale of a business must be published within fifteen days of its date, at the buyer's initiative, in a legal notices medium and in the Official Bulletin of Civil and Commercial Notices (BODACC) (Article L. 141-12 of the Commercial Code). On pain of nullity, this publication must be preceded by registration of the deed, unless it is a notarial deed, or, where there is no deed, by the tax declaration provided for by the text (Article L. 141-13).

Within ten days following the last publication, any creditor of the seller, whether or not its claim is due, may lodge an opposition to payment of the price, although the landlord may not do so for current or future rent (Article L. 141-14). A buyer who pays before this period expires is not discharged as regards third parties (Article L. 141-17). The Court of Cassation infers from this that “payment made to the seller of the business, before the expiry of the opposition period, cannot be relied on against them”, whether or not the creditors lodged an opposition (Cass. com., 8 March 2023, No. 21-18.677) (our translation). In that case, the buyer had paid part of the price directly to the seller, who was subsequently placed in judicial liquidation.

To avoid paying twice, the buyer may provide that the price will be held by an escrow agent until the period expires and, in the event of opposition, until it is lifted or until the authorisation to receive the price that the seller may obtain from the urgent applications judge where the opposition is made without title and without cause or is void in form (Article L. 141-16). The firm also checks the statement of registered charges, in particular pledges over the business (Article L. 142-1 of the Commercial Code), before any release of funds.

No, unless there is an express clause or a statutory exception. The Court of Cassation holds that, absent an express clause, “the sale of a business does not automatically carry with it the obligations to which the seller may be bound under commitments initially entered into by the seller” (Cass. com., 25 October 2023, No. 21-20.156) (our translation). It adds that the same applies to claims held by the seller before the sale, and quashed the judgment that had inferred their transfer from a general clause taking over assets and liabilities.

This rule protects the buyer against liabilities it has not accepted, but it also requires the takeover clauses to be drafted precisely. If the buyer wishes to recover a claim of the seller, the deed must provide for this clearly, and the assignment can be relied on against the debtor only if the debtor has consented to it, has been notified of it or has acknowledged it (Article 1324 of the Civil Code), the judgment having ruled on a 2015 transaction governed by former Article 1690. To continue a contract outside a transfer provided for by law, the agreement of the other contracting party and a written document are required, on pain of nullity (Article 1216 of the Civil Code).

Some exceptions result from specific texts, which the judgment expressly reserves. The firm lists the contracts, debts and claims attached to the business, then examines, for each, whether the law organises its transfer or whether an express clause is needed.

Until the management lease is published, the lessor of the business is jointly and severally liable with the lessee-manager for the debts the latter incurs in operating the business (Article L. 144-7 of the Commercial Code). Publication therefore conditions the owner's protection as regards the manager's suppliers and partners.

The register plays a comparable role when a trader stops operating. A registered trader who sells their business or grants its operation, notably under a management lease, can plead the cessation of their activity to escape actions based on their successor's obligations only from the deregistration or the corresponding entry (Article L. 123-8 of the Commercial Code).

A creditor who dealt with a lessee-manager therefore checks the date the contract was published and the state of the register on the day its claim arose. The owner of the business, for its part, keeps proof of these formalities. The firm compares these dates with those of the orders and invoices concerned, then determines against whom the claim can be brought and to what extent.

To set aside the ordinary rules of territorial jurisdiction, the clause must meet two conditions: it must have been agreed by parties who have all contracted as traders, and it must appear in very prominent characters in the commitment of the party against whom it is invoked (Article 48 of the Code of Civil Procedure). A legible clause is not always enough: the Court of Cassation requires an examination of its presentation, “having regard to the physical conditions of its presentation, taking account of the typography of the text in which it” appears (Cass. com., 20 April 2017, No. 15-20.908) (our translation).

Designation of the Paris courts has, by contrast, been held sufficient between two commercial companies, because “the nature of the court chosen, namely the Paris commercial court, could be determined by the mere fact that the parties were commercial companies” (Cass. com., 30 September 2020, No. 19-10.423) (our translation). The case was sent back to the Paris Court of Appeal.

In Paris, the commercial court is among the twelve courts designated as economic activities courts (tribunaux des activités économiques) for a four-year experiment that began on 1 January 2025 (Order of 5 July 2024, Articles 1 and 2). The firm checks the clause, the status of the parties and the exact competent court before any court action.