The judicial winding-up proceedings shall be addressed to all individual entrepreneurs (EIs), including micro-entrepreneurs or EIRL: titleContent.

The 2 following conditions must be completed:

• The head of company is defaulting. This means that he cannot meet the debts incurred for his professional activity with the available assets of his professional assets.
• Recovery is clearly impossible.

The bankruptcy proceedings will then end the business.

Judicial winding-up may be initiated immediately by the court or is ordered by the court following the opening of a safeguard or judicial redress procedure.

The sole trader shall have a only professional assets. Only one procedure for dealing with difficulties may be opened in respect of such assets. Thus, where he pursues several independent professional activities, he cannot be liquidated by a court if proceedings (or a safeguard or judicial redress) are already opened in respect of his professional assets for another of his activities.

The bankruptcy procedure must be requested by the sole trader within 45 days that follow the cessation of payments.

Where the claimant is willfully delaying the application for judicial winding-up, he may be sentenced by the court to prohibition on managing for a maximum of 15 years.

Where there is no procedure for reconciliation pending, the opening of the judicial liquidation can also be requested by one of the people following:

• Public Prosecutor
• One of creditors of the company in difficulty (supplier, owner of the commercial premises, Urssaf)

The sole proprietor shall apply to the court for judicial winding-up.

The competent court depends on the nature of the activity.

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Commercial and/or craft activity

To request the opening of a judicial liquidation, the Head of company must complete the model application for the opening of proceedings next:

Application form for the opening of collective proceedings for the individual contractor (EI)

He must specify in this form the desired procedure:

• or a judicial winding-up if its debts are solely professional debts with agreement on the opening of a occupational recovery if the contractor fulfills the conditions
• or a procedure for over-indebtedness if the debts are only personal
• either a judicial liquidation and an over-indebtedness procedure if he has professional debts and personal debts

In any case, it's the commercial court who decide the procedure, depending on the financial situation of the Head of company.

When personal and business debts are good distinct, the commercial court shall open winding-up proceedings in order to deal with professional liabilities and shall bring the matter before the over-indebtedness commission for personal liabilities. The agreement of the head of company is necessary.

Otherwise, the bankruptcy procedure will deal with both professional and personal liabilities.

FYI  

The Banque de France provides a computer graphicswhich summarizes the different situations.

The application for judicial winding-up shall be accompanied by documents following:

• Extract K-bis or certificate of registration in the National Register of companies (RNE)
• State of current liabilities and the available assets (supplemented by the list of debts for which payment is continued on the assets in question) and declaration of cessation of payments
• Number of employees employed at the date of the request (name, address, etc.) and the amount of turnover at the closing date of the last accounting year
• Statement of assets and liabilities of collateral and off-balance sheet commitment
• Summary inventory of company assets, rights and obligations (distinguishing between those falling under the occupational heritage and personal property).
• Annual accounts for the last financial year
• Cash position (list of receivables and debts) less than 1 month old
• Honor certificate certifying that no ad hoc representative has been appointed or that conciliation has been opened within 18 months of the request
• Act of waiver of protection of personal property the individual contractor with the name of the creditor concerned and the amount of the commitment
• Request for treatment of over-indebtedness situation with detailed statement of income and assets and liabilities of the assets and liabilities

The request for opening must be filed or sent in 2 copies to Commercial Court or Economic Activities Court (EAT).

Indeed, since the 1^er january 2025, the commercial courts of 12 cities are replaced by Economic Activity Tribunals (EAT) for the processing of ad hoc mandate procedures, conciliation procedures and collective proceedings. The courts of the following cities are concerned: Avignon, Auxerre, Le Havre, Le Mans, Limoges, Lyon, Marseille, Nancy, Nanterre, Paris, Saint-Brieuc and Versailles.

The Ministry of Justice provides a simulator to know the competent court:

Know the court competent for procedures for the prevention or treatment of difficulties

Please note

For more information on EATs, please visit:

Companies in difficulty: designation and establishment of economic activity tribunals

Directorate of Legal and Administrative Information (Dila) - Prime Minister

Pour en savoir plus

Liberal activity

To request the opening of a bankruptcy procedure, the Head of company must complete the model application for the opening of proceedings next:

Application form for the opening of collective proceedings for the individual contractor (EI)

He must specify in this form the desired procedure:

• or a judicial winding-up if its debts are solely professional debts with agreement on the opening of a occupational recovery if the contractor fulfills the conditions
• or a procedure for over-indebtedness if the debts are only personal
• either a judicial liquidation and an over-indebtedness procedure if he has professional debts and personal debts

In any case, it's the court of law who decide the procedure, depending on the financial situation of the Head of company.

When personal and business debts are good distinct, the court shall open winding-up proceedings in order to deal with the professional liability and shall bring the matter before the over-indebtedness commission for personal liabilities. The agreement of the head of company is necessary.

Otherwise, the bankruptcy procedure will deal with both professional and personal liabilities.

FYI  

The Banque de France provides a computer graphicswhich summarizes the different situations.

The application for winding-up proceedings shall be accompanied by the following documents:

• Certificate of registration in the National Register of companies (NCR)
• State of current liabilities and the available assets (supplemented by the list of debts for which payment is continued on the assets in question) and declaration of cessation of payments
• Number of employees employed at the date of the request (name, address, etc.) and the amount of turnover at the closing date of the last accounting year
• Statement of assets and liabilities of collateral and off-balance sheet commitment
• Summary inventory of company assets, rights and obligations (distinguishing between those belonging to the heritage professional and personal property).
• Annual accounts for the last financial year
• Cash position (list of receivables and debts) less than 1 month old
• Honor certificate certifying that no ad hoc representative has been appointed or that conciliation has been opened within 18 months of the request
• When the company exercises a regulated liberal profession, designation of the professional body or authority to which it is subject
• Act of waiver of protection of personal propertythe individual contractor with the name of the creditor concerned and the amount of the commitment
• Request for treatment of over-indebtedness situation with detailed statement of income and assets and liabilities of the assets and liabilities

This request must be lodged with the court or economic activities tribunal (TAE) .

Indeed, since the 1^er january 2025, the judicial courts in 12 cities are replaced by Economic Activities Tribunals (EATs) for the processing of ad hoc, conciliation and collective proceedings. The courts of the following cities are concerned: Avignon, Auxerre, Le Havre, Le Mans, Limoges, Lyon, Marseille, Nancy, Nanterre, Paris, Saint-Brieuc and Versailles.

The Ministry of Justice provides a simulator to know the competent court:

Know the court competent for procedures for the prevention or treatment of difficulties

Warning  

The court has jurisdiction over the following regulated professions of law: lawyers, notaries, commissioners of justice, registrars of commercial courts, court administrators and judicial agents.

For more information on EATs, please visit:

Companies in difficulty: designation and establishment of economic activity tribunals

Directorate of Legal and Administrative Information (Dila) - Prime Minister

Pour en savoir plus

Judicial winding-up may be initiated immediately by the court. It may also be pronounced by the court during the period of observance of a trial backup or judicial redress if it appears that the recovery of the company is manifestly impossible.

The court checks the eligibility conditions to a judicial winding up.

When the personal and professional debts are good distinct, the court shall open winding-up proceedings in order to deal with the professional liability and shall refer the matter to the over-indebtedness commission for personal liabilities. The agreement of the head of company is necessary.

Otherwise, the bankruptcy procedure will deal with both professional and personal liabilities.

If the liquidation request is accepted by the court, the court orders the liquidation to commence (i.e. opening judgment) and appoints the parties involved in this procedure (liquidator, judge-commissioner, employee representative).

Appointment of interveners to the proceedings

The tribunal shall appoint a Judge-Commissioner to oversee the expeditious conduct of the proceedings and the protection of the interests involved. It also appoints a liquidator and a representative of the employees.

Appointment and assignment of the liquidator

The court shall appoint a liquidator who shall winding-up operations at the same time as at the verification of claims.

As soon as the proceedings are opened, the liquidator shall administer the company and shall:

• Company Management
• Verification of claims
• Sale of the goods (goods, materials, immovable property, right to lease, etc.) either as part of an overall sale of the company (disposal plan) or through separate sales (the funds are then divided among the different creditors according to the rank of each)
• Dismissal of employees and payment of wages
• Recovery of sums due to the company, if necessary in legal proceedings

Appointment of an employee representative

If it exists in the company, the Social and Economic Committee (ESC) must appoint a representative from among the employees of the company. This representative checks claims arising from employment contracts and checks the payment of sums to employees.

Publication of the judgment initiating the judicial winding-up

The opening judgment shall be published by the Registrar of the Court of First Instance:

• Mention to SCR: titleContent for a commercial activity and/or RNE: titleContent for a craft or professional activity
• Notice to the Official Bulletin of Civil and Commercial Advertisements (bodacc)
• Opinions in a legal listings support

The opening decision has immediate consequences for the head of company, the company and its employees.

Divestiture of the Head of company

The judgment which initiates or pronounces the judicial liquidation shall entail divestiture of the administration and disposal of the property of the sole trader. The Head of company may no longer touch his professional or personal assets until the liquidation has been completed. He can no longer sell an asset, cash in a sum of money, terminate a contract... etc. All acts concerning the assets of the Head of company shall be performed by the liquidator.

There are, however, rights specific to the head of company which are not exercised by the liquidator.

Thus, the Head of company retains his rights to certain assets declared to be exempt from seizure, which are as follows:

• Principal residence
• Movable property necessary for the life and work of the Head of company and his family
• Maintenance claims
• Accident at work Annuities of
• Salaries and wages to a certain extent.

The Head of company also retains his own rights in matters of inheritance.

Discontinuance of the company

The opening of the judicial liquidation shall entail the cessation of the activity of the company. Occasionally, continued activity is permitted.

Principle of cessation of activity and possibility of rebound

In principle, the opening of a bankruptcy procedure obliges the sole trader to cease his activity until the closure of the procedure.

However, the entrepreneur may pursue a new independent professional activity without awaiting the closure of the bankruptcy proceedings. A new professional heritage is being built up.

This possibility of rebound is possible only if the entrepreneur has not been sentenced in the last 5 years to a judicial liquidation for insufficient assets or to a decision to close a professional recovery procedure.

Maintenance of activity

The continuation of the activity may be authorized by the court for a maximum duration of 6 months in any of the following cases:

• Total or partial divestiture of the company is possible.
• The public interest or the creditors' interest demands it.

In both cases, the court shall appoint a court administrator to manage the company. He will exercise the powers of the liquidator.

Termination of employment contracts

The liquidator must implement the procedure for economic redundancy and must consult the Social and Economic Committee (ESC) if it exists.

Employment contracts between employees and the company in difficulty are broken in a 15-day period in accordance with the judgment pronouncing the winding-up by the courts or with the expiry of the authorization to continue the activity.

This period shall be increased to 21 days when a employment protection plan (ESP) is established.

If the liquidator is obliged to set up a PSE, he must submit it to the Dreets: titleContent for validation or approval.

The Dreets shall take a decision within 4 days of the date of the last meeting of the ESC.

Claims arising from the termination of the employment contract (wages, bonuses, allowances, contributions and social contributions, etc.) shall be covered by the contribution to the wage guarantee scheme (AGS).

Effects of the judgment on creditors

All creditors must declare their claims within two months of the publication of the judgment initiating the procedure. This opening judgment results in the cessation of individual proceedings and the cessation of interest rates for loans not exceeding one year.

For more information on the declaration of claim, see the dedicated card.

The opening judgment shall have the following effects on the creditors:

Discontinuation of individual proceedings

The opening judgment prevents any legal action against the company to obtain payment of a sum of money: it may be an action for payment of rent or a sale price.

Any legal action to terminate a contract for default is also suspended or prohibited.

Interests price interruption

The opening judgment sets the price of interest (contractual, legal, etc.) and surcharges, with the exception of interest on loans of more than 1 year.

The winding-up proceedings shall end with a final judgment of the liquidation.

The court shall declare the liquidation closed in one of the following situations:

• When all creditors are disinterested, i.e. the company has been able to repay all creditors and still has money that it will distribute to the partners (exceptional situation)
• When the company faces a shortage of assets, i.e. the company no longer has enough money to repay all the claims (most common situation)

The closing judgment puts an end to the mission of all the players: liquidator, judge commissioner and is the subject of publicity.

It marks the cancelation of debts and the end of the divestiture of the head of company.

Debt forgiveness

The head of company is released from his debts. This allows him to restart a professional activity if he wishes. We're talking about right to rebound.

However, in the event of tax evasion, concealment of assets or personal or criminal sanctions against the sole trader, creditors regain their right to sue the company in liquidation.

Termination of the divestiture of the Head of company

The Head of company regains full capacity after the judicial winding-up proceedings. He is again entitled to exercise all the powers related to his assets. For example, they can make a payment or sell property freely.

Publication of the judgment closing the judicial liquidation

The judgment closing the liquidation shall be published by the Registrar of the Court of First Instance:

• At SCR: titleContent for a commercial activity and/or RNE: titleContent for a craft or professional activity
• To the Official Bulletin of Civil and Commercial Advertisements (Bodacc.fr)
• In a legal listing support