White Paper “110 legal questions”

White Paper “110 legal questions”

Do you run your own business? By answering the most common questions business owners ask themselves every day, our lawyers seek to warn against certain preconceived ideas and draw attention to the most common pitfalls.

Many difficulties, often trivial, can be avoided with a minimum of caution. The main objective of our White Paper (in French only) is to encourage business owners to ask the right questions at the right time. It should not be forgotten that the law is constantly changing and that case law often precedes legislative developments. It is therefore essential to seek advice from qualified professionals as soon as possible.

No one should ignore the law, but running a business is above all an exciting adventure!

In Extenso Avocats

Some questions addressed in the White Paper…

In question and answer format, follow the life of a company – its birth, its development and its ups and downs – and make sure that this life is long, but most of all, happy!

  • Choosing the name of your business
    The name of your business should be different from the trademark under which your products or services are marketed. There is no interest to use the trademark as the name of your business unless it has been registered by your company and the shareholders wish to do so.

    If, however, the trademark has been registered by the director or one of the shareholders, using it as your business name would result in the stripping of the related rights. It is preferable for the owner of the trademark that the business have a more commonplace name, and the trademark be used for its commercial operation under a licensing agreement.
  • What are the elements that constitute the business/goodwill ?
    The key and decisive element is the business’ clientele. This is the point that is taken into account in determining whether it is the business or the “goodwill” that is being sold (to which a landlord cannot object), or a simple transfer of the lease right (which generally requires the landlord’s prior agreement). The business cannot, therefore, be sold, without it being linked to a location.

    The business may also include the lease right, tangible elements (furniture, equipment, tools, goods), the brand name, intellectual property rights (patents, licenses, trademarks, designs and models), and so on. It can be sold in whole or in part.
  • What is a joint venture?
    Put simply, a joint venture is a common endeavour where two or more companies agree on a partnership with the aim of pursuing a communal project.

    The parties sign a framework agreement outlining their mutual obligations, in particular, how each will share their resources (provision of labour, raw materials, equipment, etc.), contribute to the venture’s financial needs and manage the operation.

    A joint venture generally leads – and this is especially commonplace in property transactions – to the formation of a de facto company, without legal personality and within which the partners share profits and losses.
  • What is factoring?
    Factoring is a transaction in which a business “sells” its accounts receivable to a financing company (“factor”), which will collect the said receivable from the debtor up to the amount it has agreed to guarantee. The factor receives a proportional fee (around 0,5% to 2,0%) and may also receive an “advance” corresponding to the funds it makes available to the business. This is obviously useful in terms of cash flow and for presentation of the business’s accounts. However, the factor must give its consent to the client on the receivables transferred.

    Attention: the fees charged by the factor reduce margins.
  • What is contractual termination ?
    Contractual termination was introduced under the law of 25 June 2008, and has been particularly successful.

    Strictly defined under articles L. 1231-1 et seq. of the French Labour Code (Code du Travail), this employment termination procedure is the result of an agreement between the employer and the employee.

    The agreement is preceded by one or more interviews, the purpose of which is to define the date of termination, the indemnity paid by the employer and any additional terms and conditions. The parties sign a termination form, the official model of which is available on the Internet.

    The termination is approved by the Department of Work, Employment and Vocational Training (Direction Départementale du Travail, de l'Emploi et de la Formation Professionnelle), after expiration of a 15 day withdrawal period.
  • How can I prevent unpaid debts and non-payments ?
    Unpaid debts and non-payments are one of the main causes of business insolvencies. While there are always unknowns and nobody is immune from discourteous clients acting in bad faith, a number of precautions can be taken:
    • Research clients by checking whether all mandatory information is included in their trade documents, and whether contracting parties have, at least in appearance, the power to do so
    • Check solvency, in particular by obtaining information from the Commercial Courts (company accounts, liens and pledges)
    • Make sure that the commitments entered into are not disproportionate to the size of the company
    • Be very vigilant about payment deadlines (capped since 1 January 2009): requests for the extension of payment deadlines can be an indicator of the debtor’s solvency
    • Use credit insurance for foreign transactions
    • Use contractual mechanisms such as title retention clauses


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