Category: Legal Insights

A newly formed company acquires legal personality only upon its registration in the Trade and Companies Register (Registre du commerce et des sociétés – RCS). From that moment, it is entitled to enter into contracts in its own name, independently of its shareholders. However, prior to registration, it is often necessary for a company to enter into agreements, whether to facilitate its formation (opening bank accounts, leasing premises, securing financing, etc.) or to avoid missing business opportunities (such as forming partnerships or concluding agreements with clients or suppliers).

In such circumstances, it is the founding shareholders, either directly or through their agents, who enter into these contracts. Under French law, individuals acting on behalf of a company in formation—prior to its acquisition of legal personality–are jointly and severally liable for the obligations incurred. However, they may be released from this liability if, once duly incorporated and registered, the company ratifies the commitments in accordance with the formalities prescribed by law. In that case, the ratified acts are deemed to have been concluded by the company from the outset.

In a ruling dated June 18, 2025,¹ the French Cour de cassation clarifies that compliance with the legal procedures provided for by French corporate law is the only mean of securing the retroactive adoption of pre-incorporation acts as of their original date, once the company has been duly registered. The mere inclusion of a substitution clause in the relevant contracts is insufficient to produce this effect.

Retroactive Adoption of Pre-Incorporation Acts cannot Result Solely from the Intent of the Parties

In the case at hand, a creditor sought to enforce a claim against a company based on a contract entered into during its formation period. The Court of Appeal held that the contract, signed with the director of the company in formation, had not been validly ratified upon registration, as the legal procedures governing the retroactive adoption of pre-incorporation acts had not been followed.

The French Cour de cassation upheld this decision and accordingly dismissed the appeal. The judges affirmed that adoption of an act concluded during a company’s formation period cannot stem solely from the mutual agreement or intention of the parties. Such adoption must strictly comply with the legal and regulatory provisions governing the procedures for adopting commitments made on behalf of a company in formation.

While the Cour de cassation has, in recent case law,² relaxed the conditions for the admissibility of ratifiable acts—extending this to acts that do not expressly state they were concluded “in the name of” or “on behalf of” the company in formation—its decision of June 18, 2025 underscores that compliance with the legal adoption procedures remains essential to benefit from retroactive effect as of the date of the act. This decision stands in contrast to recent decisions by the Court,³ which appeared to allow the retroactive effect of substitution clauses, thereby prioritizing the parties’ intent over strict adherence to statutory retroactive adoption procedures.

The substitution clause may remain valid under general contract law but it does not enable the company to benefit from the retroactive adoption as of a date prior to its registration. Only the specific procedures set out in French corporate law permit such retroactive effect.

How Pre-Incorporation Acts May Be Adopted by Newly-Formed Companies Under French Law

The procedures specific to corporate law are set out in Article 1843 of the French Civil Code and Article 6 of Decree No. 78-704 dated July 3, 1978 for civil companies, and in Articles L. 210-6, R. 210-5 et seq. of the French Commercial Code as well as Article 6 of the same decree for commercial companies.

Pre-Incorporation Acts Eligible for Retroactive Adoption

Only contractual commitments undertaken in preparation for the business activity of companies in formation are eligible for retroactive adoption. Other forms of liability, such as those arising in tort, are excluded, as well as licences and administrative authorizations.

Although the 2023 ruling of the Cour de cassation above-mentioned relaxed the conditions for the admissibility of ratifiable acts, it is still recommended to expressly state in the contracts concerned that they are made “in the name and on behalf of” the company in formation.

Indeed, it must be demonstrated that the other party was fully informed and consented to contracting with a company in formation, and that the act would subsequently be adopted by said company. The main characteristics of the company in formation—such as its name, legal form, share capital, and registered office—should be specified in the contract to enable the other party to clearly identify the future legal entity.

Statutory Schemes for Adopting Acts Entered into by Companies During their Formation Period

French corporate law provides for three adoption procedures, depending on the timing of the contract’s conclusion:

• Statement of pre-incorporation acts appended to the articles of incorporation: if the contract is concluded before the articles of incorporation are signed, it must be listed in a statement of acts entered into on behalf of the company in formation, which must be scheduled to the articles. Signing the articles allows for retroactive ratification of the listed acts as of their execution date, if the company is duly registered.
• Special mandate given to the shareholders and/or directors: if specific contracts must be entered into between the signing of the articles and the company’s registration, shareholders must give a mandate to one of them and/or to the appointed directors to enter into such specific commitments on behalf of the company. This mandate cannot cover acts performed before the articles are signed. It may be included in the articles or in a separate document, but it cannot be replaced by the mere signing of the considered contract by all founding shareholders. The mandate must be specific, not general, i.e. it must define the nature of the agreements concerned and their terms and conditions.
• Shareholders’ resolution: if agreements were concluded on behalf of the company before its registration without complying with one of the above procedures, they may nevertheless be ratified by a resolution of the shareholders (or sole shareholder), passed by a simple majority (unless another majority rule is provided for in the articles of association). Implicit ratification is excluded.

Legal Status of Signatories and Implications of Failure to Achieve Retroactive Adoption

Until the company is registered or the agreement is expressly ratified by a shareholders’ resolution, those who have signed, or have given mandate to the signing of, an agreement remain personally and jointly liable for the commitments undertaken. However, once the company is registered or the agreement is duly ratified, they are released from liability—unless a personal guarantee was explicitly granted—and the act is deemed to have been concluded by the company from the outset.

If the agreement is not ratifiable, or if none of the applicable adoption procedures have been properly followed, the shareholder(s) who entered into the agreement remain personally bound. They may face financial or legal consequences if they are unable to fulfill those obligations, unless they can demonstrate that the agreement was entered into in the name of a non-existent company.

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1. Cass. com., June 18, 2025, n°24-14.311 ↩︎
2. Cass. com., November 29, 2023, n°22-12.865 ; Cass. com., November 29, 2023, n°22-18.295 ; Cass. com., November 29, 2023, n°22-21.623 ↩︎
3. Especially: Cass. Com, January 15, 2020, n°17-28.127 ↩︎

In a ruling dated February 12, 2025,¹ the French Cour de cassation reaffirmed that only the annual general meeting convened to approve the accounts of the past fiscal year has the authority to decide on dividend distributions drawn from the ‘retained earnings’ account.

This decision provides much-needed clarification following the divergent positions taken by lower courts in recent years.

The Shareholders’ Annual General Meeting Holds Exclusive Authority Over the Allocation of Retained Earnings.

At a general meeting held on April 30, 2017, the shareholders of a French simplified joint-stock company approved the accounts of the last ended fiscal year and allocated the profit made to the “retained earnings” account. At as second general meeting held two months later, the shareholders decided to distribute dividends drawn from these retained earnings. Following the sale of all the company’s shares, the former shareholders brought legal action against the company seeking payment of the dividend.

The Rules Governing Dividend Distributions by Commercial Companies

It is worth recalling that the distribution of dividends by French commercial companies is governed by articles L. 232-11 and L. 232-12 of the French Commercial Code, which provide as follows:

• Article L. 232-11 defines the distributable profit as “the profit for the fiscal year, less any prior losses and amounts to be allocated to statutory or legal reserves, and increased by retained earnings;”
• The second paragraph adds that “the general meeting may decide to distribute amounts taken from available reserves. In such cases, the resolution shall expressly specify the reserve accounts from which the funds are withdrawn. However, dividends are primarily drawn from the distributable profit of the fiscal year.“
• Article L. 232-12 further provides that the general meeting determines the portion of distributable profit to be distributed to shareholders as dividends “after the approval of the annual accounts and confirmation of the existence of distributable amounts.”

These provisions raise the question whether the amounts allocated to the “retained earnings” account by the most recent annual general meeting were included in the “distributable amounts” it acknowledged. This would determine whether a subsequent meeting could distribute them.

The Position of the French Cour de cassation

In response to this question, the Court states that: “Retained earnings from a fiscal year are included in the distributable profit of the following fiscal year and, consequently, only the meeting approving the accounts of that fiscal year has the authority to decide on their allocation and, if applicable, their distribution.“

The Court thus closes the door on mid-year distribution of amounts drawn from retained earnings. This position is consistant with the usual understanding that the general meeting has not decided on the allocation of these amounts and has deferred that decision to the following year. Therefore, they are not part of the distributable profit of the considered fiscal year. Instead, they are added to the profit of the subsequent year, which the annual general meeting may then decide to distribute, allocate to reserves, or maintain as retained earnings.

The Court emphasizes the mandatory nature of these provisions, highlighting that any decision to distribute said retained earnings made outside the general meeting convened to approve the annual accounts is at risk of being null and void.

> Read also : « Reform of Corporate Nullities Under French Law »

Practical Consequences of the Decision

The distribution of retained earnings being forbidden, the alternative lies in the payment of interim dividends during the fiscal year. However, this mechanism is subject to strict conditions laid out in Article L. 232-12, paragraph 2 of the French Commercial Code:

• before any interim dividend can be distributed, the existence of distributable amounts must be verified—namely, profits that may be distributed without compromising the company’s financial stability;
• interim dividends may only be distributed if the general meeting has not yet made a decision regarding the allocation of the results for the considered fiscal year.

Finally, Article R. 232-17 of the French Commercial Code provides that the board of directors, the executive board, or the managers, as the case may be, are authorized to decide on the payment of an interim dividend and to determine both its amount and payment date.

A Greater Flexibility in the Distribution of Company’s Reserves?

This decision follows a series of first-instance and appellate rulings that had cast doubt on which amounts could be distributed during the course of the year. Lastly, a recent decision by the Paris Court of Appeal suggests that, unlike retained earnings, reserves may indeed be distributed outside of the annual general meeting.

The 2022 Paris Commercial Court Ruling Opposing Dividend Distributions Outside the Annual General Meeting

In a judgment dated September 23, 2022,² the Paris Commercial Court put an end to the widespread practice of distributing dividends from reserve accounts during the year.

Adopting a strict interpretation of Article L. 232-11 of the French Commercial Code—contrary to prevailing practice and legal commentary—the Court held that only the annual general meeting convened to approve the accounts is authorized to decide on such a distribution.

This restrictive interpretation was justified by the underlying purpose of the relevant provisions. They are intended to ensure that the company demonstrates a distribution capacity compatible with preserving its financial soundness.

2025 Paris Court of Appeal Eases Stance on Dividends from Reserves

By a decision rendered early this year,³ the Paris Court of Appeal offered a different interpretation. Contrary to the retained earnings, the amounts recorded in reserve accounts must have been allocated by a prior annual general meeting. These amounts represent profits accumulated over time and thus constitute enduring assets. Consequently, their distribution may be permitted outside the annual general meeting approving the accounts.

In the absence of a decision from the French Cour de cassation, the position of the Paris Court of Appeal thus provides some comfort for possible distributions during the year by drawing on the reserves.

From a practical standpoint, such distributions during the year must be carried out with careful attention to ensure they do not undermine the company’s financial stability. Even more when they occur late in the fiscal year,

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1. French Cour de cassation, February 12, 2025, n°23-11.410 ↩︎
2. Paris Commercial Court (Tribunal de commerce), Commercial section, 16th Chamber, September 23, 2022, n°J2021000542 ↩︎
3. Paris Court of Appeal (Cour d’appel), January 30, 2025, n°22/17478 ↩︎

French corporate law has traditionally adopted a prudent approach toward the sanction of nullity, aiming to contain its potentially disruptive effects. Indeed, a company brings together a wide range of stakeholders—shareholders, directors, employees, clients, lenders, and suppliers—who may be directly or indirectly affected by the nullity of the legal entity itself or its corporate decisions.

In this context, the reform implemented by the Government Ordinance dated March 12, 2025¹ seeks to clarify the nullity regime and enhance legal certainty, drawing on the conclusions of the 2020 Report by the Haut Comité Juridique de la Place financière de Paris (HCJP)² and the recommendations of the French Conseil d’État dated July 4, 2024³. It also aligns French corporate law with the European Directive dated June 14, 2017⁴.

Clarifying the Nullity Regime in French Corporate Law

The ordinance unifies the nullity regime in corporate law by removing general provisions from the Commercial Code, now integrated into the Civil Code. Articles 1844-10 et seq. of the Civil Code become the common law applicable to all companies, regardless of their corporate form. Specific provisions remain in the Commercial Code for certain types of companies, as well as for restructuring and equity operations.

The reform also introduces terminological clarification by referring to the nullity of “corporate decisions” rather than “acts and deliberations.” This distinction is meaningful, as it narrows the scope of the specific nullity regime to the company’s internal decision-making acts, thereby excluding mere opinions and recommendations. It also excludes contracts with third parties, whose nullity is governed by general contract law. Notably, Article L.228-59 of the Commercial Code expressly extends the nullity regime applicable to corporate decisions to resolutions adopted by bondholders’ general meetings.

Redefining Grounds for Nullity

Company Formation

Under the new regime, a company may only be declared null on two grounds: the incapacity of all founding shareholders or a breach of the rule requiring a minimum of two shareholders to incorporate the company, when applicable (Article 1844-10, para. 1, Civil Code). This formulation eliminates numerous grounds for nullity, aligning French law with the European Directive dated June 14, 2017 and the case law of the French Cour de cassation. However, the reform goes further by implicitely excluding nullity in cases involving the absence of essential elements of the company (Article 1832, Civil Code), breaches of general contract law, or an unlawful corporate purpose. Instances of fraud or fictitious companies are also not addressed by Article 1844-10, but nullity might still be pursued on other legal grounds in such circumstances.

Capital Contributions

The new Article 1844-10-1 of the Civil Code aligns the grounds for nullity of capital contributions with the new regime applicable to corporate decisions. The nullity of a contribution results in the cancellation of the shares issued in return and the restitution by the company of any obligations already performed by the contributor. If all contributions are declared null, the company must be dissolved and undergo liquidation.

Corporate Decisions

Corporate decisions may now be declared null only on the grounds of “violation of a mandatory provision of corporate law (excluding the last paragraph of Article 1833) or one of the general grounds for contracts nullity.” Thus, whereas nullity previously required an explicit legal provision, the new regime allows for nullity in cases of violations of mandatory corporate law provisions (so-called “virtual nullities”). This shift grants judges greater discretion to determine the mandatory nature of a provision and its relevance to corporate law. To structure this judicial discretion, the reform introduces a “triple test” mechanism and seeks to limit the occurrence of cascading nullities (read below).

To be noted that the nullity of corporate decisions for breach of the bylaws is now excluded unless otherwise expressly provided by law. However, in simplified joint-stock companies (SAS), the bylaws may provide the nullity of decisions made in violation of their provisions, in accordance with Article L.227-20-1 of the Commercial Code. Such actions for nullity are governed by Articles 1844-10 et seq. of the Civil Code.

The “Triple Test”: A Nuanced Approach to Nullity of Corporate Decisions

Article 1844-12-1 of the Civil Code introduces the “triple test” mechanism. A judge may declare an irregular corporate decision null and void only if all three of the following criteria are met:

• Existence of a Grievance: The claimant must demonstrate that the irregularity infringed upon the interest protected by the violated rule.

• Influence on the Decision: It must be established that the irregularity had an impact on the outcome of the contested decision.

• Proportionality of Consequences: The judge must verify that the effects of nullity are not excessively detrimental to the company’s interest, considering the prejudice suffered.

This mechanism ends the automatic declaration of nullity, allowing for a more balanced assessment of disputed cases. However, exceptions apply where the ordinance explicitly excludes the application of Article 1844-12-1, thereby preserving automatic nullity in specific instances.

Preventing “Cascading Nullities”

In order to mitigate the disruptive effects of “cascading nullities” and enhance the stability of corporate decisions, the reform introduces two mechanisms in Articles 1844-15-1 and 1844-15-2 of the Civil Code:

• Protection of decisions adopted by an irregularly composed body: the nullity of the appointment or irregular continuation in office of a corporate body or one of its members does not automatically result in the nullity of the decisions taken by that body. This rule, previously applicable to joint-stock companies, is now extended to all corporate forms..

• Deferred effects of nullity: Judges may defer the effects of a nullity decision when its retroactive enforcement would have manifestly excessive consequences for the company’s interest.

Reducing the Limitation Period for Nullity Actions

The general limitation period for nullity actions in corporate matters is reduced from three to two years (Article 1844-14, Civil Code). This measure aims to enhance legal certainty by encouraging parties to act within shorter timeframes.

Specific Regime for Equity Reorganisations in Joint-Stock Companies

Capital Increases

Regarding the nullity of joint-stock companies’ share capital increases, the ordinance introduces specific limitation periods under Articles L.22-10-55-1 and L.225-149-4 of the Commercial Code:

• For listed companies: Actions for nullity are no longer admissible once the share capital increase is completed, due to the fungibility of shares and centralized transactions;

• For other companies: Actions for nullity may be brought within three months from the date of the general meeting or the contested decision.

Additionally, Article L.225-149-5 of the Commercial Code provides that the nullity of a share capital increase decision is enforceable against all subscribers, by exception to Article 1844-16 of the Civil Code.

Mergers, Demergers, and Other Restructuring Transactions

With respect to restructuring transactions involving joint-stock companies, the provisions governing their nullity regime have been relocated to Articles L.236-2-1 (for mergers) and L.236-19-1 (for demergers) of the Commercial Code.

The nullity of a restructuring transaction may only result from the nullity of the resolution adopted by one of the approving general meetings or from the failure to file the required certificate of compliance. Legal action is time-barred six months from the date of the last registration in the Trade and Companies Register required by the transaction. The court may grant the companies concerned a period to remedy the irregularity, where regularisation is possible.

Importantly, nullity does not affect obligations arising between the effective date of the annulled transaction and the publication of the court’s nullity decision. Participating companies remain jointly liable for fulfilling these obligations.

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The ordinance dated March 12, 2025, will come into effect on October 1, 2025. Its application to companies formed and corporate decisions made before this date must be analyzed specificaly, taking into account the act whose nullity is sought and the legal grounds invoked.

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1. Ordinance No. 2025-229 of March 12, 2025, Reforming the Regime of Nullities in Corporate Law ↩︎
2. Report on Nullities in Corporate Law, Haut Comité Juridique de la Place financière de Paris (HCJP), March 27, 2020 ↩︎
3. Note on the Simplification of the Nullity Regime in Corporate Law (Livre II of the French Commercial Code), French Conseil d’Etat, July 4, 2024 ↩︎
4. Directive (EU) 2017/1132 of the European Parliament and of the Council of 14 June 2017 relating to certain aspects of company law ↩︎

On April 16, 2025, the European Union published the “Stop the Clock” Directive¹, part of the broader “Omnibus Package,” which postpones the application of the Corporate Sustainability Reporting Directive (CSRD)² and the Corporate Sustainability Due Diligence Directive (CS3D)³. In swift alignment, France enacted the DDADUE 2025 Law⁴ on May 2, 2025, updating national legislation in accordance with the revised CSRD calendar.

This postponement was justified by the intention to first observe the initial reports published by large listed companies before extending the obligations under the CSRD to a broader group of firms, and more broadly, to allow companies time to adapt their reporting and compliance systems — with the aim of strengthening the competitiveness of European businesses.

Additional regulatory adjustments are currently under discussion at the EU level as part of the upcoming “Omnibus II Package.”

Postponement of Sustainability Reporting Deadlines under the CSRD

The “Stop the Clock” Directive brings a major adjustment to the CSRD timeline by postponing sustainability reporting obligations for the second and third waves of companies initially targeted by the CSRD:

• Wave 2 companies — defined as those meeting at least two of the following three criteria: over 250 employees, annual turnover exceeding €50 million, or total assets above €25 million — were originally required to begin reporting in 2026. This deadline has now been postponed to 2028, for financial years starting in 2027.

• Wave 3 companies, which include SMEs listed on regulated markets, were initially expected to begin reporting in 2027. They will now be required to comply starting in 2029, for financial years beginning in 2028.

Importantly, Wave 1 companies — publicly listed firms with more than 500 employees and annual revenues above €50 million — are not affected by the postponement. They remain subject to the original reporting obligations.

As for Wave 4 entities — non-EU companies generating more than €150 million in annual turnover within the EU and operating through a subsidiary covered by CSRD or a branch with annual turnover exceeding €40 million — the reporting schedule also remains unchanged. Their first reports will be due in 2029, in respect of financial years starting in 2028.

Delay in the Implementation of the Due Diligence Obligations under CS3D

The “Stop the Clock” Directive also affects the timeline for implementing the CS3D, which imposes due diligence obligations on companies regarding environmental protection and human rights. For the first wave of companies—those with more than 5,000 employees and global turnover exceeding €1.5 billion—the application of the CS3D is now postponed by one year. These companies must be fully compliant by July 26, 2028.

However, no delay has been granted for other companies falling within the scope of the CS3D. Their compliance deadlines remain unchanged.

EU Member States have been granted an extended deadline of July 26, 2027, to transpose the directive into national law.

Implementation into French Law of the CSRD Timeline Postponement and Easing of ESG Reporting Obligations

The French “DDADUE law”, published on May 2, 2025, aligns French national law with the CSRD timeline adjustments introduced by the “Stop the Clock” Directive. It amends the deadlines originally set by Ordinance No. 2023-1142 of December 6, 2023, and also introduces regulatory changes aimed at easing or clarifying certain ESG obligations.

Removal of Criminal Sanctions under the CSRD

Article L. 822-40 of the French Commercial Code, which imposed criminal penalties for failure to appoint a sustainability information auditor or for obstructing the certification process, has been repealed. These offenses were previously punishable by up to two and five years’ imprisonment, and fines of €30,000 and €75,000 respectively.

Exemption from Mandatory GHG Emissions Reporting (BEGES)

Certain companies already required to publish a GHG emissions report (BEGES) under Articles L. 232-6-3 and L. 233-28-4 of the French Commercial Code are now exempt from doing so under Article L. 229-25 of the French Environmental Code.

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1. Directive (EU) 2025/794 of the European Parliament and of the Council of 14 April 2025 amending Directives (EU) 2022/2464 and (EU) 2024/1760 as regards the dates from which Member States are to apply certain corporate sustainability reporting and due diligence requirements ↩︎
2. Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting ↩︎
3. Directive (EU) 2024/1760 of the European Parliament and of the Council of 13 June 2024 on corporate sustainability due diligence and amending Directive (EU) 2019/1937 and Regulation (EU) 2023/2859 ↩︎
4. Loi n° 2025-391 du 30 avril 2025 portant diverses dispositions d’adaptation au droit de l’Union européenne en matière économique, financière, environnementale, énergétique, de transport, de santé et de circulation des personnes ↩︎

The legal consequences of mergers by absorption have been the subject of several judicial clarifications in recent years, whether regarding the fate of guarantors, the transfer of liabilities, or procedural nuances. Recently, in a decision delivered on 15 January 2025 (No. 23-84.906), the Criminal Division of the French Court de Cassation confirmed that merger by absorption results in the extinction of the legal personality of the absorbed company, preventing it from initiating legal proceedings. A procedural irregularity before the first-level court cannot be remedied by the subsequent appearance of the absorbing company at the appeal stage.

The Procedural Consequences of the Loss of Legal Personality Resulting from the Merger by Absorption

A company, absorbed through a merger on 1 January 2016, had joined proceedings as a civil party during a criminal court hearing on 1 February 2017. At the appeal hearing, however, the absorbing company assumed its rights and, in turn, entered the proceedings as a civil party.

In its appeal to the French Cour de cassation, the claimant criticized the Appeal Court for admitting the absorbing company into the proceedings, despite the fact that it had not been a party at first-level court hearing.

The French Cour de cassation cancelled the Appeal Court decision for lack of reasoning. According to the High Court, it should have been verified whether, at the time of the hearing on 1 February 2017, the absorbed company still had a valid legal existence allowing it to act in court. In other words, if the merger had already taken effect and resulted in the loss of the absorbed company’s legal personality, it no longer had the capacity to participate in the proceedings.

A Decision in Line With Established French Case Law

Ultimately, this decision is consistent with well-established case law of the French Cour de Cassation, which consistently holds that the loss of legal personality of an absorbed company results in its inability to act in court. Such an irregularity cannot be remedied by the subsequent intervention of the absorbing company.

The Commercial Division of the French Cour de Cassation had previously ruled that an appeal filed by a company lacking legal personality could not be regularized by the subsequent joinder of the absorbing company (Commercial Division, 13 March 2019, No. 17-20.252). Similarly, the Court held that a summons issued by an absorbed company was irregular if the company had lost its legal existence at the time of initiating proceedings (2^nd Civil Division, 12 February 2004, No. 02-13.672).

This decision also echoes a previous decision by the French Cour de Cassation (2^nd Civil Division, 8 September, 2022, No. 21-11.892), in which the claimant had sued a company that no longer had legal existence. Although the absorbing company voluntarily joined to the proceedings, the High Court ruled that this fundamental irregularity could not be rectified by the absorbing company’s participation.

More recently, the Court further clarified procedural rules by stating that the opposing party must address claims to the absorbing company when it succeeds the absorbed company (Commercial Division, 18 September 2024, No. 23-13.453).

Thus, the French Cour de Cassation appears to have significantly clarified procedural disputes concerning the consequences of mergers by absorption, particularly regarding the loss of legal personality and capacity to litigate in various situations (summons, continuation of proceedings, etc.).

Although the decision discussed in this article is not published in the Court’s Bulletin, it nonetheless provides valuable clarification on the application of principles previously outlined by the Court.