Your partner's solvency ? A main issue for you...
Before starting any business in France, checking your partner's solvency, is an ENSSENTIAL issue;
Many elements should be check as firstly the right identification of the Cie ( address, registered number, activities / or bankrupcy, ) the balance sheet, which is a summary of the financial situation of an undertaking business, debt, expenses, fixed asset turnover, debts situation which is an important indicator in order to know the solvency and reliability of your future partners etc...
The French rules require from each company such an information to be provided, from its constitution to its "death";
Some essentials elements are as follows :
1 - the Certificate of registration of the Company - called K-BIS, which is the true updated "identity card" for a company registered in France;
This document, which can be defined as the updated civil status of companies, includes all of the information that the company is required to declare and record;
This document certifies the legal existence of the company and provides authentic information ( certified by the official Clerck) as its business, its management, administrative, financial or control bodies, as well as the existence or not of insolvency proceedings brought against it.
In most cases, to be enforceable, the Kbis extract requested must be less than 3 months old.
You should be then sure to send invoices not to a fictitious company ; It s therefore vital for clients to check the KBIS which is the only official document proving the legal existence of a company;
2 - Debt report/statement : This document summarizes any lien and pledge registrations, as well as the registrations made to prove the existence of a property right (leasing arrangements, rental agreements, title retention clauses) or an outstanding debt, therefore is a real key indicator of the company's financial health;
Registering a pledge also gives a creditor a preferential right on certain assets given priority in the payment of the debt / Registering a lien at the registry office of the Commercial Court gives a creditor the priority right with respect to other creditors, across all the debtor's assets (fixed or movable), or only some of them.
3 - Article of Association / Status: They mention the legal rights and obligations which bind the shareholders whether they are individuals or legal entities within a company and with respect to third parties. They aslo define its goals and operations. From themyou can find out:
• the general characteristics of the company (legal form, name, registered office, duration, business purpose, etc.);
• the registered share capital and its breakdown (number and value of each share, sales terms, etc.);
• the names of the shareholders and legal entities and anything that is relevant to the company's administration.
4 - Company Annual Account: This document includes the balance sheet, the profit and loss statement and the notes to the financial statement.
5 - Insolvency Proceedings: They organise the settlement of the debts for a company in insolvency.
They can be ordered by the Commercial Court l and are of several kinds :
- A bankruptcy protection procedure, initiated by the company's managing director, if the company is not in insolvency;
- A court-ordered receivership or liquidation, if the company is in a state of insolvency.
Insolvency proceedings interrupt the legal proceedings, and are subject to publication requirements.
6 - Company Tracking : track a company and receive alerts when an event concerning it occurs as the modification to the entry at the Trade and Companies Register, filing annual accounts, instruments filed at the registry office, updates to debt statements etc.
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