French Commercial code
In forceThe sole trader is a natural person who carries on one or more independent professional activities in his own name.
The assets, rights, obligations and securities which he holds and which are useful for his activity or his independent professional activities constitute the professional assets of the sole trader. Subject to Book VI of this Code, these assets may not be divided. The elements of the assets of the sole trader not included in the professional assets constitute his personal assets.
The distinction between the personal and professional assets of the sole trader does not authorise him to act as guarantor for a debt for which he is the principal debtor.
By way of derogation from articles 2284 and 2285 of the Civil Code and without prejudice to the legal provisions relating to the unseizability of certain assets, in particular section 1 of this chapter and article L. 526-7 of this Code, a sole trader is only obliged to fulfil his commitment to his creditors whose rights have arisen in connection with his professional practice out of his business assets alone, unless he provides security by agreement or waives it under the conditions set out in article L. 526-25.
Debts owed by the sole trader to the bodies responsible for collecting social security contributions and contributions arise in the course of his business.
Only the sole trader's personal assets constitute the general pledge of creditors whose rights did not arise in the course of his business. However, if the personal assets are insufficient, the creditors' right of general pledge may be exercised over the business assets, up to the amount of the profit made in the last financial year for which the accounts have been closed. In addition, security interests granted by the sole trader prior to the commencement of his business or independent professional activities retain their effect, regardless of their basis.
The burden of proof lies with the sole trader for any challenge to enforcement measures or protective measures that he raises concerning whether or not certain assets are included within the scope of the creditor's general lien. Without prejudice to article L. 121-2 of the Code of Civil Enforcement Procedures, the seizing creditor may be held liable for misuse of the seizure where he has carried out a compulsory enforcement measure or a precautionary measure on an asset that is clearly not part of his general pledge.
In the event that a sole trader ceases all independent professional activity, the professional and personal assets are combined. The same applies in the event of the death of the sole trader, subject to articles L. 631-3 and L. 640-3 of this code.
The conditions for application of this article are defined by decree in the Conseil d'Etat.
