Section 1: General provisions (R)

Articles in this section · 7

R2321-1R2321-2R2321-3R2321-4R2321-5R2321-6R2321-7

Article R2321-2

French General Code of Local AuthoritiesIn force
Ask for lawyer reviewed or certified translation

Updated 5 Nov 2023

For the application of 29° of article L. 2321-2, a provision must be made by the mayor in the following cases:

1° As soon as litigation is initiated against the municipality at first instance, a provision is set aside for the amount estimated by the municipality of the expense that could result based on the financial risk incurred;

2° As soon as collective proceedings are initiated as provided for in Book VI of the Commercial Code, a provision is set aside for loan guarantees, loans and receivables, cash advances and equity holdings granted by the municipality to the body that is the subject of the collective proceedings. This provision is set aside to cover the risk of irrecoverability or depreciation of the debt or equity investment, as estimated by the municipality. The provision for profit-sharing also takes into account the risk of the entity's liabilities being discharged. In the case of loan guarantees, the provision is set aside for the amount that calling on the guarantee would represent for the municipality's budget depending on the financial risk incurred;

3° When the recovery of outstanding debts on third-party accounts is compromised despite the diligence of the public accountant, a provision is set aside for the amount of the risk of irrecoverability estimated by the municipality based on the information provided by the public accountant.

In other cases, the mayor may decide to set aside provisions as soon as a proven risk appears.

For all of the provisions provided for in the previous paragraphs, the mayor may decide to set aside the provision over several financial years prior to the realisation of the risk.

The provision is adjusted annually according to the development of the risk.

It gives rise to a reversal in the event of the realisation of the risk or when the risk is no longer likely to occur.

The amount of the provision, as well as its development and use, are recorded on the statement of provisions attached to the budget and the administrative account.

>
Mariela Petrova

Need help applying this article to your situation?

A registered French Lawyer explains what applies to your business — in English, fixed fee.

within 48h

Fixed Fee

Talk to a lawyer
Previous articleArticle R2321-1Next articleArticle R2321-3
Common Questions

Working with a corporate lawyer in France — Q&A

Any time a strategic decision changes how the company is owned, governed or contractually bound — incorporation, fundraising, M&A, restructuring, shareholder agreements, or major commercial contracts. Earlier engagement always costs less than later remediation.

A notary (notaire) is a public officer who authenticates specific deeds (mainly real-estate transfers and certain family-law acts). A corporate lawyer (avocat) advises on strategy, negotiates and drafts company documents, and represents you in disputes. The two roles complement rather than overlap.

Yes — most of our clients are foreign suppliers, investors or holding entities. We bridge the gap between French law and your home jurisdiction's expectations and deliver everything bilingually.

The SAS (Société par Actions Simplifiée) is the default choice for most international structures: flexible governance, single shareholder allowed, no minimum capital, and works cleanly with foreign holding entities. We assess SARL, SA, SCI on the merits when the situation calls for it.

Yes — communications with a French avocat are protected by the secret professionnel (Article 66-5 of the Law of 31 December 1971). This protection is broader than the common-law attorney-client privilege and applies to written and oral exchanges.

We work on fixed fees for clearly scoped engagements (incorporation, contract drafting, audits) and on monthly retainers for ongoing advisory. Hourly billing is the exception, not the default. You always know the cost before work starts.

Typical timeline is 2–3 weeks from KYC kick-off to RCS registration, assuming standard documentation. Holding-company structures, foreign-shareholder identification or in-kind contributions can extend this — we flag the gating items at the first meeting.

Absolutely. We routinely coordinate with your in-house counsel, expert-comptable or notaire — pragmatic collaboration is the norm, not the exception. We send them everything they need to do their part without duplicating work.

Mariela Petrova

Mariela Petrova

Avocate au Barreau de Paris

Toque #C2396

15+ Years In Corporate Practice

English · French · Russian

Ready When You Are

Talk To A Corporate
Lawyer In France.

A 20–30 minute call, in English, to scope the engagement. No obligation, no preliminary fee. You will leave the call with a clear view of what the work will cover and what it will cost.

Talk To A Corporate Lawyer+33 1 84 88 31 00
First EngagementFixed Fee

Talk to a French lawyer.

Reply within 24 hours.

Communications protected by professional secrecy — secret professionnel de l'avocat, Article 66-5 of the Law of 31 December 1971.

Continue Reading

Related corporate services in France

01 / Setup

Setting up a French company

Choose between SAS, SARL, SA or SCI — and structure your first French entity around how you actually plan to operate.

Read More
02 / Operating

French commercial contracts

Distribution, agency, supply, services and IP licences — drafted around the protections French law actually gives.

Read More
03 / Disputes

Business disputes & litigation

Shareholder conflicts, commercial breaches and pre-litigation strategy — handled by the same team that knows the file.

Read More