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Filing for Insolvency in France Protect What Matters with the Right Legal Step
Act early. Act correctly. Our French corporate lawyers and paralegals handle the full insolvency filing process from start to finish: assessing your company’s financial position, identifying the applicable procedure, drafting and filing the declaration at the Commercial Court, and representing your company throughout the proceedings to protect shareholders, directors, and employees.
Why Filing for Insolvency at the Right Time Is Critical in France?
Insolvency law in France is not simply a system for closing failing businesses. It is a sophisticated legal framework designed primarily to save viable companies, preserve employment, and satisfy creditors in an orderly manner — with judicial liquidation as the last resort, not the default outcome.
French law imposes a legal obligation on directors of insolvent companies to file for insolvency proceedings within 45 days of the company becoming unable to pay its debts as they fall due with its available assets — a state known as cessation des paiements. Failure to file within this deadline exposes directors to personal liability for the company’s debts, criminal sanctions for banqueroute (fraudulent trading), and disqualification from managing any French company in the future.
Filing on time, by contrast, triggers the protection of the court and opens access to one of three principal procedures — each designed for a different financial situation:
- Sauvegarde (Safeguard): available to companies that are not yet insolvent but face difficulties they cannot overcome alone. It allows the company to negotiate a restructuring plan under court supervision while continuing to operate, with an automatic stay on creditor actions.
- Redressement judiciaire (Judicial Recovery): available to companies that are insolvent (en cessation des paiements) but whose recovery is not manifestly impossible. The court appoints an administrateur judiciaire to assist management and a mandataire judiciaire to represent creditors. The outcome is a restructuring plan or, if recovery proves impossible, conversion to liquidation.
- Liquidation judiciaire (Judicial Liquidation): applicable when recovery is manifestly impossible. The company ceases activity, an administrateur judiciaire realises assets, pays creditors in order of priority, and the company is ultimately struck off the register.
A fourth mechanism — the procédure de conciliation — is a confidential pre-insolvency negotiation procedure available before cessation des paiements is reached, allowing the company to negotiate with its main creditors under court-appointed conciliator supervision.
Choosing the right procedure, filing at the right moment, and presenting the company’s situation correctly to the court are decisions that determine whether the business survives, whether directors are protected, and whether shareholders recover any value.
Main Advantages of Filing Correctly and on Time:
Director protection: timely filing within the 45-day deadline limits personal liability exposure and eliminates the risk of criminal prosecution for banqueroute.
Automatic stay on creditor actions: from the date of filing, creditors are prohibited from initiating or continuing enforcement actions, giving the company breathing space to restructure.
Access to court-supervised restructuring: sauvegarde and redressement judiciaire give viable businesses the legal framework to renegotiate debts, terminate unprofitable contracts, and implement a recovery plan.
Employee protection: wages owed to employees are guaranteed by the AGS (Association pour la Gestion du Régime de Garantie des Créances des Salariés), which advances unpaid salaries in the event of insolvency.
Preservation of business value: early intervention through sauvegarde or conciliation — before insolvency is declared — maximises the chances of preserving the going concern value of the business.
Filing at the right time with the right legal support is not an admission of failure. It is the most responsible and legally protected decision a director can make when a company faces financial difficulty.
How to File for Insolvency in France?
Filing for insolvency proceedings in France follows a structured legal process. With FrenchCo.lawyer, everything is managed for you in five clear, legally protected steps:
Financial Assessment
We immediately review your assets, liabilities, cash flow, and payment position to determine whether cessation des paiements has been reached and which procedure — sauvegarde, redressement judiciaire, liquidation judiciaire, or conciliation — best fits your situation.
Preparing the Dossier
We draft the déclaration de cessation des paiements (or sauvegarde petition) and assemble the complete court dossier: financial statements, creditor list, employee list, cash flow statement, asset and liability schedule, and the director's sworn declaration.
Filing at the Commercial Court
We file the dossier at the competent Tribunal de commerce, represent the company at the opening hearing, and make submissions in support of the most favourable procedure. The court appoints the relevant judicial officers and opens the période d'observation if applicable.
Managing the Observation Period
We assist management throughout the période d'observation: coordinating with the administrateur judiciaire, responding to creditor claims, managing employee obligations, and preparing the recovery or restructuring plan.
Recovery Plan or Liquidation
At the close of the observation period, we represent the company as the court approves a recovery plan, a going concern sale, or, where unavoidable, conversion to liquidation — advocating for the best possible outcome at every hearing.
With FrenchCo.lawyer
From first assessment to final hearing — confidential, rigorous, and focused entirely on protecting your company and its directors.
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What We Need From You to File for Insolvency in France?
To assess your situation and prepare the insolvency filing dossier, please provide:
Current Company Details
Company name, registration number (SIREN), legal form, registered office address, latest Kbis extract, and current bylaws. Identity and contact details of all directors and, where applicable, majority shareholders.
Financial Statements and Cash Flow Position
Last two approved annual accounts (bilans and comptes de résultat), most recent management accounts, current bank statements, and a statement of the company's current cash position and projected cash flow over the next 30 to 90 days.
List of Creditors and Outstanding Liabilities
A complete list of all creditors — banks, suppliers, tax authorities (URSSAF, SIE), landlords, employees — with the amounts owed to each and the date on which each debt fell due. This is a mandatory component of the court dossier and must be accurate.
Employee Information
Total number of employees, their contractual status, and details of any wages, holiday pay, or severance amounts currently outstanding. The AGS guarantee mechanism requires accurate employee data from the outset.
Key Contracts and Assets
List of material ongoing contracts (leases, supply agreements, financing arrangements), together with a summary of the company's main assets — equipment, intellectual property, real estate, receivables, and stock.
And Then?
Once we receive these elements, our lawyers conduct an immediate legal and financial assessment, advise on the most appropriate procedure, prepare the complete court dossier, and file the declaration within the applicable deadline. We represent the company at the opening hearing and throughout the subsequent proceedings — ensuring that every step is taken correctly and in the company's best interests.
Filing for Insolvency in France Urgent Process, Clear Support
Flat legal fee starting from €1,500 excl. taxes for initial assessment and declaration filing
Additional costs: court filing fees + ongoing representation fees during the période d'observation and subsequent hearings, quoted separately based on complexity
No hidden costs, no unpleasant surprises
Our commitment:
we are lawyers and accountants
not brokers of software or resellers of add-ons.
We deliver real expertise, not automated forms.
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Why Choose Us?
We Deliver Transparent, Lawyer-Led Accounting & Tax Support
Integrated expertise: Our lawyers and accountants work together to ensure your records and filings meet French GAAP and legal standards.
Accurate and compliant: We manage your accounts, VAT, and tax declarations with precision and reliability.
Tailored advice: Get clear guidance on tax optimization, remuneration, and business structure.
Bilingual support: Communicate easily in English or French, with responsive and professional service.
Let us handle your accounting and tax compliance — so you can focus on growing your business.
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Understanding Insolvency Proceedings in French Law
What is cessation des paiements and when does the 45-day filing obligation begin?
Cessation des paiements is the legal threshold that triggers the mandatory filing obligation in French insolvency law. It is defined under Article L. 631-1 of the Code de commerce as the state in which a company is unable to pay its due debts with its available assets (actif disponible).
Two elements must be present simultaneously:
- Exigible liabilities (passif exigible): debts that are due and payable — not merely future or contingent obligations.
- Available assets (actif disponible): liquid or near-liquid assets that can be mobilised immediately — cash, receivables, credit facilities. Fixed assets such as machinery or real estate that cannot be quickly realised are generally excluded.
From the date on which both conditions are met, directors have 45 calendar days to file the déclaration de cessation des paiements with the competent Tribunal de commerce. This deadline is strict. A director who files late — or who delays filing to conceal the company’s true financial position — risks being held personally liable for the company’s debts (insuffisance d’actif) and prosecuted for banqueroute.
One important nuance: a company that has reached cessation des paiements but has opened a conciliation procedure with the court enjoys a suspension of the 45-day deadline during the conciliation period. This makes early conciliation a powerful tool for buying time while negotiating with creditors.
What is conciliation and how does it differ from formal insolvency proceedings?
Conciliation is a confidential, pre-insolvency procedure governed by Articles L. 611-4 et seq. of the Code de commerce. It is available to companies that face legal, economic, or financial difficulties — including companies that have been in cessation des paiements for no more than 45 days.
A conciliateur (conciliator) is appointed by the President of the Tribunal de commerce following a confidential application by the company. The conciliator’s role is to facilitate negotiations between the company and its main creditors — banks, tax authorities (DGFIP), social security bodies (URSSAF), and key suppliers — with a view to reaching a negotiated agreement (accord de conciliation) within a maximum period of 5 months.
The key advantages of conciliation are:
- Strict confidentiality: unlike formal insolvency proceedings, conciliation is not published and does not appear in the company’s public record unless the agreement is judicially homologué (approved by the court).
- Suspension of the 45-day deadline: opening conciliation suspends the obligation to file for redressement judiciaire, giving the company additional time to negotiate.
- New money protection: creditors who provide new financing as part of a conciliation agreement benefit from a statutory priority (privilège de conciliation) in any subsequent insolvency proceedings.
For companies that can act early enough, conciliation is often the most commercially effective tool available — preserving confidentiality, management control, and stakeholder relationships while restructuring debt.
What happens to employees when a company files for insolvency in France?
Employees benefit from strong legal protection in French insolvency proceedings:
Wage guarantee via AGS: all wages, holiday pay, and severance amounts owed to employees at the date of the insolvency opening — and certain amounts falling due during the proceedings — are guaranteed by the AGS, which advances payment directly to employees and then becomes a privileged creditor of the insolvent estate.
Employment contracts during the observation period: existing employment contracts continue during the période d’observation. The administrateur judiciaire may terminate contracts if essential for the survival of the business, but only with the authorisation of the juge-commissaire and following the mandatory consultation of the CSE.
Redundancy in the context of a recovery or liquidation plan: if the recovery plan involves workforce reductions, or if the company proceeds to liquidation, the applicable redundancy procedures — including plan de sauvegarde de l’emploi (PSE) for companies above threshold — must be followed. The DIRECCTE (now DREETS) supervises the process.
Priority of employee claims: employee wage claims rank as super-privileged creditors (superprivilège des salariés) — they are paid before all other creditors, including secured lenders, from the company’s available assets.
Practical Roadmap: File for Insolvency in 5 Steps
- Assess the situation immediately: determine whether cessation des paiements has been reached and whether the 45-day deadline is running.
- Choose the correct procedure: conciliation, sauvegarde, redressement judiciaire, or liquidation judiciaire — based on the company’s actual financial position and recovery prospects.
- Prepare the complete dossier: financial statements, creditor list, employee data, asset schedule, and the director’s sworn declaration — all accurate, all complete.
- File at the Tribunal de commerce: submit the declaration, attend the opening hearing, and receive the court’s ruling on the applicable procedure and appointed officers.
- Manage the proceedings: coordinate with the administrateur and mandataire judiciaires, respond to creditor claims, and present the recovery plan — or manage the liquidation — to the best possible outcome.
What is the difference between sauvegarde, redressement judiciaire, and liquidation judiciaire?
These three procedures occupy distinct positions on the spectrum of French insolvency law, each calibrated to the severity of the company’s financial distress:
Sauvegarde is the preventive procedure. It is available to companies that are not yet in cessation des paiements but face difficulties serious enough that they cannot be resolved without court assistance. It is the most director-friendly procedure: management retains control of the company, the court appoints an administrateur judiciaire in an advisory rather than supervisory capacity, and the observation period allows the company to negotiate a restructuring plan with creditors from a position of relative strength. Creditor actions are automatically stayed from the date of opening.
Redressement judiciaire is the recovery procedure for companies that have reached cessation des paiements but whose recovery is not manifestly impossible. Management may be assisted or supervised by the administrateur judiciaire depending on the company’s size. The observation period of up to 18 months gives the company time to negotiate a recovery plan — involving debt rescheduling, partial debt cancellation, or a sale of the business to a third party.
Liquidation judiciaire is ordered when the company’s recovery is manifestly impossible — either at the time of the initial filing or following failure of the redressement proceedings. The company ceases all activity immediately, a liquidateur judiciaire is appointed to realise assets and distribute proceeds to creditors in order of statutory priority, and the company is ultimately struck off.
The distinction between redressement and liquidation is made by the court at the opening hearing — which is why the quality of the legal representation and the accuracy of the initial dossier are decisive.
What personal liability do directors face in French insolvency proceedings?
French insolvency law creates several mechanisms through which directors can be held personally liable for their company’s debts or subjected to professional sanctions. Understanding these risks — and the conditions that trigger them — is essential.
Action en comblement du passif (insuffisance d’actif): where a company is subject to liquidation judiciaire and its assets are insufficient to cover its liabilities, the court may order one or more directors to personally contribute to the shortfall — up to the full amount of the insuffisance d’actif — if it finds that their gross mismanagement (faute de gestion) contributed to the insufficiency. Late filing is one of the most commonly cited faults.
Banqueroute (criminal insolvency offence): directors who have fraudulently concealed assets, increased liabilities without cause, or failed to file within the 45-day deadline in bad faith may be prosecuted for banqueroute — a criminal offence carrying up to 5 years’ imprisonment and fines of up to €75,000.
Interdiction de gérer (management ban): the court may prohibit a director found guilty of serious mismanagement from directing, managing, or controlling any French company for a period of up to 15 years.
The most reliable protection against all of these risks is timely, correctly documented filing — which is precisely what our lawyers ensure from the moment of instruction.
What is a plan de cession and how does it work?
A plan de cession (going concern sale) is the procedure by which the Tribunal de commerce, during redressement judiciaire or liquidation judiciaire proceedings, sells the company’s business — or a defined part of it — to a third-party acquirer as a going concern, preserving the activity and as many jobs as possible.
The key features of a plan de cession are:
- Competitive bidding: interested acquirers submit formal offers (offres de reprise) to the court. Offers must specify the assets to be acquired, the price, the number of jobs to be maintained, and the continuation commitments.
- Court approval: the court selects the offer that best ensures continuity of employment, payment of creditors, and viability of the activity — not necessarily the highest price.
- Clean acquisition: the acquirer takes the business free of most pre-existing liabilities (except those expressly assumed in the offer), providing a genuinely clean start.
- Employee transfer: employment contracts for the jobs retained in the offer transfer automatically to the acquirer under Article L. 1224-1 of the Code du travail.
For potential acquirers of French businesses in difficulty, the plan de cession offers a unique opportunity to acquire assets and activities at favourable terms. Our lawyers advise on both sides of this process — representing companies in redressement proceedings and advising acquirers preparing competitive offers.
What is the typical timeline for French insolvency proceedings?
Procedure | Typical Duration |
Conciliation | Up to 5 months (confidential) |
Sauvegarde — observation period | 6 months, renewable up to 18 months |
Sauvegarde — recovery plan execution | Up to 10 years |
Redressement judiciaire — observation period | 6 months, renewable up to 18 months |
Liquidation judiciaire (simple) | 6 to 18 months |
Our lawyers provide a realistic timeline and procedural roadmap from the outset, so directors and shareholders understand exactly what to expect at each stage.
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More About Filing for Insolvency in France
Can a foreign-owned French company file for insolvency in France?
Yes. Any company registered in France — regardless of the nationality of its shareholders or directors — is subject to French insolvency law and must file at the Tribunal de commerce of its registered office. European cross-border insolvency is governed by EU Regulation 2015/848 on insolvency proceedings.
What documents will I need?
You will need: latest two approved accounts, current management accounts, list of creditors and amounts owed, employee headcount and wage arrears, bank statements, and a statement of the company’s assets and cash position.
Can I file for sauvegarde before my company is insolvent?
Yes — and this is strongly recommended. Sauvegarde is specifically designed for companies that are not yet in cessation des paiements but face serious difficulties. Acting early gives you the most procedural protection and the most restructuring options.
What happens to my contracts when I file for insolvency?
An automatic stay (suspension des poursuites) applies from the date of the court’s opening judgment. Creditors cannot initiate or continue enforcement actions. Ongoing contracts generally continue, but the administrateur judiciaire may elect to terminate those that are not essential to the company’s survival.
Can I file remotely?
The initial declaration can be filed electronically via the guichet unique platform. However, the opening hearing before the Tribunal de commerce is a physical court appearance — our lawyers represent the company at this hearing on your behalf.
What are the costs of insolvency proceedings?
Our flat legal fee covers the initial assessment and declaration filing. Court-appointed officers (administrateur judiciaire, mandataire judiciaire) are remunerated according to a regulated tariff based on the size and complexity of the proceedings — separate from our fees and payable from the insolvency estate.
What if my company has no assets — can it still file?
Yes. A company with no or minimal assets may be eligible for a liquidation judiciaire simplifiée (simplified judicial liquidation), which is a faster, lower-cost procedure designed for small companies with few creditors and no real property. Our lawyers advise on eligibility at the initial assessment stage.
Does filing for insolvency automatically mean the company will be liquidated?
No. The majority of redressement judiciaire and sauvegarde proceedings result in an approved recovery plan, not liquidation. Liquidation is ordered only when the court finds that recovery is manifestly impossible — which is precisely why early filing, with accurate information and strong legal representation, produces better outcomes.
