In practice, it is not uncommon for managers and partners to enter into contracts even before the company has been registered, or even before the articles of association have been signed. However, as a company in formation has no legal personality, contracts entered into directly by it and not on its behalf are null and void. Here's how it works.
Company in the process of formation: definition
A company's formation period is the time between the partners' decision to form the company and its registration with the Trade and Companies Register (RCS).
More precisely, for the tax authorities, the starting point of this period is the date on which the funds are deposited in a blocked account (SARL, SA, SAS, EURL) or the date on which the articles of association are signed (partnerships).
According to commercial case law, any fact demonstrating the intention of the future partners to create the business marks the starting point for the formation of the company.
What documents can be signed by a company in formation?
Companies in the process of being formed are required to carry out the formalities involved in setting up a business, such as signing a commercial lease or purchasing equipment, as well as operating procedures.
When the partners begin to develop a real business before the company's creation date, it becomes a de facto company, with all the tax consequences that entails. It is up to the directors to regularize the situation by depositing the cash contributions in a blocked account, signing the articles of association and speeding up the administrative formalities.
Assumption of acts performed on behalf of a company in formation
There are three ways of taking over deeds performed on behalf of a company in formation, depending on when the deed was performed.
Deeds concluded before the articles of association were signed
A statement of the acts performed on behalf of the company in formation may be attached to the bylaws, along with the resulting obligations for each act.
Signing the articles of association means that the new company takes over these acts.
Deeds concluded between the signing of the articles of association and registration
Between the signing of the Articles of Association and the company's registration, the partners may give a mandate to one or more of their number to enter into commitments.
The mandate must be sufficiently precise, describing the act in question, its purpose and its main terms and conditions, otherwise the act will not be taken over by the company when it is registered.
Taking over deeds by express decision of the company
If neither of these two procedures has been implemented, the partners may decide to take over the acts carried out on behalf of the company after its registration. The decision must be taken by the majority set down in the Articles of Association, or failing that, by a simple majority at a General Meeting.
Thus, taking over deeds is only a possibility open to directors and partners. Failure to do so means that only the signatory partners are liable for payment and performance.