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Competence
Where is the headquarters of a de facto business located?
Publié le 04 novembre 2025 - Public Service / Directorate of Legal and Administrative Information (Prime Minister)
In a judgment delivered on September 17, 2025, the Court of Cassation ruled on the territorial jurisdiction of a court in the matter of the dissolution of a de facto business. Decryption.
Reminder
A de facto business is an unregistered business whose existence results from the unintentional behavior of several partners. They must have participated in the economic realization of a business (sharing of profits and losses). In accordance with Article 1873 of the Civil Code, de facto businesses are subject to the participatory business regime (business in which the members have expressed their desire to set up a group).
This dispute concerns a de facto business with no registered office. The search for the real seat in this case makes it possible to determine the jurisdiction of the judge.
In this case, two partners were joined by two persons and one business domiciled in different countries (including Estonia). The Chief Operating Officer, who believes he has been wrongfully dismissed, initiates dissolution proceedings before the Nanterre Commercial Court. The partners challenge the jurisdiction of the French judge. According to them, the decision had to be taken by the Estonian judge.
The Court of Appeal indicated that the French judge had jurisdiction. It is based on the regulations Brussels Ia to determine which judge must decide a dispute involving partners from different countries. Article 8(1) of that regulation states that an applicant may bring proceedings before the court of the domicile of one of the defendants if the claims are connected and there are common interests. It therefore retains the jurisdiction of the French judge.
The Court of Cassation upheld the decision of the Court of Appeal but based on Article 24(2) of the Regulation. It states that the private international law applicable is that of the country in which the seat of the business is located.
In the absence of a registered office, the Court takes the location of the real seat on the ground that it is the ‘place of effective management of the business’.
Since the plaintiff was domiciled in France, the judge stated that the real seat of the de facto business was in France. The Commercial Court of Nanterre therefore has jurisdiction.