Alert and detection of business difficulties

Verified 18 September 2025 - Directorate of Legal and Administrative Information (Prime Minister)

The alert procedure makes it possible to detect the economic difficulties of a business as soon as possible. The Social and Economic Committee (ESC) or the members have the possibility to initiate this procedure. For his part, the auditor is obliged to trigger the alert when he detects certain facts that may compromise the continuity of the operation.

The president of the commercial court also has the possibility of summoning the manager for an interview in case of difficulties. For more information, refer to the fact sheet: “appointment “prevention” with the president of the court”.

The appointment of an external auditor (CAC) is mandatory when certain balance sheet, turnover and number of employees thresholds are crossed. To know these thresholds, you can consult the sheet on the appointment of an external auditor.

The CAC must trigger the alert procedure when it identifies facts that may compromise the continuity of the operation of the business.

For example, the following may trigger the ACC alert:

  • Important contracts that expire (concession, manufacturing license, lease)
  • Loss of half of equity
  • Tax and social security debts
  • Social conflicts

The alert procedure is organized differently depending on whether the business is a public limited company (SA) or a (SAS) or some other form of business (LLC, CNSetc.).

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SA and SAS

An SA may be headed either by a board of directors and a chairman and chief executive officer, or by a supervisory board and a management board.

The SA alert procedure is also applicable to the SAS when organized as an SA (i.e. with a board of directors or supervisory board).

SA to Board of Directors

The alert procedure consists of the following 4 phases:

  1. Alert from the Chairman of the Board of Directors
    The CAC must alert the Chairman of the Board of Directors of facts that may compromise the continuity of the company's business (important contracts that expire, loss of half of the share capital, decrease in the order book, labor disputes, etc.). This alert is made by registered mail with AR.
    The Chairman of the Board of Directors must reply by registered letter AR within 15 days of receipt of the letter from the External Auditor. If this response is sufficient to ensure continuity of operation, the alert procedure shall stop at this stage.
  2. Meeting of the Board of Directors
    In the absence of a response or if it is deemed unsatisfactory, the External Auditor shall request in writing the Chairman of the Board of Directors to convene a meeting of the Board of Directors to deliberate on the facts identified.
    The Chairman of the Board of Directors must then convene the Board of Directors within 8 days of receipt of the letter from the External Auditor. Deliberation must take place within 15 days of receipt of this letter. The External Auditor is called to this meeting.
    The procedure is confidential. However, when the situation is very serious, the auditor can inform the president of the commercial court.
  3. Convening of a general meeting
    A general meeting shall be convened in the following cases: the Board of Directors has not been convened, the External Auditor has not been convened to the Board of Directors, or the External Auditor finds that the continuity of operations remains compromised.
  4. Information to the President of the Court
    When ACC finds that the decisions taken at the General Assembly do not improve the situation, it must inform the President of the Commercial Court.
SA with Management Board and Supervisory Board

The alert procedure consists of the following 4 phases:

  1. Management Board Alert
    The CAC must alert the Management Board of events that may compromise the continuity of the company's activity (important contracts that expire, loss of half of the share capital, decrease in the order book, social conflicts, etc.). The CCA sends registered mail with AR.
    The Management Board must reply by registered letter AR within 15 days of receiving the letter from the External Auditor. If this response is sufficient to ensure continuity of operation, the alert procedure shall stop at this stage.
  2. Supervisory Board Meeting
    In the absence of a response or if it is deemed unsatisfactory, the External Auditor requests, in writing, the Management Board to convene a meeting of the Supervisory Board to deliberate on the facts identified.
    The Management Board must then convene the Supervisory Board within 8 days of receiving the letter from the External Auditor. Deliberation must take place within 15 days of receipt of this letter. The External Auditor is called to this meeting.
    The procedure is confidential. However, when the situation is very serious, the auditor can inform the president of the commercial court.
  3. Convening of a general meeting
    A general meeting shall be convened in the following cases: the Supervisory Board has not been convened, the External Auditor has not been convened to the Supervisory Board or the External Auditor finds that the continuity of operations remains compromised.
  4. Information to the President of the Court
    When ACC finds that the decisions taken at the General Assembly do not improve the situation, it must inform the President of the Commercial Court.

Other businesses

The External Auditor shall implement the two-stage alert procedure:

  1. Request for explanations from the executive officer by registered letter with AR on the facts that compromise the continuity of the operation (for example, important contracts that expire, loss of half of the share capital, excessive financial costs, etc.).
    The executive officer must respond to the ACC within 15 days with an analysis of the situation and a description of the proposed action.
  2. Meeting of the General Assembly
    In the absence of a reply from the executive officer or if he finds that the continuity of the operation remains compromised, the External Auditor shall draw up a special report.
    It asks the leader to convene a general meeting to deliberate on the facts noted. If he doesn't, it's the auditor who does it.
    If, at the end of the general meeting, the auditor finds that the decisions taken do not ensure the continuity of the operation, he shall inform the president of the commercial court.

Please note

This procedure also applies to SAS: titleContent which do not have a body equivalent to a board of directors or a supervisory board.

In the companies at least 50 employees, the CSE may implement an alert procedure for events that may affect the economic situation of the company (e.g. loss of a significant customer, significant and sustained drop in orders, restructuring project). We're talking about right of economic alert.

The CSE may then ask the employer to provide explanations.

If the answers are deemed insufficient or if they confirm the worrying nature of the situation, the ESC draws up a report which is forwarded to the employer and the External Auditor (CAC).

Following this report, the EESC issues an opinion on whether:

  • Either to refer the matter to the Board of Directors or the supervisory board for businesses with
  • Or to inform the partners for the other businesses

If it considers it necessary, the EESC may request that the matter be placed on the agenda of the next meeting of the Management Board or the Supervisory Board. The employer's response must be reasoned.

For businesses that do not have a board of directors or supervisory board, the manager shall communicate the CSE report to the members.

Any partner or shareholder has the possibility to trigger the alert. The procedure is different for members of a limited liability company (LLC) or the shareholders of a public limited company (SA), one business per simplified action (SAS) or a limited partnership (SCA).

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Partners of a SARL

Any partner of a limited liability company may ask the manager questions in writing about any event that could compromise the continuity of the operation (for example, sudden loss of a large customer, restructuring, etc.). He has that opportunity twice a year accounting year.

Within one month, the manager must respond in writing to the questions put to him.

The response shall be communicated to the External Auditor (ACC) if one exists. The latter may then initiate an alert procedure if it considers it necessary.

Shareholders of an SA, SAS or SCA

The shareholder is the owner of one or more shares in a public limited company (SA), in a simplified share business (SAS) or in a limited partnership (SCA).

One or more shareholders representing at least 5% of share capital may put questions in writing to the Chairman of the Board of Directors or to the Management Board on any matter that may jeopardize the continuity of operations.

This possibility is open twice by accounting year.

The Chairman of the Board of Directors or the Management Board shall reply in writing within one month to questions from shareholders.

It shall, within the same period, send a copy of the question and its reply to the External Auditor, if the business has one. The latter may then initiate an alert procedure if it considers it necessary.

A company registered in the National Register of companies (RNE) has the possibility to join an approved prevention group (GPA).

The GPA is an association whose mission is to provide its members, on a confidential basis, with periodic analysis of economic, accounting and financial information.

The GPA has a mission to alert the company leader. When he identifies signs of difficulties (for example, difficulty in settling tax and social deadlines), he must inform the manager. It can also refer the person to a network of experts.

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