Recovering a debt from a company removed from the register: what remedies?

A supplier delivers goods, issues its invoice, then discovers a few months later that its customer has disappeared from the Trade and Companies Register (registre du commerce et des sociétés, RCS). The debtor no longer exists legally, no bank account can be attached, and the enforceable title seems worthless. This situation, common for SMEs and tradespeople faced with unpaid invoices, is not, however, a dead end. The removal of a company from the register (radiation) erases neither the debt nor the liability of the persons who managed or liquidated it. This guide explains how to recover a debt from a company removed from the register: restoring its legal personality in order to continue the liquidation, and bringing proceedings against the former manager or the liquidator where their faults have deprived the creditor of payment.

Understanding what removal from the RCS means

Before taking action, it is necessary to know precisely what has happened. The term "removal" (radiation) refers only to the deletion of the registration in the Trade and Companies Register. It is not the same as dissolution or liquidation, even though these three operations usually follow one another in the process by which a company disappears.

Dissolution, liquidation, removal: three distinct stages

Dissolution marks the end of the business and the company's entry into its final phase. It may be decided by the shareholders (early dissolution), result from the expiry of the term set in the articles of association, or be ordered by a court. Liquidation then consists in realising the assets (selling the property, collecting receivables) and discharging the liabilities (paying the debts) before dividing any surplus among the shareholders. Removal from the register normally takes place at the close of the liquidation: it records administratively that the company no longer has any reason to appear on the register. The stages and length of the period separating these two operations are set out in our article on the time between dissolution and liquidation.

This sequence has a direct consequence for the creditor. A company may be removed from the register even though not all its debts have been paid, either through the liquidator's negligence or through a wish to get rid of a cumbersome structure. Removal from the register is not a discharge: it does not extinguish unpaid debts.

Voluntary removal and removal by the registrar

Voluntary removal results from a declaration filed with the court registry after the close of the liquidation. Removal by the registrar (radiation d'office), on the other hand, is decided by the court registrar in the cases provided for by the French Commercial Code, in particular where a company no longer files its accounts, ceases all activity, or where its registration appears manifestly obsolete. A company removed by the registrar for cessation of activity may retain residual assets and may never have been properly liquidated. This distinction is decisive: a debtor removed from the RCS prematurely or irregularly offers more scope for action than a company that has been properly liquidated and has no assets.

Removal from the register does not extinguish the debt

The received idea that "the company no longer exists, so the debt is lost" is legally wrong. Two mechanisms protect the creditor.

Survival of legal personality for the purposes of the liquidation

French law holds that a company's legal personality survives, for as long as its corporate rights and obligations have not been liquidated, for the purposes of its liquidation. Article 1844-8 of the French Civil Code thus provides that:

The legal personality of the company survives for the purposes of the liquidation until publication of the close of the liquidation.

The case law draws a protective consequence from this: where a debt has been omitted and an asset remains to be realised, the company is deemed to retain a residual legal personality which allows the liquidation operations to be resumed. In plain terms, as long as there remains an unpaid liability or an undistributed asset, the company is not entirely "dead" in the eyes of the law.

Removal from the register cannot be relied on against the unpaid creditor

Removal from the register takes effect with regard to third parties, but it cannot be used to defeat the rights of a legitimate creditor. A liquidator who closes a liquidation while knowingly leaving a debt unpaid does not extinguish that debt; on the contrary, he exposes himself to personal liability. The creditor therefore retains the possibility of taking action, provided the right procedural route is chosen.

First step: diagnosing the disappearance before acting

Any recovery strategy begins with investigative work. The creditor must reconstruct the history of the company before choosing its action.

Several public sources allow this diagnosis. The Kbis extract, even when marked "removed", states the date and cause of the removal. The notices published in the BODACC (French official gazette of civil and commercial announcements) trace the dissolution, the appointment of the liquidator and the close of the liquidation. The Infogreffe website and the National Business Register (Registre national des entreprises) give access to the filed accounts and corporate documents. These elements make it possible to answer three decisive questions:

• Did the removal follow a voluntary liquidation, a judicial liquidation, or removal by the registrar?
• Who was the liquidator or the manager, and is his address known?
• Did the company still have assets at the time of closure, such as property, a receivable to be collected, a bank account or a business (fonds de commerce)?

This diagnosis guides the choice between two main types of remedy: restoring the company in order to seize a forgotten asset, or seeking the personal liability of a director or of the liquidator.

Imagine a building contractor who has carried out works for a property development SARL, which still owes several invoices. On consulting the BODACC, he discovers that the company was dissolved and then removed from the register six months after his works, without ever paying him, even though it still held an unsold property unit. This unit is a forgotten asset: it justifies reopening the liquidation.

Reopening the liquidation: restoring legal personality

Where the company removed from the register retains an unrealised asset or a debt has been omitted, the creditor may apply for the liquidation to be reopened. This is the most effective mechanism to recover a debt from a company removed from the register that has residual assets.

Appointment of an ad hoc representative

The company removed from the register no longer has a legal representative: neither a manager in office nor a liquidator. To bring it back into legal existence, the creditor applies to the President of the Commercial Court (or of the judicial court (tribunal judiciaire) for non-trading companies) for the appointment of an ad hoc representative (mandataire ad hoc). The task of this representative is to represent the company, resume the liquidation operations, realise the forgotten asset and pay the creditors.

The application is usually made by ex parte application (requête) or by summons (assignation), with evidence of two elements: the existence of a certain debt and the existence of an asset to be realised or of a liquidation operation left unfinished. Once the representative has been appointed, the company's legal personality "revives" for the purposes of this supplementary liquidation, and the creditor can assert its claim within that framework.

When reopening the liquidation is worthwhile

This remedy only makes sense if there is an asset to be seized. Reviving a company without any property would only generate procedural costs with no prospect of payment. Reopening the liquidation is, however, particularly useful where:

• a property, a business (fonds de commerce) or a vehicle was still among the company's assets at closure;
• a receivable owed to the company by a third party (uncollected invoice, security deposit, current account balance) was never collected;
• a liquidation surplus was divided among the shareholders while debts remained due, which may justify claiming from the shareholders the repayment of sums unduly received.

In the example of the building contractor, the ad hoc representative will be able to sell the forgotten property unit and apply the price to payment of the unpaid invoices, before any distribution among the shareholders.

Taking action against the former liquidator

Where the disappearance of the assets results not from an oversight but from a fault in the conduct of the liquidation, the personal liability of the liquidator may be sought. The action against the manager acting as liquidator rests on a simple principle: a liquidator who closes the operations leaving unpaid a debt of which he was aware, or who distributes the assets to the shareholders in disregard of the creditors, commits a fault that renders him liable.

The basis of the liquidator's liability

The liquidator, whether a former manager who has become the voluntary liquidator or an appointed professional, is bound by a duty of diligence. He must draw up an inventory of the liabilities, call in the known creditors and pay the debts before dividing the balance. The French Commercial Code provides that the liquidator is liable, both to the company and to third parties, for the harmful consequences of the faults he commits in the performance of his duties.

In practical terms, the following render the liquidator liable:

• the deliberate omission of a known creditor whose invoice appeared in the accounts;
• the distribution of a liquidation surplus to the shareholders while debts remained payable;
• a hasty close of the liquidation intended to allow the company to escape its obligations.

The creditor must prove a fault on the part of the liquidator, a loss (the unpaid debt), and a causal link between the two. Where it establishes that its debt would have been paid had the liquidator properly performed his task, it may obtain a judgment against him personally to make good the loss, often in the amount of the unpaid sum.

The particular case of the manager who becomes liquidator

In many small businesses, the manager appoints himself as voluntary liquidator. This dual role makes the creditor's action easier: the person who knew of the debt as manager cannot claim to have been unaware of it as liquidator. A manager-liquidator who has his SARL removed from the register without paying a supplier whose purchase order he had signed will find it difficult to rely on good faith.

Taking action against the former manager

Independently of the liquidation, the liability of the former director may be sought on several grounds, depending on whether the company went through a voluntary liquidation or insolvency proceedings (procédure collective).

Mismanagement separable from the director's functions

The principle is that a director does not incur personal liability to third parties for mere company debts. However, the case law accepts that he is liable where he has committed a fault separable from his functions, that is, a fault of particular seriousness, intentional and incompatible with the normal exercise of his powers. This is the case of a manager who knowingly enters into a commitment he knows the company is unable to honour, or who organises the insolvency of the business before having it removed from the register. What constitutes mismanagement and the conditions for bringing proceedings against the manager of an SARL or the president of an SAS are analysed in our dedicated article.

The action against the manager acting as liquidator or the former director is then based on general civil liability. The creditor must establish the personal fault, its seriousness and the loss suffered. This ground is demanding in terms of evidence, but it becomes decisive where the disappearance of the company stems from an avoidance strategy.

Insufficiency of assets in the event of judicial liquidation

Where the company was placed in judicial liquidation before being removed from the register, a specific mechanism exists: the action for liability for insufficiency of assets (insuffisance d'actif), provided for in Article L. 651-2 of the French Commercial Code. Where the judicial liquidation reveals an insufficiency of assets resulting from mismanagement, it allows the director to be ordered to bear all or part of the liabilities.

This action does not, however, belong to the individual creditor: it is brought by the court-appointed liquidator or, in certain cases, by the public prosecutor. The creditor therefore has an interest in reporting to the court-appointed liquidator, while the proceedings are open, any mismanagement of which it is aware. It should be noted that mere negligence is not enough: the provision excludes mismanagement consisting of mere negligence in the management of the company. How this action works and what the director risks are detailed in our article on liability for insufficiency of assets.

Commingling of assets and fraud

Some situations reveal that the company removed from the register was merely a front. Where a director has commingled his personal assets with those of the company (mixed accounts, company assets used privately, no separate accounting), or where the removal forms part of a fraudulent arrangement designed to escape creditors, the veil of legal personality may be lifted. Fraud vitiates everything: a creditor who is the victim of an arrangement organised to make the company insolvent may take action directly against the person who profited from it.

The actio pauliana (action paulienne), which allows acts carried out by the debtor in fraud of its creditor's rights to be challenged, may thus target a transfer of assets made to another company or to a relative of the director just before the removal.

Practical steps for the creditor

Beyond the choice of action, successful recovery depends on the rigour with which the creditor builds its file and complies with the time limits.

Securing the evidence and the title

The creditor must gather all the documents establishing the debt: purchase order, invoices, delivery notes, correspondence, formal notices. If an enforceable title was already obtained against the company before its removal (judgment, order for payment (injonction de payer)), it retains its value and facilitates subsequent actions. Failing that, the debt will have to be established by the court in the context of the reopened liquidation or of the liability action.

Monitoring limitation

Time works against the creditor. An action for payment of a debt between businesses is in principle time-barred after five years. A liability action against the liquidator or the director is also subject to time limits that must be anticipated, the starting point often being the revelation of the damage, that is, the date on which the creditor knew that it would not be paid. It is prudent to act without delay: the more time passes, the harder it becomes to prove the faults and to locate an asset.

Assessing the solvency of the target

Reopening a liquidation or pursuing a former director is only worthwhile if payment is realistic. Before incurring costs, the existence of residual assets of the company or the personal solvency of the manager or liquidator should be assessed. An action won against an insolvent person produces only an ineffective judgment. This analysis of economic feasibility is an integral part of the recovery strategy.

Conclusion

The removal of a company from the register is not the end of the creditor's rights, but the start of a two-step analysis. The first step is to determine whether the company left any assets: if so, restoring its legal personality through the appointment of an ad hoc representative makes it possible to reopen the liquidation and seize the forgotten asset. The second step, where the assets have disappeared through the fault of those in charge, is to bring proceedings against the former manager or the liquidator personally, on the grounds of mismanagement, insufficiency of assets or fraud. These two routes are not mutually exclusive and are often combined in the same case.

The most profitable reflex remains speed of reaction. As soon as the removal is discovered, consult the BODACC and the National Business Register to identify the cause of the disappearance, the name of the liquidator and the existence of residual assets, then have your file analysed before the limitation periods expire. An early diagnosis distinguishes debts that are definitively lost from those that remain fully recoverable.

Frequently asked questions

Can a company removed from the RCS still be sued?

Yes, insofar as its legal personality survives for the purposes of the liquidation as long as its rights and obligations have not been settled (Article 1844-8 of the French Civil Code). The creditor cannot, however, directly summon a company that has no representative: it must first ask the court to appoint an ad hoc representative to represent it and reopen the liquidation. That representative then becomes the creditor's point of contact.

How can a debt be recovered from a company removed from the register that still owned an asset?

The creditor must seek the reopening of the liquidation by applying to the President of the competent court for the appointment of an ad hoc representative. The representative realises the forgotten asset (property, business, uncollected receivable) and applies the proceeds to payment of the creditors. This route requires proof of a certain debt and of an asset not distributed at the close of the liquidation.

Can proceedings be brought personally against the former manager of a debtor removed from the RCS?

Yes, but subject to conditions. The former manager is not, in principle, liable for the company's debts. His personal liability requires a fault separable from his functions, that is, an intentional fault of particular seriousness, for example organising the company's insolvency before its removal from the register. In the event of judicial liquidation, an action for insufficiency of assets under Article L. 651-2 of the French Commercial Code may also be brought, but by the court-appointed liquidator, not by an individual creditor.

What is the liability of a liquidator who failed to pay a debt?

The liquidator is liable for faults committed in the performance of his duties both to the company and to third parties. If he closed the liquidation leaving unpaid a debt of which he was aware, or distributed a surplus to the shareholders to the detriment of a creditor, he incurs personal liability. The creditor must prove the fault, the loss equal to the unpaid amount, and the causal link between the two.

What is the time limit for taking action against a company removed from the register or its director?

An action for payment of a debt between businesses is in principle time-barred after five years. Liability actions against the director or the liquidator are subject to their own time limits, the starting point often being the date on which the creditor became aware of the damage, that is, of the fact that it would not be paid. It is strongly advisable to act quickly, as the evidence of faults and the traceability of assets deteriorate over time.

Does removal by the registrar change the available remedies?

Yes, it often widens them. A company removed by the registrar for cessation of activity has frequently not been properly liquidated and may retain residual assets. This situation facilitates reopening the liquidation, since an asset remains to be realised and the closing operations were never properly carried out. A preliminary diagnosis through the BODACC and the National Business Register makes it possible to identify this situation.

What can be done if the shareholders received a liquidation surplus despite unpaid debts?

Dividing a surplus among the shareholders while creditors have not been paid is irregular. The ad hoc representative appointed for the reopened liquidation may claim from the shareholders repayment of the sums unduly received, in order to apply them to payment of the omitted debts. The creditor therefore has an interest in checking, in the closing accounts, whether a surplus was distributed before the removal.