Is your company facing certain difficulties or is it at a standstill? Whatever situation you are facing, there is no need to worry. You always have the opportunity to address it.
If you are just realizing the problem, the best thing to do is to take immediate action to avoid bankruptcy at all costs. In times of difficulty, it is never too late to react. To do this, several options are available to you if you feel that your company is in serious trouble.
How to prevent difficulties?
Firstly, if you notice a slight change in your company’s financial situation, you can immediately consult a bank advisor. By conducting their work transparently, they are able to give you their opinion on the financial state of your company. However, it is important to prevent them from interfering in your management.
Furthermore, you will likely need the help of an accountant or a Certified Management Center (CGA). This is an organization whose objective is to provide industrial, commercial, artisanal, and agricultural companies with technical assistance in terms of management/prevention of economic and financial difficulties for their members, as well as assistance and tax prevention and training. For liberal professions, this role belongs to approved associations (AGA).
These experts can help you identify potential financial difficulties. Therefore, you will analyze your company’s accounts in advance, which will help you avoid poor results.
You can also call upon Approved Prevention Groups (GPA) who will provide assistance by meticulously analyzing your financial and accounting situation. Through their role, this group will refer you to a specialist in companies in difficulty who will propose appropriate solutions.
Procedures in case of difficulties
Initially, when your company is in difficulty, you can initiate the Ad Hoc procedure where you will obtain legal, financial, or economic solutions. However, the Ad Hoc mandate can only be requested if your company is not yet in a state of insolvency.
You also have at your disposal the conciliation procedure whose aim is to seek an amicable agreement with your main creditors. However, this solution is only applicable to companies with manageable financial problems. Moreover, in this case, you must have been in a state of insolvency for 45 days and no more.
The safeguard procedure
As a third option, you can initiate a safeguard procedure which consists of establishing a rescue plan for your company. Indeed, this concerns the settlement of all your liabilities. You can make the request if, without being insolvent, you “justify difficulties that you are unable to overcome” (according to Article L 620-1 of the Commercial Code). To do this, a judge-commissioner, a judicial administrator, followed by a judicial representative, will be sent to you by the court.
It is important to know that there is an official organization that can assist you free of charge such as the CODEFI or Departmental Committee for the Examination of Business Financing Problems. Its mission is to guide companies experiencing financing problems. It helps companies in difficulty to develop and implement solutions to ensure their sustainability and development. Thus, the CODEFI can grant, subject to conditions, an audit allowing, among other things, to validate the hypotheses of the company’s recovery or a loan to finance its restructuring. All companies with fewer than 400 employees, regardless of their economic sectors, can benefit from this system.
The troubled company must contact the CODEFI in the jurisdiction where its registered office is located. To do this, it must contact either the permanent secretary of the CODEFI at the Departmental Directorate of Public Finance, or the Commissioner for Restructuring and Prevention of Business Difficulties (CRP) of its region.
It will try to examine your case and discreetly advise you on the measures to take. However, this committee can only assist you if you have fewer than 400 employees in your company.
