A commercial agent is an independent trader who represents the principal in order to promote the latter’s products or services. A commercial agent can be registered as such on a special register and will receive statutory protection under the commercial code. However, other traders can seek the classification of a commercial agent from the court if they can prove that the conditions for an agency agreement are met.

Both a franchisee and a distributor are independent traders. Both must be granted exclusivity and may be given a licence to trade under the trademark owned by the franchisor or of the principal. The difference under a franchise agreement is that the franchisee should receive assistance and advice. Franchise agreements can be subject to certain strict contractual rules notably in terms of pre-contractual information.

In French law, a non-competition clause must be limited in terms of its purpose, in time and in geographical area. In addition, in the field of employment law, the clause must not prevent the employee from engaging in gainful employment and the clause must provide for financial consideration to be paid to the employee.

It is important to verify if the invention is truly original and that it does not step on the shoes of existing patents. It is recommended that assistance should be sought from a patent agent.

It is first necessary to verify that a similar trademark is not already protected in the class of products in which the trademark is to be used. In France there is a national register of French trademarks, upon which the chosen trademark should be filed.

An idea on its own cannot be the subject of protection under trade-mark or patent law. However, actions can be taken in French law to prevent competitors from usurping or slavishly following an idea.

In French law, there is a specific concept of a fonds de commerce. Frequently, when English-speaking lawyers refer to an asset deal, in French law, this will mean the sale of a fonds de commerce. The key defining component of a going concern or fonds de commerce is the customer-base or clientele.

Although there is a view that the interests of the company are simply those of its shareholders, there is a general recognition that the French company has its own distinct corporate interest. Thus when a company engages in a particular transaction it is important to verify that those commitments and duties are in the corporate interest of the company itself. The French courts are attentive to the corporate interest in particular when security is given by a company over its assets ostensibly for the benefit of a third party or notably a group to which the company belongs.

In principle the shareholders are only liable to the extent of their contribution to the share capital given the limited liability of most commercial companies. However a shareholder in a limited liability company could nevertheless become liable if the shareholder has de facto become involved in the management company and that has led to the insolvency

The fact that a company becomes insolvent does not mean that a director would automatically become liable. Such liability would only arise if the director has taken unusual steps or actions or entered unusual transactions which have worsened the financial position of the company. There would normally have to be some form of management negligence.