Before you sign a contract with a French company, it is worth making sure that the person signing the contract on the other side is someone who can actually bind the company. With a Polish counterparty, a quick look at the KRS is usually enough. With a French counterparty, the matter tends to be less obvious. The scope of information shown in the Kbis, the French equivalent of our KRS, is narrower than in the Polish register.
Who represents a French company?
As in Poland, where on a management board we may come across a president, a vice-president or simply a member of the management board, in France too the persons managing a company may hold various titles. In French companies, the positions we will most often encounter are: “président”, “gérant” or “directeur général”.
However, the title of the position alone does not determine whether a given person may independently sign a contract on behalf of the French company they represent.
The primary source of information about a French company is the Kbis extract, the French equivalent of an extract from the KRS. In it we will find, among other things, the company’s name, its registered office, its registration number and the persons holding positions in its corporate bodies. It is worth obtaining the Kbis from the counterparty before signing the contract, preferably in its current version.
What should you do when another company sits on the management board of a French company?
This is a situation that often surprises Polish entrepreneurs. In Poland, only a natural person may be a member of the management board of a limited liability company, whereas in France a management function – for example “président” – may be held by another company. In the Kbis extract, instead of a first name and surname, we will then see the name of the managing company.
In such a case, checking a single document is not enough. We must also consult the Kbis of the managing company and establish who, in turn, represents it. Only that natural person will actually sign the contract – on behalf of the managing company, which acts as a corporate body of the French entity. In extensive corporate groups such a chain may be longer, but it must always be followed through to the end.
Will the Kbis tell us the manner of representation of the French company?
Not always. This is the most important difference compared with the Polish KRS. In the Polish KRS we will find the manner of representation stated directly – for example, information that the company is represented by two members of the management board jointly or by each of them independently.
The Kbis does not contain such information: it indicates who holds which position, but does not say whether these persons act independently or jointly.
When there is one person on the management board of a French company, the matter is simple, because that person represents the company independently. The problem arises when the Kbis shows several managers, often under different position titles. From the extract alone, we will not then learn whether each of them may sign the contract separately, or whether the signatures of several persons are required, or perhaps even of all those listed in the register.
Which documents confirm the manner of representation of a French company?
If the Kbis does not give a clear answer, other documents need to be consulted. The most important of these is the articles of association (statuts), which usually set out the powers of the individual managers. Resolutions appointing the members of the management board may also be helpful, and if the contract is to be signed by a person from outside the management board – for example a sales director – a power of attorney granted by a person authorised to represent the company.
In practice, the simplest approach is to ask the French counterparty to send these documents together with a current Kbis while still at the negotiation stage. For good order, it is also worth stating in the contract itself the first name, surname and position of the signatory, as well as the basis of their authority. Such verification takes little time, yet it makes it possible to avoid a situation in which, in the event of a dispute, the counterparty challenges the validity of the contract, claiming that it was signed by the wrong person.
