Payment terms and solutions provided by the legislator

, , , , , ,
terms of payment

LegalCity cabinet de recouvrement amiable et judiciaire 100% en ligne, accompanies them Small and medium-sized businesses and the self-employed in the collection of their overdue debts, both amicably and judicially, by means of a totally dematerialized payment order procedure.

Regularly confronted with questions from companies suffering from unpaid bills LegalCity proposes to take stock of the LME Law and more particularly the problematic linked to terms of payment.

Financial Sanctions, Name and Shame and ptheof payment deadlines are the topics that will be discussed in ourin our article.

Where we are are we since the publication of the LME Law, the Macron Law and the SAPIN 2 Law?

To remember:

Delays in payment periods in France have a strong impact on the profitability and competitiveness of our SMEs.

It should be noted that the figure of an average delay of 12 days on the payment terms of all French companies has as a consequence that one out of three companies created will file for bankruptcy in 3 years (The failure rate only due to unpaid invoices will rise to 50% of bankruptcy within 5 years!)

60 days of payment terms capped by the LME law!

From the date of the invoice, the debtor must pay the invoice within a maximum period of 60 calendar days or within 45 days end of month!

This unique deadline of 60 calendar days has been introduced by the Macron Law called "Loi Croissance du 6 Aout 2015". Thus, an invoice issued on June 2 must be paid on August 2. After this date, it will be considered as overdue!

As an exception, another period of 45 days FDM (end of month)from a contractual agreement between the Companies can be set up leaving 2 possible types of calculation:

  • you can add 45 days to the date date of issue invoice date and pay at the end of the following month. next month.

Example: the same invoice dated June 2 will call for payment by July 31.

  • You can also radd 45 days to the end of the month of the date of issue of the the invoice.

Example : the invoice dated June 2 June has a month end on 30 Juneto which we must addsr 45 days, so the due date will be 15 August. This method of calculation can considerably extend the payment terms when the issue date is at the beginning of the month.

It is always possible for you to to negotiate the terms of payment of your sales and services within the framework of a special agreement!

Other exemptions allowing for longer payment terms are provided for in industries with significant seasonal sales. We can mention for example the toy, watch and jewellery jewelry, watchmaking, leather goods and leather leather working, activities related to the production of winter sports winter sports equipment and finally in the agro equipment.

Penalties are becoming increasingly severe for not-respect of paymentof payment

As mentioned before, the late payments and unpaid invoices are still far too high.

The DGCCRF has been given new powers of sanction in order to fight against these practices which for some companies are becoming a real management method.

"The DGCCRF is responsible for monitoring compliance with the rules of the French Commercial Code relating to payment periods. Article L. 441-16 of the French Commercial Code provides for the sanctioning of non-compliance with the legal rules on payment periods by an administrative fine of up to 75,000 euros for an individual and 2 million euros for a legal entity. This penalty is published."

All companies can be subject to a control of the DGCCRF. More than 3000 controls per year on average since the 2015 decree.

The Name and Shame: be careful with its use!

In 2016, Sapin 2 law, obliges CACs to indicate, in addition to the certification of accounts, whether certified companies respect the payment terms agreed with their suppliers and service providers.

The CAC report thus mentions the amount of invoices received and issued that had not been paid at the closing date.

These amounts should be reported in a form similar to the aged balances of third-party accounts in accounting.

Indicators to understand the structure of these delays as a percentage of the total amount of money at stakeand of the realized turnover or recorded purchases.

It has therefore become a legal obligation for the Statutory Auditors to transmit to the Ministry of Economy and Finance when they contact the legal payment deadlines regularly exceeded.

The practice of Name and Shame was introduced by the last Macron Law and the DGCCRF regularly publishes here :,This%20sanction%20is%20published%C3%A9e.

The name and the sanctions brought to the attention of the Companies regularly in default with regard to the payment terms.

This way of acting is based on practices that can be found on the other side of the Atlantic and is strictly reserved for the DGCCRF, which seems to us a guard-fool necessary and indispensable knowing that the temptation is great for some firm to denounce late payment behaviors of debtors, to publish them on the net and to leave an indelible digital footprint seriously damaging the durability of their activity.

The practice of Name and Shame should only be given to the DGCCRF and the emphasis should be on good behaviour rather than bad behavior The DGCCRF should focus more on good behavior than on bad payment behavior, which can be traced back to much more complex situations that are not always under the control of the debtors in question.

LegalCity will more easily promote good behavior by using another form of action and communication called Name and Fame!

What about mediation within companies? Where are we now?

Since 2016 a decree has set up the Business Mediator whose missions are similar to those previously assigned to previously assigned to the inter-company mediation and the mediation of public contracts.

It assists companies in the resolution of disputes relating to the application of contracts and works to facilitate exchanges between companies, whether they are public or private.

In the most complex cases or when its intervention must take too much time, it is strongly advised to the Companies, not only for problems payment problems, to introduce in their contractual relations or in their GTC, what is commonly called a a Mediation and Arbitration clause.

Indeed, the Law of Justice Programming obliges before any passage in first instance before the judge, the companies à attempt to resolve their disputes, litigation or conflicts by amicable means and through the intervention of a Mediator.

LegalCity SAS has created a brand new LEGALTECH platform called JustiCity(

Through this platform, companies can submit their mediation request online and will be directed to an independent and professional mediator.

Mediation will allow to find a solution to the dispute, litigation or conflict very quickly, much more than if a judicial approach had been initiated and at a cost defying all competition.

ADR (Alternative Dispute Resolution) can be used for several types of disputes and seems to have a bright future, given that Justicity allows for a completely online mediation, via video conference. At the end of a successful Mediation, the homologation of the agreement can be transmitted to a Judge who will check the form and will make by his decision the latter enforceable.

0 answers

Leave a comment

Join the discussion?
Feel free to contribute!

Leave a comment

Your email address will not be published. Required fields are marked with *.

This site uses Akismet to reduce spam. Learn more about how your comment data is used.