Withdrawal of Bill no. 1050 on non-trading companies for health professionals

By letter dated 2 July 2024, the Government informed the Parliament of its decision to withdraw Bill no. 1050 on the "société civile particulière de santé (SCPS)" for the regulated health professions and the veterinary profession, which was received by the National Council on 6 December 2021 (Source: Legimonaco, News, 19 July 2024).

Bill no. 1094 on the modernisation of company law envisages an updated definition of the company contract, in order to include the civil partnership of means ("société civile de moyens") for the benefit of the liberal professions (amendment of art. 1670 CCiv).

The Government points out that "the additional conditions for the formation of companies by healthcare professionals or veterinary surgeons are already provided for in specific legislation, such as Law no. 1.556 of 14 December 2023 on the practice of medicine and veterinary surgery and the bill on the practice of medicine, which will be tabled shortly".

Law no. 1.556 of 14 December 2023, supplemented by Ministerial Order no. 2024-30 of 24 January 2024, filled a legal vacuum by specifically organising and regulating the veterinary profession.

* * *

Broad outline of the previous planned system:

The purpose of Bill no. 1050 was"to offer professionals working in the field of human health or veterinary medicine a new opportunity to practise their profession within a more efficient structure in order to reduce the costs associated with practising their profession."[1]

This new form of company would have enabled "its partners to share resources such as premises, work equipment and administrative staff in order to achieve economies of scale". By contrast, the formation of a société civile particulière de santé would have "no effect on the professional situation of its partners, each of whom would retain his or her professional independence and patient or client base".[2]

♦ Applicable law:

Submission of the company to the provisions of the proposed law, and also, where not contrary thereto, to the provisions of the legislation relating to civil companies and those of the Civil Code relating to the company contract ("contrat de société").

♦ Partners' liability:

Each of the partners ("associés") would remain liable for the harmful consequences of their activities in accordance with the liability rules in force..

♦ Incorporation of a société civile particulière de santé:

Natural persons who may form the company: only those authorised by the competent administrative authority to practise a regulated health profession or the profession of veterinary surgeon, and provided that they do not practise exclusively within a health establishment or in an employed capacity or exclusively on an ad hoc or occasional basis.

Company Articles of Association ("statuts"): drawn up in writing with compulsory particulars on pain of nullity, a copy of which must be sent within a period of not more than one month from the date of signature, by the most diligent partner, to the Direction de l'action sanitaire and, where applicable, to each of the professional bodies to which the partners belong (formalities); company name immediately preceded or followed by the words ‘société civile particulière de santé’ or the initials ‘S.C.P.S.’ without being able to include any of the partners' names; rules relating to share capital and companies in formation.

♦ Functioning of the company:

The decision-making body of the société civile particulière de santé would be the General Meeting of members (made up of all the members).

The company would be administered by one or more managers. The bill sets out the rules governing their appointment, term of office, powers and dismissal. The manager(s) of the société civile particulière de santé would be accountable to the members for their management and would provide them with accounting documents in the form of a statement of income and expenditure.

♦ Partners:

Any stipulation in the articles of association aimed at obtaining a minimum return from a partner of the société civile particulière de santé or likely to affect the patient's freedom of choice would be deemed unwritten.

No partner may be an employee of the company.

The status of partner would have no effect on the freedom or obligation of the healthcare professional to be or not to be covered by an agreement.

Each partner of the société civile particulière de santé would bear the company's losses only up to the amount of their contributions.

The withdrawal of a partner could be voluntary (transfer of shares to a partner or a third party), or legal (revocation of authorisation to practise, death, incapacity, cessation of activity within the company for more than one year).

♦ Dissolution and transformation of the company:

Special provisions: unless otherwise stipulated in the Articles of Association, a société civile particulière de santé shall not be dissolved by the withdrawal, for whatever reason, or incapacity of a partner. However, the company would be dissolved ipso jure by the simultaneous death of all the partners, by the death of the last partner, by the simultaneous revocation of the authorisation to practise of all the partners or by the revocation of the authorisation to practise of the last partner.

Liquidation: the dissolution of the société civile particulière de santé would result in its liquidation (with the company's legal personality remaining for the purposes of the liquidation until the liquidation is completed). Except in the following cases: where the company is absorbed by another company or participates in the formation of a new company by means of a merger, provided that they are of the same form;; where the company transfers its assets and liabilities by means of a demerger to existing companies or to participate in the formation of new companies, provided that they are of the same form;; in the cases provided for in article 1703-I of the Civil Code (where all the shares are held by a single shareholder and the company has not regularised its situation within a period of one year, or where a judicial extension has been granted for a maximum period of one year, with automatic dissolution resulting in the transfer of all the company's assets and liabilities to the sole shareholder, without the need for liquidation).

Appointment of the liquidator: in accordance with the Articles of Association, or if the Articles of Association are silent, by the general meeting of shareholders ("assemblée générale des associés") or, if the general meeting is unable to make the appointment, by the Court of First Instance ("Tribunal de première instance") seised of the matter by the public prosecutor or any interested party. The case would be referred to the Court by application to the Chairman ("requête au Président"), and would be heard in chambers ("chambre du conseil") (paragraph 2 of article 850 of the Code of Civil Procedure applies).

The procedures for applying the law would be determined, as necessary, by ministerial order.

* * *

NOTES:

[1] Explanatory memorandum of Bill no. 1050, 2021-22, 25 Nowember 2021, p. 1.

[2] Ibid., p. 2.