Three categories of sanctions may be imposed:
- Financial penalties
In the event of mismanagement that has contributed to the shortfall in assets, the court may order the de jure or de facto manager of the legal entity to pay all or part of the amount of the shortfall in assets.
- Commercial sanctions
These include personal bankruptcy and a ban on managing a business. The Court may prohibit offending directors and managers from managing a business for a period of up to 15 years.
Punishable offences are listed in articles L.653-1 et seq. of the French Commercial Code.
For example, a manager may be accused of failing to keep any accounts or of keeping irregular accounts, of deliberately failing to cooperate with the bodies involved in the proceedings, of failing to provide a list of the company’s creditors, etc.
- Criminal penalties
The main criminal offence is bankruptcy, which is punishable by 5 years’ imprisonment and a fine of €75,000.00, plus additional penalties.
Punishable acts consist mainly of misappropriating company assets, fraudulently increasing liabilities, keeping fictitious accounts or making the accounts disappear.
