Latest news on the PACTE law

The joint committee on the bill on the growth and transformation of companies (known as the Pact law), which met on February 20, 2019 for 1.5 hours, ended in failure. This one brought out major divergences between deputies and senators on the issues of changes in the workforce thresholds of the labor code, asset disposals (privatizations), as well as governance and corporate social responsibility.

Articles 1 and 2 of the bill that we are going to study, and at this stage already adopted, correspond to one of the ambitions of the text. According to the government, it is to "allow companies to grow and create more jobs, by removing all the obstacles that complicate their lives and by giving them the means to innovate in order to succeed". These articles belong to a chapter with the evocative title "Liberated companies".

One-stop shopping

Article 1 aims to facilitate the creation of businesses at a lower cost. Any creation, modification of a company or cessation of activities can be carried out by the filing of a single file, by electronic means, with a single body designated for this purpose. A decree in the Council of State will designate this organization and will define the conditions for filing the file.

This article will come into force on a date to be determined by decree of the Conseil d'Etat, but no later than January 1, 2023. It will define the transitional arrangements implemented as of the establishment of the organization, which will take place no later than January 1, 2021.

General Business Registry

Article 2 concerns the creation of a register of companies, officially for the purpose of simplifying the procedures of companies, reducing costs and processing times, particularly administrative, and improving access to information relating to the life of companies.

This general (and not unique) dematerialized register of companies will specify the nature of their activity and will have as its purpose the collection, conservation and dissemination of information concerning these companies. This register will replace existing business directories and registers, with the exception of the national register of businesses and their establishments kept by INSEE, the registers kept by the clerks of the commercial courts, as well as certain clerks of the courts of first instance ruling in commercial matters. The consular chambers will have permanent and free access to the information contained in this register.

This article also aims to simplify the reporting obligations of persons registered in the existing registers and directories and the modalities of control of the reported information.

This article authorizes the government to take the above-mentioned measures by ordinance, within twenty-four months of the publication of the law.

Next steps

The bill will therefore go back to the National Assembly for a study in a special committee at the beginning of March, and a new reading from March 13 to 15.

After a final shuttle with the Senate, and in case of persistent disagreement, if the government chooses this constitutional possibility (which seems most likely), it will ask the deputies to have the last word via a final reading.

Chronology

February 20, 2020: failure of the joint committee of 7 deputies and 7 senators
February 12, 2019: Senate passes first reading of bill (207 votes for, 117 against, 22 abstentions)
October 9, 2018: the National Assembly passes the bill on first reading (361 votes for, 84 against, 103 abstentions)
September 2018: start of the examination of the bill in Parliament
June 18, 2018: presentation of the PACTE bill to the Council of Ministers.