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Business owners - choosing a matrimonial property regime

  • What is the purpose of a matrimonial property regime?

    • The couple and their assets are subject to a set of legal rules known as the "matrimonial property regime".

    • This regime determines the rights and obligations of each of the spouses with respect to their assets and liabilities.

    • French law offers couples solutions for all situations, taking account of the family, their assets, and the ages of those concerned.

    • There are three major types of matrimonial property regime:
      - the séparation de biens regime under which all the assets are held separately;
      - the statutory regime or community [mentioned above];
      - the participation aux acquêts regime [which is a hybrid of the other two, in that property is held separately during the marriage , but deemed to have been a communauté de biens réduite aux acquêts on the dissolution of the marriage]. Each of these property regimes may be tailored to suit the couple by the addition of specific clauses.

    • More informations about matrimonial regime

  • If the couple do not choose a regime, which matrimonial property regime applies?

    • At the present time, if there is no marriage contract, the future couple is automatically subject to the joint ownership of assets limited to those assets - the communauté de biens réduite aux acquêts - (which is the default regime for marriages celebrated since 1 February 1966).

    • Under this regime, everything that the spouses acquire after the marriage belongs to them jointly, except for items received by inheritance , or gift .

    • Regarding third parties, both spouses commit not only their own assets, but also the jointly owned assets.

  • What is the best marriage contract for a business owner?

    • There are no good or bad matrimonial property regimes, however, there could be a regime that is particularly suitable or unsuitable for the couple's needs and wishes.

    • For a business owner (whether a trader, artisan, farmer, professional, sole trader or manufacturer, etc.), choosing the right matrimonial property regime is particularly important, given the risks involved in the professional life of a person running their own business.

    • In every case, the business owner should be aware of the consequences of their activity on the interests of the family.
      - Is it desirable to expose the family to proceedings that might be commenced by the business's creditors
      - Conversely, would it be advantageous to use the family assets in order to inspire confidence in one's partners, suppliers, or the bank?

  • Will the business owner need their spouse in order to take certain decisions?

    • Yes, in certain matrimonial property regimes, the spouse's agreement is necessary for transactions such as buying items on credit, borrowing, guarantees, selling assets, or leasing. The business owner may wish to preserve their freedom of action if they think that this is necessary for the smooth running of the business; they must therefore be able to decide quickly, i.e. without consulting anyone else.

    • Conversely, in other situations, the couple will want both of them to be involved in certain decisions, so that the opportunities and risks taken by the business are shared. All these situations, and many others such as divorce, survival on death or transfers, must be envisaged in the light of each individual's personal situation, and discussed in detail with the notaire.

  • Is it possible to change one's matrimonial property regime?

    • Yes, the law allows couples to change their regime after two years of marriage. 
      But for the government, this two-year period, imposed by article 1397 of the Civil Code, remains binding on business owners (creators and buyers) who wish to change their matrimonial regime more quickly, especially when they are married under the regime Legal status of the community reduced to acquests (a regime not adapted to their situation). It is for this reason that it intends to abolish it during the first half of 2017, in particular for spouses considering undertaking an entrepreneurial project.

    • If the couple has no minor child, the procedure is relatively simple, and can be effected with only the assistance of a notaire.

    • Conversely, or if an adult child or creditor opposes the change of matrimonial regime, judicial authorisation is required.
      The procedure, which is onerous and takes several months, involves going before the family judge.
      Furthermore, the change can be difficult to obtain if the business is in difficulties, for example.