France's commercial code sets out ways for ensuring a healthy business.
Stabilising a business
Businesses in financial difficulty, but not insolvent, can receive help without initiating insolvency proceedings.
Two forms of amicable settlement are available to business owners: the ad hoc mandate and the conciliation procedure.
When a business is set up or taken over, the new owner must take certain steps to anticipate difficulties (e.g. market studies, scrutiny of commercial leases, risk prevention with insurers).
An active business can anticipate financial difficulties by calculating its break-even point, producing monthly progress reports, analysing annual accounts, and tracking its invoicing and collection methods.
Access to different sources of finance can help overcome financial difficulties.
When filing for bankruptcy is the only option left for a business owner, it pays to cut your losses, initiate proceedings sooner rather than later, and move on to a new project.
Defaulting on payment
Business owners in financial difficulties must notify the commercial court before defaulting on any payments.
Deferment of payment
To deal with financial difficulties, business owners can request a timescale from the social security authorities for settling their contributions along with facilities from the receiver for tax payments.
No business is immune to financial difficulties, so you should constantly anticipate, pinpoint and address any such problems.
You can also analyse the health of your business using the Banque de France rating system and rating methods.