French movable security law – lawyer in Marseille

Movable security interests (suretes mobilieres) are the guarantees that attach to movable assets: stock, vehicles, business goodwill (fonds de commerce), company shares, receivables, and securities accounts. Article 2329 of the French Civil Code lists them: movable liens, pledge over tangible movables, lien over intangible movables (nantissement), and title retained or transferred as security. The 2021 reform (Ordinance No. 2021-1192 of 15 September 2021) substantially modernised the regime.

In practice, these security interests are ubiquitous in commercial life. A lender advancing funds to a business will take a lien over the fonds de commerce or a pledge over stock. A supplier protects its claim through a retention of title clause. An investor takes a lien over company shares. But the effectiveness of these security interests depends entirely on compliance with the formalities of constitution and registration. A poorly drafted pledge, an unregistered lien, and the security becomes unenforceable against third parties.

For common-law lawyers, the closest comparisons are the UK fixed charge (for pledges and liens over specific assets) and the floating charge (for charges over fluctuating classes of assets, such as stock). However, French law does not recognise the floating charge as such; the functional equivalent is the pledge without dispossession over fungible assets, which requires careful drafting to address replacement and substitution.

Overview of French movable security interests

A pledge (gage) attaches to tangible movable property (Article 2333, Civil Code). It may be possessory or non-possessory. The possessory pledge is the oldest form: the debtor delivers the asset to the creditor, who holds it until payment. The non-possessory pledge, more common in commercial practice, allows the debtor to retain use of the asset while granting the security. It requires a written instrument and registration on the movable security register.

A lien (nantissement) is the equivalent of a pledge for intangible assets (Article 2355, Civil Code): business goodwill, company shares, receivables, patents, and trade marks. The lien over a fonds de commerce (Articles L. 142-1 et seq., Commercial Code) is one of the most commonly used in French banking practice. It grants the creditor a right of priority over the sale proceeds but does not entitle the creditor to operate the business.

Retention of title (reserve de propriete) operates differently: the seller retains ownership of the goods until full payment of the price. This is a powerful tool in the debtor’s insolvency, as the seller may reclaim the goods from the debtor’s estate. The concept is well known in English law as a Romalpa clause.

Assignment of receivables as security (cession Dailly, Articles L. 313-23 et seq., Monetary and Financial Code) is widely used by banks to secure credit lines. The assignor transfers professional receivables to the credit institution, which becomes their owner as security.

Constitution and registration: pitfalls to avoid

The constitution of a movable security interest requires a written instrument on pain of nullity (Article 2336, Civil Code, for pledge; Article 2356, Civil Code, for lien). The instrument must contain mandatory particulars: identification of the secured debt, description of the charged assets, and maximum secured amount. Any omission may result in outright nullity of the security.

Registration is the second critical point. To be enforceable against third parties, a non-possessory pledge must be registered on the movable security register maintained by the Commercial Court registries. The registration has a limited duration – 5 years for a non-possessory pledge (Article R. 521-13, Commercial Code) – and must be renewed on penalty of loss of ranking and enforceability.

The interaction with insolvency proceedings is a minefield. Security interests created during the suspect period (between the date of insolvency and the opening judgment) are void as of right (Article L. 632-1, Commercial Code). A creditor who took a pledge or lien weeks before the debtor’s reorganisation or liquidation risks seeing its security annulled.

A non-possessory pledge over fungible assets (stock, raw materials) raises a particular problem: if the debtor disposes of the pledged assets without a replacement or real subrogation clause, the creditor loses its right of priority. The drafting of the instrument must anticipate this difficulty.

Enforcement and disputes

When the debtor defaults, the creditor has several avenues to realise its security. Judicial attribution allows the court to transfer ownership of the pledged asset to the creditor, up to the amount of the secured debt. A pacte commissoire – a clause in the constituting instrument – allows this transfer without court intervention, provided it was drafted with precision (Cass. com., 18 June 2025, No. 23-50.015). Forced sale at auction remains an option, particularly for assets of significant value.

Movable security litigation centres on three issues: the validity of the constitution (written instrument, mandatory particulars, consent), enforceability against third parties (registration, renewal), and creditor ranking in the event of competing security interests or insolvency proceedings (Cass. com., 14 June 2023, No. 21-15.864).

Recent case law illustrates the vigilance required. The Cour de cassation has held that the enforceability conditions for a non-possessory pledge over vehicle stock must be strictly observed (Cass. com., 1 April 2026, No. 22-23.641). It has also clarified the treatment of a lien over a fonds de commerce in judicial liquidation (Cass. com., 4 March 2026, No. 24-20.020).

Why instruct Solent Avocats for movable security matters?

Movable security interests sit at the intersection of guarantee law, commercial law, and insolvency proceedings. A lien over a fonds de commerce is not handled the same way when taken as part of routine bank lending as when the borrower is approaching insolvency. Our firm practises in all three areas, allowing us to address each case in its full context – from drafting the instrument through to enforcement litigation, including the complications that arise from insolvency proceedings.

Frequently asked questions

What are the main types of movable security under French law?

Four broad categories: pledge (over tangible assets), lien or nantissement (over intangible assets such as business goodwill or company shares), retention of title, and assignment of receivables as security. Each has its own rules of constitution, registration, and enforcement.

What happens if a non-possessory pledge is not registered?

An unregistered non-possessory pledge is unenforceable against third parties. In the debtor’s insolvency, the creditor loses its right of priority and ranks as an unsecured creditor. Registration is therefore essential for the security to serve any practical purpose.

How long does a pledge registration last?

Registration of a non-possessory pledge lasts 5 years and must be renewed before it expires. Failure to renew results in loss of ranking and enforceability. This is a common trap for creditors who do not monitor their registration deadlines.

Does a lien over a fonds de commerce survive judicial liquidation?

The lien confers a right of priority over the sale proceeds of the business. In judicial liquidation, the secured creditor is paid in priority over unsecured creditors, within the limits of its ranking. But if the business is not sold or loses its value, the security may prove insufficient.

What should I bring to a first consultation?

The constituting instrument (pledge agreement, lien agreement, Dailly bordereau), proof of registration where applicable, the underlying loan or credit agreement, and any documents relating to existing litigation or insolvency proceedings. An estimated valuation of the charged assets is also useful.