Commercial Incapacity: Can a Convicted Person Resume a Business After Their Sentence?

Imagine for a moment: you are in Péronne, running a small grocery shop for twenty years. One day, you are convicted of a criminal offence, and the court imposes a ban on engaging in any commercial or industrial profession. Your life collapses. But what happens if, after serving your sentence, you wish to reopen a business? Can you ask the judge to lift this ban? And if you had already ceased your business at the time of conviction, do you still have this right?

The Court of Cassation answered these questions in a judgment of 19 November 1970 (No. 69-92.600). It held that Article 5 of the Law of 30 August 1947 allows any person subject to a professional ban—whether they are still a trader or have already ceased their business—to apply to be relieved of this incapacity. A decision that can change everything for hundreds of convicts.

In this article, I explain the facts of the case, the judges' reasoning, and what this means concretely for you as a landlord, tenant, or real estate professional. Because yes, this decision also affects commercial leases, sale contracts, and guarantees.

The Facts: A Story Like Many Others

The case began in Doullens. Mr. Alain, a trader, was criminally convicted of an offence that automatically entails a ban on engaging in a commercial or industrial profession. This ban is provided for by Article 1 of the Law of 30 August 1947, which targets certain offences (fraud, breach of trust, etc.). The court set the duration of this incapacity at five years.

Mr. Alain, who had already ceased his commercial activity before his conviction, decided to apply to be relieved of this ban. He brought the matter before the Rennes Court of Appeal, which declared his application inadmissible. According to the Rennes judges, only a trader still in business at the date of conviction could seek a relief. Since Mr. Alain had already ceased his business, he was no longer a trader within the meaning of the law.

Mr. Alain appealed to the Court of Cassation. He argued that Article 5 of the Law of 30 August 1947 does not distinguish based on whether the convicted person was a trader at the time of conviction. He also invoked the principle of personal punishment: the ban affects him personally, regardless of his past professional status.

The Court of Cassation ruled in his favour. It quashed the Court of Appeal's judgment and referred the case to another court. For the judges of the High Court, Article 5 allows any person covered by Article 1—whether they are a trader at the date of conviction or have ceased to be one—to apply for a relief from the incapacity. The law does not limit this right to traders still in business.

The Reasoning of the Court — Analysed

To understand this decision, one must first grasp the mechanism of the professional ban. Article 1 of the Law of 30 August 1947 lists the convictions that automatically result in incapacity to engage in a commercial or industrial profession. This is a supplementary penalty added to the main penalty (fine, imprisonment). Article 5, on the other hand, provides a safety valve: the convicted person may apply to the court that imposed the sentence to be relieved of this incapacity, either by removing it outright or by reducing its duration.

The question was: is the application for relief open to all convicts covered by Article 1, or only to those who were still traders at the time of their conviction? The Rennes Court of Appeal had chosen the latter interpretation, considering that Article 5 was intended to allow the trader to continue their business, not to restore a lost status. But the Court of Cassation rejected this restrictive reading.

The supreme judges held that the text made no distinction. Article 5 refers to "persons covered by Article 1", meaning all convicts who have suffered one of the penalties listed. It does not matter whether they are traders at the time of conviction. The key point is that they are subject to the ban. Moreover, ceasing business may result from the conviction itself: the convict may have sold their business to meet debts or out of despair. To deny them the right to apply for relief would be to add a penalty to the penalty.

This decision is part of a broader trend towards humanising ancillary criminal penalties. The Court of Cassation has previously held that the professional ban should not be a disguised perpetual penalty. Here, it confirms that relief is a right, not a favour granted to some.

What This Means for You — Concretely

This decision has important practical implications, particularly for landlord owners, trader tenants, and real estate professionals.

If you are a convicted trader: You can apply to be relieved of the ban on engaging in business, even if you have already ceased your activity. For example, a baker in Péronne convicted of fraud who closed their shop can ask the court to reopen a new business. The application must be made to the court that imposed the sentence (criminal court or court of appeal). There is no statutory time limit, but it is better to act quickly after the end of the main sentence.

If you are the owner of commercial premises: You lease to a trader who has been convicted and is subject to a ban. The lease may be threatened if the tenant can no longer carry on business. But if the tenant obtains relief, the lease can continue. Conversely, if the tenant does not apply for relief, the lease may be terminated for breach of the obligation to operate. A concrete example: in Doullens, a landlord saw his tenant, a garage mechanic convicted of breach of trust, cease his activity. The landlord had to start proceedings to terminate the lease, but the tenant eventually obtained relief and resumed his business. The landlord avoided an empty premises.

If you are a buyer of a business: Check that the seller is not subject to a professional ban. If so, the sale could be voided for lack of capacity of the seller. A prudent buyer will ask for a certificate of non-prohibition or an extract from the criminal record.

Four Tips to Avoid This Type of Dispute

• Check the criminal record of your counterparty: Before signing a commercial lease or buying a business, ask for an extract from the criminal record (bulletin no. 2) to ensure the seller or tenant is not subject to a professional ban. This will save you years of litigation.
• Include a condition precedent in the contract: In a lease or sale promise, provide that the final conclusion is conditional on the absence of a professional ban affecting the trader. If the ban is discovered, the contract will be cancelled without cost.
• Act quickly if your tenant is convicted: As soon as you learn of your tenant's conviction, contact them to find out if they intend to apply for relief. If they do not, you may consider terminating the lease for failure to operate. Consult a lawyer to assess the risks.
• For the convicted trader: prepare your application for relief: Gather evidence of good conduct (no reoffending, compensation of victims, etc.). The application must be reasoned and show that you are now reliable. A specialised lawyer can help you build a solid case.

Further Reading: Related Case Law and Developments

This 1970 decision is part of a line of cases that have gradually relaxed the regime of professional bans. Earlier, the Court of Cassation had held, in a judgment of 12 June 1962, that the ban could only be imposed if expressly provided for by law and that it must be proportionate to the seriousness of the facts. More recently, the Law of 17 June 2020 strengthened the rights of convicted persons by allowing periodic review of professional bans.

The trend is therefore towards individualisation of sentences. Judges no longer want the professional ban to become a perpetual penalty preventing any reintegration. Thus, even if you ceased your activity long ago, you can apply to be relieved of the incapacity. Courts are generally favourable to serious applications, provided the convicted person demonstrates rehabilitation.

For the future, we can expect judges to continue to interpret the texts broadly, so as not to hinder the freedom of commerce and industry. However, caution: relief is not automatic. The court has full discretion over each situation. It may refuse if the convicted person has not compensated their victims or has reoffended.

What You Must Absolutely Remember

FAQ:

1. Can I apply for relief if I had already ceased my business before my conviction?
Yes, the Court of Cassation confirmed this: Article 5 does not distinguish based on whether you were a trader at the time of conviction.

2. What is the time limit to apply for relief?
There is no statutory time limit, but it is advisable to do so as soon as the main sentence ends. The longer you wait, the less chance you have of convincing the judge of your reintegration.

3. What should I do if my tenant is subject to a ban?
Contact them to find out if they intend to apply for relief. If not, you can start proceedings to terminate the lease for breach of the obligation to operate.

4. What is the difference between the ban on engaging in business and personal bankruptcy?
The ban on engaging in business is a criminal penalty, while personal bankruptcy is a civil sanction that may also prohibit managing a company. The two may be combined.

5. How much does a relief procedure cost?
Lawyer's fees vary depending on complexity. Expect between €1,500 and €3,000 for a first instance. But a preliminary 30-minute consultation (€45 with Maître Zakine) can guide you.

Are you in a similar situation? A first 30-minute consultation with Maître Zakine (€45) may save you months of proceedings — and often much more. Book an appointment →