Succursalism

Branching

is a technique of commercial organization in which the head of the network and the different branches constitute a single enterprise.

The branch does not have a separate legal personality and does not have its own assets. The stock held by the branches belongs to the head of the network and the staff working in the branch is directly employed by the head of the network entity.

The Court of Justice of the European Communities, in a “Somafer” judgment of 22 November 1978 (RJDA 8-9/95 No. 1062), indicated that a branch implies “an operations centre which manifests itself in a lasting manner towards the outside as an extension of a parent company, provided with a management and materially equipped so as to be able to negotiate business with third parties, in such a way that the latter, while knowing that a possible legal link will be established with the parent company whose registered office is abroad, are exempted from contacting it directly and can conclude business at the operations centre which constitutes the extension”.