Sales Agent
Gouache Avocats, a firm involved in commercial agency matters, presents the legal regime of the commercial agent, and specifies the legal definition of the commercial agent.
The commercial agent is an agent responsible, permanently and independently, for negotiating and possibly concluding contracts for the sale, purchase, rental or provision of services, in the name and on behalf of other companies.
The commercial agent carries out his activity independently and must not be under the subordination of the principal (s). This is what distinguishes him from the VRP (traveller representing a worker) who is an employee representative. As such, the sales agent has all the freedom to organize his company:
- freedom to choose the legal structure of his company: sole proprietorship, EURL, SARL, SA, SAS or other;
- freedom to choose his activities: he may act for several constituents and simultaneously exercise other professions;
- freedom of choice of commercial processes and independence from its principal;
- freedom of management: recruitment, organization, transfer of his company.
Here you can watch a video on the status of the sales agent.
Registration in the register of commercial agents is no longer mandatory to benefit from the status of commercial agent, but remains in practice advisable.
The commercial agent contract is based on the mandate.
Therefore, the agent’s activity is civil. He is therefore subject to income tax (non-commercial profits), unless he has elected to incorporate a company subject to Corporate Tax to exercise. On the other hand, it is subject to the social regime for self-employed workers.
According to the law applicable to the commercial agent, the agency contract does not have to be in writing to be valid. On the other hand, the signing of a contract is advised to avoid any risk of reclassification as an employment contract and makes it possible to clearly define the rights and obligations of the parties.
Each party has the right to obtain from the other, at its request, a signed writing mentioning the content of the agency contract, at any time of the contract. It should be noted that in the absence of a written document, the principal may not impose a non-competition clause on the agent. However, it is liable for an obligation of loyalty which implies that it cannot indeed represent a company competing with that of one of its principals without the agreement of the latter.
The remuneration is freely fixed by the parties. In most cases, this is a commission on their sales. The rules are as follows:
- the agent is entitled to a commission when the transaction has been concluded thanks to his intervention;
- he may also be entitled, in certain cases, to the commission after the termination of his agency contract.
The commission is earned at the latest when the customer makes the payment, or would have made it, if the principal had respected its commitments. The idea is that the default of the principal should not delay the payment of the commission.
Thereafter, the commission shall be paid no later than the last day of the month following the quarter in which it is earned.
The contract may be fixed-term or indefinite.
When it ends:
a non-compete clause may be stipulated:
- it must be established in writing, limited to 2 years,
- the prohibition to be limited to the geographical area,
- customers or the type of goods that were the subject of the contract.
You can consult here a publication on the indemnities due to the sales agent following the termination of the contract.
Any termination of the contract gives rise to the right to compensation, including the expiry of a fixed-term contract and the death of the agent, except in the event of serious misconduct on the part of the agent, termination of the contract at the agent’s initiative or assignment by the agent to a third party with the agreement of the principal.
Finally, you can also discover a publication here on the serious fault of the commercial agent who abandons his activity in a significant way.
