Lawyers for business transfers

Lawyer for business transfers

Selling or acquiring a business involves considerable stakes: compliance of the deed, escrow of the price, opposition from creditors, transfer of employment contracts. Our firm is involved at every stage of the sale to ensure that the transaction is secure, from negotiations to the release of the escrow.

Selling your business

You want to sell your business, retire or change career direction. The sale of a business is not simply a matter of finding a buyer and signing a deed: it is subject to strict formalities, failure to comply with which could render the sale null and void.

The French Commercial Code stipulates that the deed of sale must contain compulsory information, that employees must be informed in advance if your business employs fewer than 250 people, and that the local authority's right of pre-emption must be waived. These are all practical pitfalls that we identify in advance.

Our firm handles

Legal valuation of the business and determination of the sale price
Audit of the commercial lease prior to sale: purpose, approval clause, rent, charges, remaining term, etc.
Drawing up the preliminary sales agreement and the final deed of sale, including all the legal details
Informing employees in accordance with Article L. 23-10-1 of the French Commercial Code
Waiver of commercial pre-emption rights with the local authority
Escrow of the sale price in a CARPA account and management of creditors' objections
Defending your interests in the event of a post-grant dispute or nullity action

Legal focus - Mandatory clauses in the deed of sale

Article L. 141-1 of the French Commercial Code requires the deed of sale of a business to mention the name of the previous vendor, the date and nature of the deed of purchase, the price paid, the status of the registrations encumbering the business, the turnover and operating results for the last three financial years, and the terms of the lease. If these details are omitted, the purchaser may bring an action for annulment of the sale if he can demonstrate that he has suffered a loss.

You are taking over a business

Buying a business is a major decision. You take over not only the customer base and the leasehold rights, but also the employment contracts of the employees attached to the business, in accordance with article L. 1224-1 of the French Labour Code. And for 90 days after the sale, you are jointly and severally liable for the seller's tax debts.

A prior legal audit avoids unpleasant surprises. We check the nature of the business, the conformity of the commercial lease, the existence of any pledges or registered liens, and the tax and social security situation of the seller.

What we do for the buyer

A full audit of the business: tangible assets, intangible assets, customer base, trade name, etc.
Analysing the commercial lease and negotiating with the lessor if necessary
The choice of acquisition structure: purchase in your own name, via a company (SAS, SARL), or transfer of company shares
Negotiating and drafting conditions precedent: obtaining financing, lease renewal, administrative authorisations, etc.
Checking the status of registrations and pledges on the business
Advice on registration fees and taxation of the transaction

Transfer price bracket	Rates of registration duty
Up to €23,000	Exemption
From €23,000 to €200,000	3 %
Over €200,000	5 %

Stages in the sale of a business

The sale of a business follows a precise timetable, governed by the French Commercial Code. Each stage involves legal deadlines that must be met. Our firm coordinates the entire process for both parties.

Chronology of the sale

Negotiation and assessment

Sales agreement

Common pre-emption (2 months)

Conditions precedent

Final deed + escrow

Publications (JAL, BODACC)

Release from receivership

Signing the preliminary sales agreement triggers a series of compulsory formalities. The declaration of intent to sell (DIA) must be sent to the local authority, which has two months in which to exercise its right of pre-emption. At the same time, the buyer looks for financing and the conditions precedent are lifted one by one.

Once the final deed of sale has been signed, the price is held in escrow in a CARPA account. The sale is published in a legal gazette and in the BODACC. The seller's creditors then have ten days to lodge an objection. The seller and buyer are jointly liable for tax for a period of 90 days, which can be reduced to 30 days if the seller is up to date with his tax reporting obligations.

Legal focus - Freedom to sell a business

Article L. 145-16 of the French Commercial Code states that any clause in a commercial lease prohibiting the tenant from selling his business is deemed to be unwritten. The lessor may not oppose the sale of the business. He may, however, impose conditions on the transfer of the right to a single lease, in particular the approval of the transferee. This distinction between the sale of a business and the sale of a leasehold right is a frequent source of dispute: the decisive criterion is the actual transfer of the customer base.

Frequently asked questions

How much does a lawyer cost to sell a business?

Fees depend on the complexity of the transaction: the amount of the sale price, the number of employees, the need to negotiate the commercial lease, the presence of pledges. As a general rule, the lawyer's fees are fixed as a percentage of the sale price (between 2 and 5 %) or as a flat fee. We always draw up an estimate prior to any intervention. Escrow fees (approximately 1 % of the price) and registration fees are also added.

Do I need a lawyer or a notary to sell a business?

A notary is not required for the sale of a business. The lawyer can draw up all the deeds (provisional sale agreement, final deed), carry out the publication formalities and ensure that the price is held in escrow in his CARPA account. The lawyer's advantage: his or her litigation expertise enables him or her to anticipate the risks of litigation and to draft protective clauses tailored to your situation.

Who pays the costs of the sale: the seller or the buyer?

It is customary for the buyer to pay the fees for drawing up the deed and the registration fees. The seller generally bears the escrow fees. However, this allocation can be freely negotiated between the parties and set out in the preliminary sales agreement. We recommend that you clarify this point at the start of the negotiations.

How long does it take to sell a business?

On average, you should allow three to five months between the signing of the compromis and the release of the escrow. The length of time depends mainly on how long it takes to obtain the necessary finance, how long the local authority's right of pre-emption has been waived (two months) and the tax solidarity period (90 days, which can be reduced to 30). Good preparation in advance can significantly reduce this timetable.

Are employees automatically transferred with the fund?

Yes, under Article L. 1224-1 of the French Labour Code, employment contracts are automatically transferred when a business is sold. The buyer is obliged to take over all employees, with their working conditions and seniority. In companies with fewer than 250 employees, the seller must also inform employees of the proposed sale at least two months before the sale, on pain of a civil fine of up to 2 % of the price.

Do you intervene in the event of a dispute after the sale?

Our firm is involved in both pre-sale and post-sale litigation. We handle nullity actions for omission of compulsory information, disputes relating to the re-characterisation of a transfer of leasehold rights as a transfer of a business, creditor objections to the price, and disputes relating to the transferor's non-competition clause. Our business law practice enforcement procedures enables us to take effective action to recover sums due.