You are selling your business
You want to sell your commercial activity, retire or take a new direction. Under French law, the sale of a business as a going concern (cession de fonds de commerce) is not simply a matter of finding a buyer and signing a deed. The transaction is subject to strict formal requirements, and failure to comply may lead to the sale being declared void.
The French Commercial Code requires mandatory disclosures in the deed of sale, prior notification to employees in businesses with fewer than 250 staff, and compliance with the municipality’s right of pre-emption. These are practical pitfalls that we identify and address at the outset.
How we assist you
- Legal valuation of the business and determination of the sale price
- Audit of the commercial lease before sale: permitted use, landlord approval clause, rent, charges, remaining term
- Drafting the preliminary agreement (compromis de vente) and the final deed of sale with all mandatory disclosures
- Employee notification in accordance with Article L. 23-10-1 of the Commercial Code
- Compliance with the municipality’s right of pre-emption (droit de preemption commercial)
- Escrow of the sale price in the CARPA account and management of creditor oppositions
- Defence of your interests in the event of post-sale disputes or nullity proceedings
Legal focus – Mandatory disclosures in the deed of sale
Article L. 141-1 of the French Commercial Code requires that the deed of sale of a business disclose the name of the previous seller, the date and nature of the prior acquisition, the price paid, the state of charges and encumbrances registered against the business, turnover and trading results for the preceding three financial years, and the terms of the lease. Failure to include these particulars gives the buyer a right to seek annulment of the sale, provided they can demonstrate prejudice.
You are acquiring a business
Acquiring a French business as a going concern is a significant commitment. You take over not only the customer base and the leasehold right, but also the employment contracts of all employees attached to the business, by operation of Article L. 1224-1 of the French Labour Code. For a period of 90 days following completion, you are jointly and severally liable for the seller’s outstanding tax debts.
Thorough legal due diligence avoids unwelcome surprises. We verify the composition of the business, the compliance of the commercial lease, any registered charges or pledges (nantissements), and the seller’s tax and social security position.
Our services for the buyer
- Full audit of the business: tangible assets, intangible assets, customer base, trading name, trade name
- Analysis of the commercial lease and negotiation with the landlord where necessary
- Choice of acquisition structure: purchase by an individual, through a company (SAS, SARL), or share purchase
- Negotiation and drafting of conditions precedent: financing, lease renewal, administrative authorisations
- Verification of registered charges and pledges over the business
- Advice on registration duties and the tax implications of the transaction
| Price bracket | Registration duty rate |
|---|---|
| Up to EUR 23,000 | Exempt |
| EUR 23,000 to EUR 200,000 | 3% |
| Above EUR 200,000 | 5% |
The stages of a business sale in France
The sale of a French business follows a precise timetable governed by the Commercial Code. Each stage involves mandatory deadlines. Our firm coordinates the entire process for both parties.
Transaction timeline
Negotiation and valuation
Preliminary agreement
Municipal pre-emption (2 months)
Conditions precedent
Final deed + escrow
Publications (legal gazette, BODACC)
Release of escrow
Signing the preliminary agreement triggers a series of mandatory formalities. A notice of intention to sell (declaration d’intention d’aliener) must be sent to the municipality, which has two months to exercise its right of pre-emption. In parallel, the buyer arranges financing and the conditions precedent are satisfied one by one.
Following execution of the final deed, the sale price is held in escrow in a CARPA account. The sale is published in a legal gazette and in the BODACC (official bulletin of civil and commercial announcements). The seller’s creditors then have ten days to file an opposition. Joint and several liability for the seller’s tax debts runs for 90 days – reduced to 30 days where the seller is up to date with their tax filings.
Legal focus – Freedom to sell the business
Article L. 145-16 of the French Commercial Code provides that any clause in a commercial lease prohibiting the tenant from selling the business as a going concern is deemed unwritten. The landlord cannot prevent the sale of the business. They may, however, impose conditions on the assignment of the bare leasehold right (as distinct from the sale of the entire business), in particular a requirement for the landlord’s approval of the assignee. The distinction between a sale of a going concern and an assignment of leasehold rights is a frequent source of litigation: the decisive criterion is whether the customer base is effectively transferred.
Frequently asked questions
How much does a lawyer charge for a business sale in France?
Fees depend on the complexity of the transaction: sale price, number of employees, need to negotiate the lease, existence of registered charges. As a rule, lawyer’s fees are either a percentage of the sale price (between 2% and 5%) or a fixed fee. We always provide a fee estimate before commencing work. Escrow fees (approximately 1% of the price) and registration duties are payable in addition.
Do you need a lawyer or a notary to sell a business in France?
A notary’s involvement is not compulsory for the sale of a business as a going concern. A lawyer may draft all the necessary documents (preliminary agreement, final deed), handle the publication formalities and hold the sale price in escrow in their CARPA account. The advantage of instructing a lawyer lies in their litigation perspective, which enables them to anticipate disputes and draft protective clauses tailored to your situation.
Who pays the costs of the sale – buyer or seller?
By custom, the buyer bears the drafting fees and registration duties. The seller usually covers the escrow fees. This allocation can, however, be freely negotiated between the parties and set out in the preliminary agreement. We recommend clarifying this point at the outset of negotiations.
How long does a business sale take?
Allow on average three to five months from the preliminary agreement to the release of escrow. The duration depends primarily on the time needed to secure financing, the two-month municipal pre-emption period, and the 90-day period of joint tax liability (reducible to 30 days). Thorough preparation upstream significantly shortens this timetable.
Are employees automatically transferred with the business?
Yes. Article L. 1224-1 of the French Labour Code requires the automatic transfer of employment contracts upon the sale of a business. The buyer must take on all employees, with their existing terms of employment and length of service. In businesses with fewer than 250 employees, the seller must also notify the employees of the proposed sale at least two months before completion, failing which a civil penalty of up to 2% of the sale price may be imposed.
Do you handle post-sale disputes?
Our firm acts both upstream of the sale and in post-sale litigation. We handle nullity actions for failure to include mandatory disclosures, disputes over the reclassification of a lease assignment as a business sale, creditor oppositions to the sale price, and disputes relating to the seller’s non-compete covenant. Our enforcement law practice allows us to act efficiently to recover sums owed.