Donation of individual business to employees
Verified 21 February 2026 - Entreprendre Service Public / (Prime Minister)
It is possible to pass on the company to its employees without asking for financial compensation. The donation is subject to the fulfillment of several formalities with a view to ensuring the protection of the donor, the donee and creditors company.
Step-by-step approach
The full donation of the company implies a Universal transmission of professional assets (TUPP), i.e. the transmission of all the assets, rights, obligations and securities necessary for the activity.
In other words, the head of company (the assignor) cedes theactive of the company (including components of the goodwill) and its passive (debts, collateral).
In concrete terms, the donor transmits the goodwill that includes the following elements:
- Customers
- Ensign and trade name
- Right to lease : right to take over from the holder of a commercial lease, to occupy the premises and to enjoy a right to renewal of the lease
- Furniture, hardware and tooling : vehicles, machinery, computers, offices
- Stock and goods
- Intellectual property rights : patents, software, trademarks, domain name
- Money : cash fund, any sum in cash kept at the place of exercise of the professional activity and the sums entered in the bank accounts dedicated to this activity
- Employment and insurance contracts
In addition, a universal transfer of professional assets involves the transfer of these other elements:
- Immovable property used for the activity (if owned): including the part of the principal residence used for professional use
- Receivables : amounts due from customers but not yet settled
- Collateral : pledge of the business, a pledge on stock, for example.
- Debts repayment of bank loans and operating debts (e.g. to a supplier). The assignment of a debt requires the written consent of the creditor. However, social contributions and contributions debts are not included in the transfer.
Please note
The universal transfer of professional assets (TUPP) is the default regime. Instead, the head of company can carry out a non-full transfer and divest items in isolation. For example, a transfer of the only business without the real estate and debts of the company.
The drafting of a deed of assignment is mandatory. It shall include the following:
- Intangible and tangible assets transferred : customers, sign, trade name, lease right, patent, equipment, tools, stock, etc.
- Identity of the parties : surname and forenames, date and place of birth, address of domicile
- Date and nature of the act : authentic act or private act
- Origin of the business transferred : identity of the predecessor, date on which the transferor acquired the company itself and at what price to record any capital gain
- and operating income : over the last 3 fiscal years preceding the disposal
- Statement of pledges against the fund : these are the pledges which have been granted to creditors the company over the 10 years preceding the date of sale. If the company is not subject to any pledge, the instrument must also mention it.
- Commercial Lease Terms : date and duration of conclusion of the lease, amount of rent, conditions for renewal, identity and address of the lessor
- Spouse's consent : if the transferor is married under the community regime
Since July 21, 2019, the disclosure of information on the origin of the company, the status of pledges and the results of the last 3 fiscal years is no longer mandatory. Nevertheless, the mention of all this information allows the deed of assignment to be concluded in full transparency between the parties.
Buildings or parts of buildings for tertiary use d'at least 1 000 m² must achieve targets for reducing energy consumption by 2030, 2040 and 2050.
In the event of a transfer, the assessment of compliance with this obligation must be annexed to the deed of assignment for information, on the basis of the latest annual digital attestation generated by OPERAT.
The deed of transfer must be filed with the tax office of registration without waiting if it is a deed under private signature or, in a delay of 1 month following the signature of the sale, if it is a authentic act.
The transferor must file with the registration service, on site or by post, the following:
- Deed of transfer of the company in 2 copies
- Business Transfer Declaration Form in 3 copies
- Form for reporting the condition of equipment and goods transferred in 3 copies
- Settlement of registration fee (in cash up to €300by check or bank transfer)
Declaration of transfer of goodwill or customers
Declaration of transfer of goodwill or customers: status of equipment and new goods transferred
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Warning
The universal transfer of professional assets is not valid if one of the parties has been the subject of a personal bankruptcy. This bankruptcy implies the prohibition of managing, directing, administering or controlling, directly or indirectly, any company or business.
When a donation is made, the tax authority collects a tax called donation right.
This right of donation is in principle to be paid by the beneficiary of the donation. However, the deed of assignment may provide that the payment of the tax is to be borne by the donor. In this case, the amount of the fee is not considered as a donation supplement.
To calculate this tax, the registration department proceeds as follows:
- It takes into account value of donation.
- He then deducts from this first value the amount of any abatements.
- He finally applies a tax schedule (a percentage) to the value found.
The amount of the allowance and the tax rate vary depending on the relationship between the donor and the recipient of the donation (the donee).
Example :
A head of company shall transmit to one of its employees his company of a value of €320,000, that's the value of the donation.
He and his employee do not share no relationship, which has 2 consequences:
- No abatement cannot be deducted.
- The scale of taxation shall be 60%.
Thus, the amount of the gift right amounts to 60% from €320,000, or €192,000 rights.
The Head of company may decide to give only the bare-property of its company and to preserve itsusufruct.
In this case, the tax authority collects a donation fee calculated only on the value of the bare property. This value changes as a function of the age of the head of company at the time of transmission of bare ownership.
In concrete terms, the younger the head of company is when he transfers the bare ownership of his company, the lower the value of the bare ownership (and the right of donation that results from it) will be.
AGE of the Head of company | VALUE of the usufruct | VALUE of bare ownership |
|---|---|---|
Less than: | ||
21 years of age | 90% | 10% |
31 years of age | 80% | 20% |
41 years of age | 70% | 30% |
51 years of age | 60% | 40% |
61 years of age | 50% | 50% |
71 years of age | 40% | 60% |
81 years of age | 30% | 70% |
91 years of age | 20% | 80% |
Over 91 years of age | 10% | 90% |
On the death of the donor, the usufruct ceases and the donee becomes full owner without having any additional entitlement to pay.
The use of donation with usufruct reserve therefore makes it possible to reduce very substantially the cost of a transmission.
Moreover, 3 specific discounts may be applicable in the case of a transfer of company to employees.
Dutreil Pact
The transmission of company is facilitated by the Dutreil device which entitles to a partial exemption the right of donation, up to 75% of the value of the company.
In other words, only a quarter (25%) of the value of the company will be taken into account to calculate the amount of the gift right.
A Dutreil Pact may be concluded when the 4 cumulative conditions the following are combined:
- The donor held the company for at least 2 years. No time limit shall be imposed if he has set up the transmitted company or if he has acquired it himself free of charge.
- Each beneficiary of the donation undertakes to keep the company and the assets allocated to it for 6 years.
- One of the beneficiaries must undertake to carry on the company's activity for 3 years from the time of transmission. This activity must be carried out on a regular and principal basis.
- The company's main activity is commercial, artisanal, industrial, agricultural or liberal, excluding any activity to manage its own movable or immovable assets (e.g. SCI).
Specific exemption for employees
In order to facilitate the transfer of very small companies to employees, a system of exemption from donation tax has been introduced.
This advantage takes the form of a abatement from €500,000 on the amount of the donation where all of the following conditions are met:
- The donor held the company for at least 2 years. No time limit shall be imposed if he has set up the transmitted company or if he has acquired it himself free of charge.
- Beneficiary employees are in apprenticeship or CDI for at least 2 years and work full-time within the company.
- Beneficiary employees undertake to ensure the management of the company during at least 5 years.
FYI
This exemption scheme reserved for employees is not not cumulative with the advantages of the Dutreil Pact.
Early transmission
If the donor is under 70 at the time of transmission, a reduction of 50% shall apply to the amount of the donation right. To benefit from this mechanism, the transfer must comply with the same conditions as those set out for the Dutreil Pact (nature of the activity, duration of ownership, continuation of the activity, etc.).
FYI
The device of the anticipated transmission is cumulative with the advantages of the Dutreil Pact or the employee allowance.
When transmitting his company, the head of company must comply with advertising formalities mandatory. These allow the transfer to be made enforceable against third parties.
Publication in Bodacc or in a legal advertising medium
The transferor has the choice between 2 means of publication :
- Either publication in Bodacc
- Either publication in a legal advertising medium
Publication in Bodacc
The transferor shall have a period of1 month from the transfer of his company to publish a notice to Official bulletin of civil and commercial announcements (Bodacc).
To publish his opinion, he must address (on site or by post) to registry of the commercial court on which depends the seat of his company. The Registry will transmit the opinion directly for publication on the dedicated website bodacc.fr.
The notice must include the following entries :
- Birth name, usage name, first names and, where applicable, business name of the transferor and the transferee (the purchaser)
- Professional activity and APE code
- Address of the principal establishment or, in the absence of such establishment, the address of the dwelling-place where the transferred company is fixed
- Siren Number
In addition, the notice must be accompanied by a descriptive statement of the professional assets transferred, i.e.:
- Overall value of theactive
- List of collateral of which the company benefits and the amounts of the claims secured by such collateral
- Total value of liabilities
- List of professional assets subject to a security right and, for each of the assets concerned, the nature of the security right and the amount of the secured claim.
The descriptive state is established by taking into account the last closed accounting year updated at the date of transfer, or, for individual contractors not subject to accounting obligations, at the date resulting from the agreement of the parties.
Publication in a legal advertising medium
The transferor shall have a period of1 month from the transfer of the company to publish a review in a support for legal announcements authorized in the department in which the professional activity is carried out.
Once the publication is completed, a certificate of publication the notice of amendment shall be issued.
Opposition by creditors
The creditors of the company have a period of1 month from the time of advertising for oppose the transfer of professional heritage.
Creditors shall indicate by registered letter with acknowledgement of receipt or by extrajudicial act transmitted to the purchaser's domicile, the amount and causes of the claim.
The judge examines the merits of the claim and orders, if necessary, the repayment of the debt. In this case, the assignor is committed to all its movable and immovable property present and future (with the exception of its principal residence).
By contrast, the opposition does not prevent the universal transfer of assets which takes place at the expiry of the opposition period.
The transfer of the individual business or its fund is analyzed as a cessation of activity. This must be declared, on the website of the company formalities window, within 45 days from the publication of the assignment in the medium of legal announcements.
From a tax point of view, this cessation carries theimmediate taxation of profits since the end of the last financial year and the TVA payment.
Declaration of result
In order to establish taxation, the assignor must realize a declaration of result. The approach to be taken differs under the income tax system to which the company is subject.
BIC company
The transferor must realize a declaration of result no. 2031 in the 60 days from the publication of the assignment in a support for legal announcements.
BNC company
The transferor must realize a declaration of result no. 2035 in the 60 days from the publication of the assignment in a support for legal announcements.
Non-Commercial Profit Reporting (BNC) - Controlled Reporting Regime
Company on IS
The transferor must realize a declaration of result no. 2065 in the 60 days from the publication of the assignment in a support for legal announcements.
(TVA)
If the transferor is liable to the TVA, it shall declare and pay the TVA on all transactions that have not yet been reported at the date of disposal.
He shall have the following time limit for making his declaration:
- If it falls under the simplified real regime from TVA: time to 60 days from the publication of the assignment in a legal advertising medium.
- If it falls under the normal real speed from TVA: time to 30 days from the publication of the assignment in a legal advertising medium.
The regime TVA real simplified shall apply to a company from 1er January of a year N where it complies with TVA’s turnover and amount thresholds:
Threshold for duty-free turnover
- Its turnover excluding taxes in N-1 must be between:
- €85,000 and €945,000 for business, catering and housing supply activities (except furnished rentals):
- €37,500 and €286,000 for other service provision activities (including furnished rentals):
- Its turnover excluding tax realized in N shall not exceed increased thresholds following:
- For business, catering and housing supply activities (except furnished rentals): €1 040 000
- For other service delivery activities (including furnished rentals): €323,000
FYI
These thresholds are valid for 2026 (year N).
Threshold on the amount of TVA due
The amount of TVA due for the year N-1 must be less than €15,000
Consequences in the event of exceedance
- If the normal turnover threshold for the activity carried out is exceeded, or the TVA threshold due (€15,000): the company switches to the TVA normal real speed from 1er January of the year following the year of the exceedance.
- If one of the thresholds is exceeded increased of turnover, the company shifts into the TVA normal real speed in a retroactive, that is to say that this regime will apply from 1er January of the year in which the overrun occurred. The company must then subscribe to a declaration (3) summarizing all transactions carried out over the entire month (or quarter). This declaration must be made the month following the month (or quarter) of the overrun.
Warning
However, this operation is exempt from TVA if the sale covers all the items of the business and the purchaser is itself liable to the TVA. The exemption then covers all goods and services transferred on the occasion of the transfer of the fund.
Reporting arrangements
The statement of outcome or TVA shall be made in a manner that dematerialized (sending paper forms is no longer possible):
- Either by a manual online entry form (EFI mode). The company completes it itself, connecting:
On his professional space impots.gouv.fr:
Online tax account for professionals (EFI mode)
Or on his account Portailpro.gouv. :
Business account portailpro.gouv
- Either by going through a software of special exchange (EDI mode). In this case, the company or more generally its representative (for example a public accountant) enters all the information required and then transmits it to the administration.
These two methods of remote reporting are further detailed on the page "How to submit business tax returns: EDI or EFI? »
Please note
The tax authorities grant an additional period of 15 calendar days to carry out this teleprocedure.
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Find who can answer your questions in your region
Transfer of the professional assets of the individual entrepreneur
Immediate taxation of profits
Payment of the donation fee
Value of bare-property
Dutreil Pact
Early transmission
Tax allowance reserved for employees
Elements included in the professional heritage of the individual entrepreneur