Sale of shares in a simplified joint stock business (SAS / SASU)

Verified 22 July 2026 - Entreprendre Service Public / (Prime Minister)

The sale of shares in SAS: titleContent / SASU: titleContent corresponds to the sale of shares held by a partner. It can intervene to allow a partner to leave the business, to pass on his activity or to reorganize the share capital. It also allows the entry of a new associate in the business.

To be valid, the transfer of shares must follow a number of steps.

Step-by-step approach

After preparing the transmission of the company and identifying the conditions of the transfer, the selling partner (the ceding) must check whether it is required to inform employees of the project.

The information of employees takes place in three stages: verify that the obligation to provide information applies, inform employees of the proposed sale and collect any offers to purchase.

1Check if the legal conditions are met

Before proceeding with an assignment of shares of SAS or SASU, theassociate seller must check whether the obligation to inform employees beforehand is applicable to him.

This obligation to provide information concerns transfers involving more than 50% from capital of the business.

As of July 27, 2026, employees must be informed directly of the proposed sale only in the following SAS:

  • SAS with fewer than 50 employees
  • SAS with 50 to less than 250 employees who do not have a Works council (CSE)

Please note

In SAS with 50 to less than 250 employees with CSE: titleContent, employees must no longer be informed directly of the transfer: this is the CSE to be informed and consulted on the proposed divestiture.

The employer shall provide the CSE with the information necessary for it to issue a reasoned opinion. Failing thiscollective agreement, the CSE shall have one month to deliver its opinion.

For more information on CSE information and consultation procedures, please refer to the fact sheet Works council (CSE).

THEobligation to inform employees does not apply where :

  • the transfer shall be for the benefit of the spouse, ascending or a descendant of the selling partner
  • the business is the subject of a conciliation, safeguard, accelerated safeguard, reorganization or judicial liquidation
  • the sale has already been the subject of information to employees under thesocial and solidarity economy (SSE) within 12 months prior to sale

2Inform employees of the proposed sale

The information addressed to employees must specify:

  • the willingness of the partner to sell more than 50% capital of the business
  • the possibility for one or more employees to submit a purchase offer for the acquisition of the shares of the business

As of July 27, 2026, the information must be delivered at the latest 1 month before the signing of the assignment, compared with 2 months for disposals concluded before that date.

The methods of informing employees vary depending on whether the ceding is or is not the manager of the business :

  • Where the transferor is not the business manager, it shall inform the latter of its proposed transfer. The business manager then informs the employees without delay.
  • Where the transferor is also the business manager, it shall inform employees directly.

The information can be transmitted by any means which makes it possible to give a certain date to its reception, in particular:

  • during a briefing : with signature of an attendance register
  • by display : with signature of a dated register
  • by email : by using a process that can attest the date of receipt with certainty
  • per discount by hand : with opening or receipt
  • by registered letter with request for acknowledgement of receipt
  • by act of a commissioner of justice (formerly act of bailiff) or lawyeretc.

3Receive employee purchase offers

Employees may make an offer to purchase the shares sold.

The associate remains free to accept or refuse an offer. The offers of the employees are not given priority over other takeover bids and the refusal does not have to be motivated.

Assignment may be carried out before the expiry of the information period where all employees have indicated that they do not wish to submit an offer.

The sale must take place in a maximum period of 2 years following the expiry of the information period. In addition, new information for employees is needed.

Please note

Informed employees are bound by an obligation of discretion. Failure to do so may result in disciplinary action, up to and including dismissal of the employee.

In the event of a breach of the obligation to provide information, employees may claim compensation for their loss.

As of July 27, 2026, the judge may grant damages and interest up to 0.5% the amount of the sale, against 2% before that date.

The share price is determined in 3 steps: their evaluation, the price fixing between the parties and, in the event of disagreement, the use of an expert.

1Evaluate actions

Before fixing the sale price, it is necessary to assess the value of the shares of the SAS. This assessment allows a price to be determined that is consistent with the economic and financial situation of the business.

Several methods can be used to enhance the company:

  • Heritage method : it consists in evaluating thenet book assets company.
  • Comparative method : it consists in comparing the business with other similar companies.
  • Profitability Method : estimating the future profit-making capacity of the business.

It is important to combine these 3 different approaches in order to obtain an estimate as close as possible to economic reality.

Please note

The value of the shares does not necessarily correspond to their nominal value. She depends on the actual value of the business at the time of disposal. For example, an action with a nominal value of €100 may have a higher or lower real value depending on the situation of the business.

For more information on recovery methods, please refer to the fact sheet on the valorization of the company before its transmission.

2Set the sale price

The ceding and the transferee freely determine the price of shares. The price must be determined or determinable at the time of transfer. The exact amount does not necessarily need to be fixed immediately.

The seller and the buyer can thus:

  • set a definitive price upon signature of the deed of assignment
  • provide for a calculation method allowing the price to be determined later
  • agree on a price supplement dependent on future items (revenue or profit guarantee clause)

The price may be different from estimated value actions where the parties freely consent.

Warning  

One manifestly fictitious or derisory price may result in the invalidity of the transfer or a reclassification as a gift disguised by the tax administration.

The same applies when the transfer occurs between related persons (partners, members of the same family, business controlled by one of the parties, etc.), the tax administration can check that the price retained corresponds to the real value of the shares.

The the price and payment terms must then be mentioned in the deed of assignment. In particular, the Parties may provide for:

  • a cash payment
  • a installment payment
  • payment guarantees to the transferor

The ceding and the transferee must agree on the price of shares. This price must be determined or determinable at the time of transfer.

In concrete terms, the exact amount does not necessarily need to be fixed immediately. The deed of assignment may provide for criteria or method of calculation to be used in determining it at a later stage (e.g. from the accounts of the business or from a formula agreed between the parties).

The price must be determined or determinable for all shares sold, and not only for some of them. Otherwise, the assignment may be called into question.

3Use an expert in case of disagreement

Where the parties cannot agree on the value of the shares, they may call on an expert specialized in the evaluation of actions, such as a public accountant, a lawyer or an auditor.

The assignor and the assignee may together appoint an appraiser. In the absence of agreement, the expert shall be appointed by the President of the competent court.

In this context, theexpert determines the value of the shares independently. It may select the valuation methods it considers most appropriate to the business' situation, taking into account in particular its financial situation, profitability and business prospects.

The the value it sets is imposed in principle on the parties.

Please note

To go further on the professionals who can support a company in these steps, refer to the sheet relating to professionals involved in the management of a company.

To learn more, the DGFIP: titleContent make available a guide on the evaluation of companies and business titles :

Evaluation of companies and business titles

French public finances general directorate (DGFiP)

Pour en savoir plus

In an SAS, shares are in principle freely transferable. However, the articles of association may make the transfer subject toprior agreement of the partners or provide for other clauses governing the transfer.

1Check whether an approval clause is provided for

The statutes of an SAS/SASU may include an approval clause.

The approval clause allows share disposals to be submitted to the agreement of the partners. Approval allows to control the entry of new associates in the business and to exclude those whose presence is, for whatever reason, deemed undesirable.

Where an approval clause is provided for in the statutes, the application for approval shall be notified to the business or to the President.

Violation of the approval clause renders the assignment void.

Please note

The approval clause may cover any type of transfer of shares: to the spouse, a descendant or ascendant, a partner or a third party.

2Implement the approval procedure

Where an approval clause is provided for in the statutes, the draft terms of sale must be notified to the business.

The notification shall indicate the name, surname and address of the purchaser, the number of shares concerned by the sale and the price offered.

The competent body designated by the statutes shall then decide on the application for authorization in accordance with the rules laid down in the statutes, in particular as regards the majority rules and the time limit within which the decision must be taken.

At the end of the procedure, two situations may arise: approval is granted or refused.

Approval shall be granted

Where approval is granted, the ceding may carry out the assignment under the conditions laid down.

The approval decision must be kept in order to be able to justify compliance with the procedure. In practice, it is generally observed in a minutes of general meeting or in any other document provided for in the articles of association.

Approval is refused

Where approval is refused, the consequences shall be those provided for in the statutes.

These may in particular provide that the shares will be acquired by one or more partners, by a third party designated or, with the agreement of ceding, by the business itself under the conditions laid down by law.

The repurchase price shall be fixed by mutual agreement between the parties. In the event of disagreement, the value of the shares shall be determined by an expert appointed in accordance with the applicable regulations.

3Check other statutory clauses

The articles of association may provide for other clauses governing the transfer of shares. Before making the transfer, it is therefore necessary to check whether the statutes contain any of the following clauses.

1) Pre-emption clause

The pre-emption clause (or « preference clause ») grants one or more partners a priority right to acquire shares the subject of the assignment.

In the presence of such a clause, the actions must be proposed as a priority to the beneficiary of the clause, in accordance with the rules laid down in the articles of association, before being able to be transferred to another purchaser.

Infringement of a pre-emption clause does not, in principle, render the assignment invalid. On the other hand, it may engage the liability of the assignor and give rise to the payment of damages and interest.

2) Inalienability clause

The inalienable clause prohibits the sale of shares for a fixed period, which may not exceed 10 years.

The statutes shall specify in particular the starting point and the duration of that prohibition. Upon expiry, the shares may be transferred, subject to compliance with any other applicable statutory provisions.

Please note

This clause may be adopted or amended only at theunanimity associates.

It may be expected that inalienability will impact only the shares of certain partners named in the articles of association (e.g. members considered to be vital to the sustainability of the business). It is also possible to limit inalienability to a certain proportion of the social rights of each partner, so that the share exceeding this proportion remains transferable.

The disposal of shares must be formalized by a document signed by the parties. Depending on the method chosen, this document may take different forms.

1Draw up the document recording the transfer

The document used to record the transfer depends on the terms chosen by the parties. The ceding and the transferee may formalize their agreement in a deed of assignment or using a declaration of transfer of social rights (the assignment is therefore not recognized by a deed).

The assignment is recorded by an act

The parties may draw up a deed of assignment to formalize their agreement and specify the terms of sale.

The deed of assignment allows in particular to keep a proof of the agreement between the transferor and the transferee.

It must include the mandatory particulars following:

  • Names of parties
  • Identity of the business (company name, share capital, address of the registered office, etc.)
  • Number and designation of shares transferred (if numbered)
  • Sale price of the assignment and terms of payment
  • Details of the approval of the partners, if any

The act shall be drawn up in as many copies as necessary so that each party can keep one. Each copy must be signed by the parties.

The assignment is not recognized by a deed

Where the parties do not draw up a deed of assignment, the assignment may be declared by means of a declaration of assignment of social rights, called form n°2759 :

Assignment of social or individual business rights not established by an act

To learn more about the declaration of transfer of social rights online, the DGFiP provides a FAQ :

FAQ on the declaration of transfer of social rights online (not recognized by a deed)

French public finances general directorate (DGFiP)

Pour en savoir plus

This declaration makes it possible to formalize the transfer with the tax administration and then to pay the registration fees due.

Please note

Drafting of a deed of assignment is not required to record a disposal of shares of SAS/SASU. However, it remains recommended to secure the terms of the assignment.

2Sign the transfer document

The signing of the transfer document shall constitute the agreement of the parties and makes the sale enforceable between the seller and the buyer.

The signature can be handwritten or electronic. In any case, it allowsauthenticate the agreement of the parties.

To be valid, the electronic signature shall:

  • Be uniquely attached to its signatory.
  • Have been created using electronic signature creation data that the signatory can, with a high level of trust, use under its exclusive control.
  • Be linked to the data associated with this signature in such a way that any subsequent modification of the data is detectable.

For learn more about the electronic signature :

Electronic signature

France Num

Pour en savoir plus

Warning  

The scanned signature and affixed to a document does not make it possible to identify the author with certainty. This signature is valid but can be challenged before the judges by one of the parties to the contract who would like, for example, to cancel the assignment.

3Provide for any guarantees, if necessary

Where the parties elect to draw up a deed of assignment, they can insert certain clauses intended to secure the operation and allocating risks between the assignor and the assignee.

This is the case of the asset and liability guarantee clause, which may be inserted in the deed of assignment.

It provides a framework for the risks linked to the financial situation of the business after the sale, and therefore covers both the ceding and the transferee.

Its objective is twofold:

  • The liability guarantee covers pre-disposal liabilities and risks (e.g. a tax adjustment for a financial year preceding the sale): the objective here is to protect the assignee against hidden debts.
  • The asset guarantee covers the value of asset itemsactive of the business (a receivable entered in the accounts of the business but ultimately unrecoverable): the objective is to protect the transferee against overvaluation of the business.

Guarantee of assets and liabilities may be provided in part or in full : it is possible to provide only a liability guarantee, only an asset guarantee, or both. Where both guarantees are provided for, the transferee is covered over the entire prior financial situation of the business.

FYI  

For the transferor, the provision of such a guarantee may facilitate the sale of sharesby strengthening the confidence of the purchaser and securing the agreement reached between the parties, in particular on the sale price.

In return, it may incur liability after the sale if previous debts or anomalies appear.

The asset and liability guarantee clause is freely defined by the parties in the deed of assignment or in a separate deed.

No mention required is not imposed, but as an indication, it may contain the following :

  • Categories of debt which fall within the scope of the guarantee. In the absence of any clarification, the guarantee covers all debts linked to the business' activity.
  • Departure Date of the guarantee: the date on which the origin of the debt can be assessed.
  • Duration of the guarantee clause: between 3 and 5 years, for example.
  • Calculation of any compensation due—Which can include a variable or declining percentage of support.
  • Floor amount of the guarantee: the amount from which the guarantee can be activated.
  • Ceiling amount compensation: the maximum amount to which the transferor commits itself. There is no obligation to pay beyond that.
  • Implementing arrangements : additional information necessary to apply the guarantee (justification for passivehow to send the claim, etc.).

There are alsoother types of guarantees which may be provided for in the deed of assignment, depending on the negotiation between the parties and the nature of the transaction:

  • Security net worth guarantee clause : sets a minimum value of the business at the date of the transfer.
  • Guarantee clause for turnover or results (earn-out or additional price): the sale price depends in part on the future performance of the business.
  • Non-compete guarantee clause : the transferor undertakes not to engage in a competing activity for a specified period of time and in a specified area.

The sale of shares of an SAS becomes enforceable against the business by its entry in the securities movement register and the updating individual accounts of associates.

1Record the transfer in the securities movement register

The business must note the completion of the assignment in its securities movement register.

This registration allows to materialize the transfer of ownership of shares between ceding and the transferee and allows the business to identify its new partner.

The register shall in particular mention:

  • the date of the transfer
  • the identity of the transferor and the transferee
  • the number of shares transferred
  • the nature of the transaction (disposal)
  • the references of the actions concerned

2Maintain individual accounts of associates

Following the recording of the movement of securities, the business shall proceed to the updating of individual shareholder accounts :

  • the shares transferred are withdrawn from the transferor's account
  • they shall be entered in the account of the transferee

The transferee is then recognized by the business as the holder of the acquired shares.

Please note

The assignment becomes enforceable against the business as from the recording of the transfer in the accounts of shareholders, recorded in the records of the business.

Once the assignment is completed, the parties must register it to the competent company Tax Office (SIE), and pay the registration fee.

1Report the transfer to the tax authorities

The disposal of SAS shares must be Registered with the company Tax Office (SIE) of the place of residence transferee or the ceding :

Who shall I contact

FYI  

In principle, registration fees areat the expense of transferee, i.e. the purchaser of the shares. However, the parties may agree on another allocation this burden, in particular by providing that the duties shall be borne by the ceding or distributed between them.

The documents to be transmitted differ depending on whether the assignment is or is not recognized by a deed of assignment :

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Where the transfer is recognized by a deed of transfer

Where the parties have signed a deed of assignment acknowledging the sale of the shares, the document must be presented for registration within one month of its signature.

The document shall be filed with the competent registration authority. It provides proof of the existence of the assignment and of the conditions agreed between the parties (identity of the assignor and the assignee, number of shares transferred, transfer price, etc.).

Where the assignment is not recognized by a deed of assignment

The parties are not not required to prepare a deed of sale to dispose of shares of SAS. Where the assignment is not evidenced by a written instrument, it must nevertheless be reported to the tax authorities in the month of the transfer.

If the assignment is not confirmed by a written document (oral agreement between partners, informal agreement not immediately drawn up, etc.), the declaration must be made either through the online service available on impots.gouv.fr in your personal area (section Approaches > Assignments of company law):

Espace professionnel impots.gouv.fr

The transfer can also be made using form n°2759, to be tabled in duplicate at the registration service on which one of the parties depends:

Assignment of social or individual business rights not established by an act

This declaration allows the tax authorities to record the transfer in the absence of a deed.

2Pay the registration fee

Registration fees are calculated by applying a percentage to the transfer price. This percentage varies according to the nature of the business whose shares are sold.

For disposals of shares of SAS or SASU, the registration fee shall be 0.1%, calculated on the sale price.

Example :

An SAS has 1000 shares. A partner sells 500 shares for a price of €100,000.

Registration fees are calculated on the sale price, i.e €100,000.

The amount of the registration fee is therefore:

€100,000 x 0.1% = €100.

The assignee will therefore have to pay €100 registration fees.

Warning  

The rate shall be increased to 5% where the transfer relates to shares of a business with preponderance in real estate.

The amount of registration fees cannot be less than €25.

Example :

An SAS has 1000 shares. A partner sells 500 shares for a price of €100.

Registration fees are calculated on the sale price, i.e €100.

The amount of the registration fee is therefore:

€100 x 0.1% = €10. This amount being less than €25, the transferee shall pay the legal minimum of €25.

Please note

The disposal benefits from a abatement from €500,000 on the value of the shares when carried out with one of the following :

  • Either one employee of the transferred company. He must be employed in CDI full-time for at least 2 years or have a apprenticeship contract in progress at the time of transfer.
  • Either one family member of the transferor (spouse or Civil partnership partner, ascendants or descendants, or siblings).

This allowance shall be applied when all following conditions the following shall be respected:

  • The company exercises a commercial, industrial, craft, agricultural or liberal activity, with the exception of the management of its own movable or immovable assets.
  • The transferor shall have held the securities for more than 2 years (if the transferor has acquired the shares for free, no holding period is required).
  • The buyer must continue the activity of the business whose shares have been sold as a single professional activity and in an effective and continuous manner, during the 5 years following the date of the sale.
  • The buyer must ensure effective leadership company during those 5 years.

The sale of shares in an SAS does not always entail a change in the articles of association.

The statutes must be modified where:

  • The article relating to the distribution of share capital mentions the identity of the members and/or the number of shares held by each : the clause then becomes inaccurate following the assignment and must be updated.
  • Another decision involving an amendment of the articles of association is taken at the time of the transfer (e.g. a change of corporate name, registered office or corporate object).

The statutes do not need to be modified where:

  • The article on the distribution of share capital does not mention the identity of the members or the number of shares held by each : the assignment then has no impact on the articles of association.
  • The only mention of the names of the partners is in other parts of the articles of association, such as the preamble or the signatures of the articles of incorporation. These terms do not need to be updated solely because of the transfer.

Whether the SAS statutes need to be changed following the transfer, the 3 next steps :

1Adopt the decision to amend the statutes

In order to proceed with the amendment of the articles of association, the decision must be taken by the members meeting at a general meeting or, in the case of single-person business, by the sole shareholder.

The meeting must first be convened by the president of the business.

Once the meeting is regularly convened, the decision to amend the statutes must be adopted according to the majority rules provided for by law or by the statutes.

The rules for adopting a decision vary depending on whether it is an SAS or an SASU:

SAS

In a SAS, the statutes shall determine the conditions for majority and, where applicable, the conditions for quorum collective decisions. The statutes may not provide that a decision may be taken by a number of votes less than simple majority.

Example :

A business has 20 shares distributed among 5 partners. In order for a decision to be adopted, the shareholders who took part in the vote must represent 11 shares of the business.

The statutes may provide for a higher majority (qualified majority, unanimity), but never less than a simple majority. This rule applies to all collective decisions, whether provided for by law or by the statutes.

Please note

For more information, see our factsheet on the decision-making in an SAS.

SASU

To change the statuses of a SASU, the decision shall be taken by the single member, who shall exercise all the powers normally conferred on the members of a multipersonal SASU.

The sole shareholder therefore takes the decision to amend the articles of association alone, without quorum or majority requirement.

The President, whether or not he is the sole shareholder, cannot decide on an amendment to the Articles of Association himself. However, it may take certain management decisions provided for by law, such as the transfer of the registered office to the same department or a neighboring department, but this decision becomes effective only after ratification by the sole shareholder. In the absence of validation by the latter, the statutory amendment cannot be carried out.

Once the decision is adopted, it must be recorded in writing in a unilateral decision-making document (also known as a unilateral decision of the sole shareholder), document in lieu of minutes of general meeting.

It is then necessary to update statuses replacing the old entries with the new ones.

Please note

For more information, see our factsheet on the decision-making in an SASU.

2Drafting the decision document

The act establishing the decision to amend the statutes differs depending on whether the east business multipersonal SAS or single-person SASU.

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SAS (multipersonal)

The decision to amend the statutes of an SAS shall be recorded in a minutes of general meeting. These minutes are then kept in the register of minutes of the business.

The content and the procedure for drawing up the minutes shall be determined by the statutes of the SAS. However, the latter must generally include the following information :

  • Date and place of meeting
  • Terms of convening
  • Agenda
  • Identity of the session chair
  • List of partners present or represented with the number of shares held by each
  • Documents and reports submitted to the Assembly
  • Summary of the discussions
  • Text of resolutions put to the vote (subjects on which decisions are to be taken)
  • Detailed results of votes
  • Mention of the articles of association concerned by the amendment and indication of their new wording

SASU (single-person)

The decision to amend the statutes of an SASU results from a unilateral decision of the sole shareholder.

This decision must be noted in writing, dated and signed by the sole partner. In particular, it must include the following :

  • Identity of the sole partner
  • Decision adopted
  • Mention of the articles of association concerned by the amendment and indication of their new wording

The decision must then be kept in the register of decisions of the sole shareholder.

3Update the statutes in accordance with the decision

Once the decision to amend the statutes has been adopted, the statuses must be updated to take account of the new distribution of shares among shareholders.

It is appropriate to amend the article of the articles of association relating to the allocation of shares in order to indicate the identity of the shareholders after the transfer and the number of shares held by each.

Please note

The transfer of shares does not change the amount of the share capital. Only the distribution of actions among associates is updated.

Once the changes have been made, the updated statuses must be dated and certified as true to the original by the legal representative of the business. The statutes must then be sent as part of the declaration formality to the companies' formalities desk.

At the end of the transfer, the business must complete the required formalities according to the changes made: publication of a notice in a medium authorized to receive legal notices when necessary, declaration on the company formalities window in the event of a change to be declared and update of the beneficial owners when the transfer involves a change in the latter.

1Publish a legal ad in a legal ad medium, if necessary

The sale of shares does not require the publication of a legal advertisement in a legal advertisement medium (Shal).

On the other hand, legal notice is required when the transaction is accompanied by an amendment to the articles of association subject to publication, such as a change of president, one change of corporate purpose or any other statutory amendment to be publicized. The notice is then published in a Shal: titleContent of the department of head office of the business.

Publication must be carried out within a period ofone month from the time the decision is taken.

The notice of publication shall contain the following items :

  • Reason or corporate name
  • Legal form
  • Share capital
  • Social object
  • Address of head office
  • Location and registration number at RCS: titleContent or at RNE: titleContent
  • Decision or minutes of the general meeting dated and signed
  • Description of the changes in the company's statutes subject to disclosure (e.g. change of chairman, change of corporate object or corporate name). The sale of shares, in itself, does not have to be mentioned in the legal announcement.

FYI  

Once the publication is completed, a certificate of publication the notice of amendment shall be issued. This is one of the documents to be sent to the companies' formalities desk in the amendment file.

2Declare the transfer at the formalities desk, if necessary

The transfer of securities does not in itself entail the filing of an amendment file at the company formalities desk, unless the articles of association, in particular the article on the distribution of shares, mention the identity of the members and/or the number of shares held.

Similarly, where it is accompanied by an amendment to be declared (for example, a change in the articles, a change in the officer or any other change subject to declaration), an amendment file must be deposited on the company formalities desk within one month.

Window of company formalities

Depending on the nature of the changes declared, the amendment file shall include following supporting documents :

  • Copy of the minutes of the meeting which decided to amend the statutes
  • Copy of the articles of association updated when they have been modified (for example, if the distribution of shares is included in the articles of association) dated and certified as true to the original by the legal representative
  • Certification of publication of the notice in a Legal Advertising Support (Shal), if necessary
  • Change declaration automatically generated on the company formalities window
  • Any other supporting documentation required in relation to the additional statutory amendment declared.

Warning  

In an SAS, the partners are not listed on the registration certificate (extract RNE: titleContent or extract Kbis). Consequently, a change of partners does not, in itself, result in the updating of the registration certificate.

However, a new extract may be issued if other changes are declared simultaneously, such as a change of leader or updating the address of the president, for example.

3Declare the beneficial owners

The transfer of shares generally involves a change in the actual beneficiaries of the business. In this case, a amending declaration of beneficial owners must be deposited at the companies' formalities desk.

This declaration is mandatory when a natural person acquires or loses control of the business, or when his holding percentage exceeds the threshold of 25% capital or voting rights.

That is the case if the holding percentage changes :

Example :

Before the transfer, Mr X holds 20% and Ms Y 80%. After the sale of shares, Mr X holds 30% and Ms Y 70%.

The beneficial ownership statement needs to be updated as Mr. X's percentage of ownership has evolved and it is becoming beneficial owner.

A declaration of beneficial ownership may also be required when the holding percentages remain the same, but the persons holding the shares change :

Example :

Before the transfer, Ms Y holds 70% of capital and Mr X 30%. Ms Y sells all her shares to Mr Z, who now holds 70%, while Mr X retains 30%.

The beneficial ownership statement needs to be updated to replace Ms. Y with Mr. Z, without changing the ownership percentages.

After completing the formalities related to the assignment, the assignor shall report the transaction to the tax authorities. Depending on the price at which the shares were purchased and resold, the sale may result in a gain or loss.

1Determine whether the disposal generated a gain or loss

To determine whether the disposal generated a gain or loss for the transferor, it is necessary to compare:

  • the sale price of the shares
  • their purchase price

3 situations may arise:

  • if the sale price is higher than the purchase price, the transferor realizes a gain (called added value)
  • if the sale price is lower than the purchase price, the transferor realizes a loss called (loss of value)
  • if the two amounts are identical, no capital gain or loss is recognized

Example :

A partner bought shares for €40,000. He sells them €60,000. It therefore realizes an added value of €20,000.

Conversely, if the partner purchased shares for €40,000 and resells them €30,000, it realizes a capital loss of €10,000.

2Report gain or loss

Once the amount of the gain or loss has been determined, the transferor must declare it. The tax consequences differ depending on whether it is a natural person or a legal person:

The transferor is a natural person
In case of gain

When a natural person makes a gain on the sale of shares, which is considered for tax purposes as a capital gain on securities.

Capital gain is, in principle, subject to single flat-rate levy of 31.4% including:

  • 12.8% in respect of income tax
  • 18.6% of social levies

The transferor may, however, opt for taxation in accordance with progressive scale income tax, if this option is more favorable to him.

In this case, the capital gain is included in the taxable income and subject to the rate corresponding to its tax bracket, between 0% and 45%. Social levies of 18.6% shall remain applicable.

Where the transferor opts for the progressive scale, he may, under certain conditions, benefit from capital gains allowances where the shares were acquired or subscribed for before 1er January 2018:

Common law abatement :

  • 50% for a period of detention of between 2 and 8 years
  • 65% for a detention period of more than 8 years

Reinforced abatement :

  • 50% between 1 and 4 years
  • 65% between 4 and 8 years
  • 85% beyond 8 years

The enhanced allowance shall apply in one of the following situations :

  • The shareholder disposes of the shares of a PME under 10 years of age on the date of subscription or acquisition of the shares : it is a company with fewer than 250 employees with a turnover of less than €50 million.
  • The partner sells the shares of a PME of which he is a director and retires : must have been a continuous manager and have held at least 25% the rights of the business during the 5 years preceding the transfer. He must cease all activity in the business and assert his pension rights within 2 years after the transfer.

Please note

A retired PME executive can also opt for a fixed abatement from €500,000. This applies to disposals made until 31 December 2031, irrespective of the way in which capital gains are taxed (flat rate or progressive scale). It cannot be combined with a proportional allowance under ordinary or reinforced law.

The added value must then be declared in the annual tax return for the year filed in the year following the year of the assignment.

In case of loss

In case of loss of value, no tax shall be payable in respect of such transfer. However, this loss can be used to reduce the amount of other similar gains in the same year, or in some cases in subsequent years.

The transferor is a legal person

When a legal person gains on the sale of shares, which are taxed according to the tax regime applicable to the business (tax on businesses or scheme ofincome tax, as appropriate).

The gain must be reported as part of its statement of profit or loss for the year in the course of which the transfer occurred.

In case of loss of value, no tax shall be payable in respect of such transfer. However, this loss may, in certain situations, be used to reduce the amount of taxable profits of the business.

Warning  

The obligation to declare the capital gain or loss resulting from the sale of shares shall be ceding, whether it is a natural person or a legal person. The business does not have to report the gain or loss realized by the partner on the occasion of the sale of its shares.

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