Transfer of business to employees

Verified 05 June 2026 - Entreprendre Public Service / Directorate of Legal and Administrative Information (Prime Minister)

The redemption of the business can be offered to its employees. The assignment is subject to the completion of several formalities with a view to ensuring the protection of the transferor, the purchaser and the creditors company.

Step-by-step approach

The transfer of the business entails the transfer of all the elements that constitute the fund. Nevertheless, certain elements of the company are excluded from this transfer.

Assigned Items

The sale of the business involves the sale of the following:

  • Customers
  • Ensign and trade name
  • Right to lease : the right to take over from the holder of a commercial lease, to occupy the premises and to benefit from a right to renewal of the lease.
  • Employment, insurance and publishing contracts
  • Property rights literary, artistic and industrial (patents, software, trademarks, domain names)
  • Licenses or administrative authorizations : for regulated businesses, e.g. pharmacies or beverage outlets.
  • Furniture
  • Hardware and tooling : the assets necessary for the operation of the fund (machinery, computers, offices).

Please note

It is advisable to determine precisely which are the goods included in the transfer to avoid possible disputes. For example, the inventory of goods it is not included in the value of the goodwill, it is valued separately.

The transfer of a business may also include the transfer of digital elements of the fund, crucial for the continuity of the company:

  • Domain name and linked business email addresses
  • Website
  • Accommodation contract
  • Google my business (GMB)
  • Client File and audience analytics services (e.g. Google Analytics)
  • Accounts on social networks Facebook, Twitter, Instagram, LinkedIn
  • Account on a marketplace or a booking tool (ex: Amazon, Cdiscount, Booking, Tripadvisor...))

These digital elements allow the buyer toaccelerate its implementation local and on the internet. They can do that be valued when the business is transferred.

Please note

The transferor may call on a FranceNum activator (digital expert) to be accompanied during the sale of its digital assets.

Items excluded from disposal

On the other hand, the transfer of the business does not include the following:

  • Claims and debts : the obligations to repay loans and operating debts are not transferred, they remain the responsibility of the assignor.
  • Building : the premises in which the fund is operated.
  • Miscellaneous contracts : supplier contract, for example, with the exception of lease, labor and insurance contracts that are automatically transmitted.
  • Trade books and accounting documents : these documents are not transmitted, they must only remain at the disposal of the purchaser for 3 years.

Please note

The transferor may provide with the purchaser that the transfer of the business also includes the transfer of these other items, including debts and premises (if the transferor owns them).

Warning  

Thelaw no. 2026-403 of 26 may 2026 on the simplification of economic life changes the methods of informing employees from July 27, 2026.

From that date:

  • information for employees will only be mandatory in companies not equipped with an ESC
  • and the minimum notification period will be reduced to 1 month.

What information?

In the companies of less than 250 employees, the transferor must inform the employees of:

  • of its willingness to sell the company,
  • and the possibility for employees to submit an offer to purchase to acquire the company.

FYI  

From 250 employees, no information is required.

How to disseminate information?

Employees can be informed by any means such as to make the date of receipt certain:

  • 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 act of a commissioner of justice (formerly act of bailiff) or lawyer, etc.

When to disseminate information?

This information must be provided to employees at the latest 2 months before the date of conclusion of the contract of sale.

Any offer to purchase submitted by one or more employees must be communicated to the transferor without delay. On the other hand, that offer does not no priority compared to other offers.

The transferor is completely free to enter into negotiations with the employees or not. Refusal to study or accept an offer doesn't have to be motivated. The assignor has the right not to reply.

When each employee has made known his decision not to submit an offer, the sale of the company can take place before the expiration of 2 months.

What sanctions?

If the company is sold without the employees having been informed, they can apply to the judge for compensation for their damage.

In this case, the assignor may be ordered to pay damages and interest rising until 2% the amount of the sale.

Informed employees are also subject to a duty to discretion. Failure to comply with the obligation of discretion is a fault that justifies a disciplinary sanction up to the dismissal of the employee.

If employees do not have sufficient funds to acquire the business, they have the possibility to set up a business called takeover holding company. The holding company can take any legal form: SA, SAS, SARL, etc.

The holding company will be responsible for take out the loan necessary for the recovery of the fund. The maturity of the loan (or financing debt) will be settled through dividends distributed by the resumed business.

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
  • Sale price and payment terms
  • 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
  • Revenue 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.

Terms of registration

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.

You must submit the following to the check-in service, either on site or by mail:

  • Deed of sale of the business 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 fees (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

Who shall I contact

Payment of registration fee

The transfer of the business gives rise to the payment of a registration fee to the tax administration. This right is calculated on the sale price as follows:

  • 0% until €23,000
  • 3% enter €23,001 à €200,000
  • And 5% beyond €200,000

The amount of the registration fee may not be lower €25. If the disposal transaction includes sales of new goods, they shall be exempt from registration duty.

The cost of registration is in principle at the expense of the purchaser. However, the deed of assignment may provide that the payment of the fee is to be borne by the assignor or shared between the two parties.

Moreover, where the transfer is granted to an employee of the company, a abatement from €500,000 may apply to the value of the fund before the registration fee is calculated.

This device applies if the following conditions the following shall be met:

  • The company carries out a commercial, craft, industrial, agricultural or liberal activity (with the exception of the management of its own movable or immovable assets).
  • The transfer is granted to an employee of the company who has had an indefinite employment contract for at least 2 years and who has been working there full-time. The assignment may also be granted to the holder of an apprenticeship contract in progress on the day of the assignment.
  • The transferor must have held the transferred fund for more than 2 years.
  • The purchaser undertakes to pursue the professional activity and to ensure the effective directive of the company for at least 5 years from the takeover.

The deed of assignment must be published in a support for legal announcements in the department in which the fund is operated, in a 15 days following the signing of the sale.

If it is a deed of assignment under private signature, such publication shall be preceded by its registration with the tax office of the registration. THEauthentic act the transfer may, for its part, be the subject of that publication before its registration.

The advertisement must contain the following information:

  • Elements concerning the registration of the act (office, date, volume, number)
  • Date of deed of assignment
  • Names, forenames and domicile of the transferor and the purchaser
  • Nature and seat of the fund
  • Selling price and breakdown between tangible and intangible items
  • Deadline for possible opposition by creditors (10 days from publication in Bodacc).

Thereafter, the purchaser must request the registrar of the commercial court within 3 days following publication in a legal advertising medium. The Clerk shall then publish a notice within the Official Bulletin of Civil and Commercial Advertisements (Bodacc).

Who shall I contact

From advertising in Bodacc, creditors of the company have a period of10 days for object to the payment of the price of the business in the hands of the transferor. The creditors shall indicate, by registered letter with acknowledgement of receipt or by extrajudicial document sent to the domicile of the purchaser, the amount and causes of the claim.

During this period, the sale price is stated as: " unavailable », the purchaser shall not pay the price of the fund in the hands of the transferor before the expiry of the time limit.

Then, if there are objections, the unavailability of the price is prolonged. The sale price is then temporarily retained by a legal receiver (lawyer or notary of the purchaser).

The receiver is then required to make the amicable distribution of the price to the creditors in the 105 days which follow the date of the deed of sale.

FYI  

The opposing creditor, whose rights have not been respected, may summon the purchaser before the court to have the payment of the irregular price declared unenforceable and to obtain an order for payment of his claim.

Automatic receivership allows the tax authorities and creditors to claim any amounts of money that may not have been paid to them before the assignment.

The fees and expenses of the receiver shall be borne by the purchaser, unless the deed of sale provides for another distribution.

The transfer of the {circumflex over (a)} 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 payment of VAT.

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.

Company imposed in BIC

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.

Industrial and Commercial Profit Reporting (BIC)

Company imposed in BNC

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 (NCB) - Controlled Reporting Regime

Company imposed 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.

Profit Statement - Corporate Tax (IS)

Value added tax (VAT)

If the transferor is liable for VAT, he shall declare and pay VAT 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 VAT: time limit for 60 days from the publication of the assignment in a legal advertising medium.
  • If it falls under the normal real speed VAT: time limit for 30 days from the publication of the assignment in a legal advertising medium.

The regime real simplified VAT shall apply to a company from 1er January of a year N  where it complies with the turnover and VAT 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 VAT due

The amount of VAT due for the year N-1 must be less than €15,000

Consequences in the event of exceedance
  • If the normal turnover threshold corresponding to the activity carried out is exceeded, or the VAT threshold due (€15,000): the company switches to the normal real VAT regime 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 normal real VAT regime 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 (CA3) 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 VAT if the transfer concerns all the elements of the goodwill and the purchaser is himself liable for VAT. The exemption then covers all goods and services transferred on the occasion of the transfer of the fund.

Reporting arrangements

The declaration of result or VAT must be made in a dematerialized (sending paper forms is no longer possible):

  • Either by a manual online entry forms (EFI mode). The company completes them itself, by connecting:

On his professional space impots.gouv.fr:

Online tax account for professionals (EFI mode)

Or on his account Portailpro.gouv. :

Portailpro.gouv: common portal to simplify your declarations and payments

  • 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.

At the time of the assignment, the assignor may professional added value which is the difference between the sale price and the original value of the company.

The applicable tax system distinguishes between short-term capital gains and the long-term capital gains.

Presentation of capital gains

Capital gains are said to be " short-term ’ where they arise from the transfer:

  • elements of any kind acquired or created by the company since less than 2 years.
  • ordepreciable items detained since at least 2 years, for the portion corresponding to the depreciation deducted for the tax base.

Please note

The period of 2 years is calculated day by day, from the date of entry into the asset company.

On the contrary, capital gains are said to be " long-term’ where they arise from the transfer:

  • non-depreciable items held since at least 2 years
  • ordepreciable items detained since at least 2 years to the extent that the capital gains exceed the total amount of depreciation deducted for the tax base.
Tableau - Distinction between short-term and long-term capital gains

Holding period of the property

Non-depreciable items

Depreciable items

Less than 2 years

Short-term capital gain

Short-term capital gain

2 years or more

Long-term capital gain

Short-term capital gain within the limit of deducted depreciation (then long-term beyond)

Example :

A depreciable item was purchased €1,000 and resulted in depreciation in the amount of €300.

Its book value is therefore 1,000 – 300 = €700.

If this item is sold €1,200 :

  • Less than 2 years after its entry into the asset, the resulting capital gain (i.e. 1,200 – 700 = €500) is a capital gain short-term.
  • At least 2 years after its entry into the asset, the capital gain of €500 shall be considered as:
    • short-term until €300 (amount of depreciation previously deducted from taxable profits)
    • and long-term for the surplus, i.e. 500 – 300 = €200.

However, if the same item was sold €900, the capital gain on disposal (900 – 700) would be €200 and therefore less than the amount of depreciation (€300) previously deducted from profits. In that case, that capital gain would, in its entirety, be a capital gain short-term.

Taxation of capital gains

Short-term capital gain

The sum of short-term capital gains and losses realized during the year shall constitute the short-term net gain.

Short-term net gain is added to taxable income under the conditions and at income tax rate (progressive scale of 0% à 45%).

Capital gains are also taxed to the extent of 18.6% under the social levies on income from assets.

The {circumflex over (EI)} may spread the tax over 3 years in equal parts (over the year of realization and the following 2 years).

Long-term capital gain

Long-term net gain is subject to Single flat-rate levy (PFU) at the overall rate of 31.4% which is broken down as follows:

  • 12.8% income tax (IR)
  • 18.6% social levies on income from assets.

Please note

The company can charge the long-term capital losses that have been incurred in the previous 10 years on the net long-term capital gain realized in respect of a financial year.

In case of death of the operator, recognized capital gains shall be subject to tax regime for long-term capital gains. A general offset is made between the gains and losses recorded, without taking into account the length of detention of elements of fixed assets Thus, when the compensation shows a net gain in the long term, it is taxed at the overall rate of 31.4%.

One (EI) who opted for theassimilation to EURL falls under the scheme ofbusiness tax (IS).

Therefore, there is no more distinction between short-term and long-term capital gains. The capital gain is subject to the IS, at the normal rate of 25%.

The capital gain is tax-exempt, based on the sale price, as follows:

  • Exemption from totality capital gain, where the value of the items transferred (excluding immovable property) is less than €500,000.
  • Exemption partial capital gain, where the value of the items transferred (excluding immovable property) is between €500,000 and €1 000 000. The exemption rate is calculated as follows: (1 000 000 – Value of items transmitted) / 500 000.

In order to benefit from the exemption, the company must engage in a commercial, industrial, craft, liberal or agricultural activity, for at least 5 years.

FYI  

There are several tax exemption schemes on professional capital gains.

Exemption based on sale price

In order to benefit from the transfer price exemption, the transferred company must carry on an activity for at least 5 years.

The capital gain shall be exempt in one of the following ways:

  • Exemption from totality capital gain, where the value of the items transferred (excluding immovable property) is less than €500,000.
  • Exemption partial capital gain, where the value of the items transferred (excluding immovable property) is between €500,000 and €1 000 000. The exemption rate is calculated as follows: (1 000 000 – Value of items transmitted) / 500 000.

If transfer price is equal to or greater than €1 000 000, no tax exemption shall apply to capital gains.

Example :

One is transferred for a price of €1.3 MILLION. Among the elements transmitted is a building whose sale price is €620,000. After deducting this amount, the envisaged transmission is therefore equal to €680,000.

The capital gain realized on the sale amounts to €110,000.

The amount exempt from capital gain is equal to: 110 000 x (1 000 000 – 680 000) / 500 000 = €70,400.

The capital gain will therefore be taxed at a rate of 110,000 - 70,400 = €39,600.

Exemption in case of retirement

An exemption from capital gains applies in the event of retirement if all following conditions are filled in:

  • The professional activity was carried out for at least 5 years. The activity may be commercial, industrial, artisanal, liberal or agricultural in nature.
  • The transferred company is a SMES.
  • The transferor ceases any function in the transferred company, i.e. any management function as well as any salaried activity within the company.
  • The transferor asserts his pension rights either within 2 years of the transfer or within 2 years before the transfer.

Warning  

In the event of retirement, the capital gains exemption only covers income tax, social security contributions and 18.6% remain due.

Exemption for VSEs based on revenue

In order to benefit from the exemption, the operator must carry out an activity in a professional capacity, since at least 5 years.

The capital gain shall be exempt in one of the following ways:

  • Exemption from totality capital gain, where the annual revenue is less than or equal to €250,000 (purchase-resale or supply of housing) or €90,000 (provision of services or non-commercial benefits)
  • Exemption partial capital gain, based on receipts and the activity of the company:
    • Purchase-resale or supply of housing activity. Where the revenue exceeds €250,000 and less than €350,000, the exemption rate is calculated as follows: (350 000 - Revenue) / 100 000.
    • Provision of service or non-commercial benefits (NCB). Where the revenue exceeds €90,000 and less than €126,000, the exemption rate is calculated as follows: (126 000 - Revenue) / 36 000.

Beyond these thresholds, the added value is not exempt.

The amount of annual revenue is the average of the tax-free revenue realized for the financial years ended (reduced to 12 months where applicable) in the preceding 2 calendar years the closing date of the capital gains realization year.

Whether the operator or business was practicing several activities, the revenue realized in all activities shall be taken into account.

Example :

An operator who carries out an activity ofbuy-resell realized, in year N, a capital gain on the sale of €70,000. Its accounting year shall coincide with the calendar year and its revenue shall be:

  • Revenue N-2: €320,000
  • Revenue N-1: €240,000

The average revenue for 2020 and 2021 is equal to: (320 000 + 240 000) / 2 = €280,000.

The amount exempt from capital gain is equal to: 70 000 × (350 000 – 280 000 / 100 000) = €49,000.

The capital gain will therefore be taxed at a rate of 70,000 – 49,000 = €21,000.

FYI  

The exemption is not not cumulative with the transfer price exemption scheme (detailed below). On the other hand, it may be cumulative with the exemption of capital gains realized on retirement.

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