Every year, several thousand businesses are sold. The sale of a business is the transfer of all the elements that can be seized, such as furniture, equipment and seizable parts such as the brand name or clientele, etc. Everything related to your field of activity.
A cession de fonds de commerce (sale of business assets) is a way of selling off a company. Instead of selling shares, it involves selling off all the company’s assets. This action is strictly regulated by French law. There are certain operations specific to the sale of a business that must be complied with, or the transaction will be cancelled.
Steps to take before selling a business
Care must be taken if the business is located in a business protection zone. It is possible that the Mairie has a right of pre-emption to acquire the business. From a legal point of view, the town council has a right of pre-emption, a regulation linked to the transfer of a business, which will only apply in the event of the transfer of a company, even if the business will be entrusted to different hands. If this situation concerns you, you will need to send a previous declaration of transfer to the mayor. The mayor will then have 2 months to inform you whether or not you wish to become a buyer. It is advisable to be cautious before starting a possible sale with a buyer for your business, and to write a letter of intent. This letter gives you the advantage of defining the limits of your negotiations with the potential buyer. Once negotiations have begun, you’ll need to sign a confidentiality agreement, so as to preserve sensitive data and your expertise.What data must appear on the deed?
As in the case of a business donation, the deed of sale must include certain mandatory details. The following items must be included in the deed of sale, whether drafted or notarized:- The price of the property determined with the buyer for your fund.
- The former owner of the land, i.e. the first name and surname, and the date in the deed according to the owner who bought the land.
- Type of deed (authenticated deed or private deed)
- The purchase price of the business by the seller. If the seller has set up the business, this action must be stipulated in the deed of sale.
- Balance sheet of benefits and pledges: official document issued to all interested parties from the Registrar to the Commercial Court, providing information on rights and contracts concerning the business.
- Balance sheets for the last three years, showing sales.
- The parties to the commercial lease If you occupy commercial premises as a tenant, the deed of assignment must specify the duration of the lease and the date; the address and name of the assignor and lessor must also be noted. You must also notify the lessor of the assignment.
What to do after selling your business?
Once the sale of the business has been completed, 3 steps must be taken: the sale of the business in the case of a voluntary transfer. Moreover, these formalities are not considered to be transposable, particularly in the case of a pledge of a business or a collective procedure. What’s more, in addition to your standard obligations and formalities, you’ll probably have to carry out additional formalities with specific organizations or other people. If you have submitted a sign or trademark for your business, and you wish to sell it with the business, you will need to take steps with the INPI (Institut National de la Propriété Industrielle).Tax return
Within one month of the date of the sale of your business, you must register it, in particular by the buyer. You must declare it to the tax department responsible for the purchaser. If the value of the business exceeds 25,000 euros, registration fees will be payable.Reporting a business transfer to the CFE
Another formality is to declare the business sale to the Centre de Formalités des Entreprises. The buyer will then be able to make all the necessary administrative and legal declarations in the same place. The buyer also has the option of applying to the local commercial court (greffe) to register the business.Informing third parties
In order to inform all creditors of the sale, a deed must be legally published within 15 days of the date.- To be published in a JAL or legal gazette
- To be published in the BODACC (Bulletin Officiel des Annonces Civiles et Commerciales) by the Registrar of the Commercial Court.
