France's SME Assistance Act promotes job creation and business development and transfers.
Types of takeover
The most widely used takeover methods are:
- lease management;
- takeover of assets;
- takeover by transferring stakes or shares.
Steps in the takeover process
Takeovers occur via either a private agreement (without notary involvement) or a deed of acquisition (in the presence of a notary).
A certified signature is required. This may be registered with the local chamber of commerce and industry, thus removing the need to systematically present proof of ID.
Retiring business owners need to plan the transfer of their business in advance.
Some standard requirements to be completed when taking over a business are the same as when setting up a new business.
The new owner must complete certain procedures to comply with the takeover process:
- sign the memorandum of understanding with the transferring party;
- obtain written notification from creditors confirming the allocation of loans;
- release funds;
- sign the final transfer deed.
Formalities when transferring a business:
- register the sales contract within 15 days with the tax authorities;
- publish details of the sale in a legal gazette;
- publication by the commercial court in the official bulletin of civil and commercial announcements (BODACC) within 15 days;
- register details of the new owner in the trade and company register (RCS) and remove details of the transferring party.
Certain formalities govern the purchase of shares in a limited liability company (SARL):
- obtain approval for the share transfer from associates representing at least half the firm's capital, or a larger majority if stipulated by the firm's articles of association;
- modify the articles of association in line with general borrowing arrangements (AGE) once the transfer deed has been signed;
- register the transfer deed and the new articles of association with the tax authorities;
- file two copies of the transfer deed and modified articles of association with the office of the commercial court.
France's national small-business exchange offers takeover opportunities for smaller companies.