Transfer and Acquisition of Business Assets under French Law
Discover the legal service for the transfer and acquisition of business assets offered by Whitefield, our Paris-based firm. We support you at every stage of your project, from negotiation to the signing of the final deed, guaranteeing legal expertise to secure your transactions under French law. Thanks to our know-how, we help you maximize opportunities while minimizing legal and tax risks, whether you are a buyer or a seller.
What is a Business Asset (Fonds de Commerce) under French Commercial Law?
A Business Asset (Fonds de Commerce) is a set of tangible and intangible elements that a merchant exploits to carry out their activity and attract customers. It represents an economic unit distinct from the merchant's personal assets under French jurisdiction.
Intangible elements include: clientele and goodwill, trade name and signage, lease rights, certain licenses and authorizations, and some contracts such as those with suppliers or employees, which may be transferred during the sale.
Tangible elements include: equipment and machinery, merchandise.
Generally excluded: real estate, debts and receivables, and contracts intuitu personae (e.g. franchise contracts).
What is a Transfer and Acquisition of Business Assets under French Commercial Law?
The transfer of business assets refers to the sale of the set of tangible and intangible elements necessary for the operation of a commercial activity under French law. Unlike the transfer of a company, the business asset remains an independent entity, and the purchaser only takes over the commercial activity without acquiring the underlying company.
What is the Difference Between the Transfer of Business Assets and the Transfer of a Company under French Law?
The transfer and acquisition of business assets and the transfer of a company are two clearly distinct types of transactions under French commercial law.
- Transfer of business assets: sale of activity-related elements (clientele, equipment, etc.), no change of company ownership.
- Transfer of company: sale of shares or equity interests, including assets, liabilities, and obligations.
What Elements Are Included in the Transfer of Business Assets under French Commercial Law?
- Tangible elements: furniture, equipment, tools
- Intangible elements: clientele, signage, trade name, lease rights
- Operational contracts: employment, insurance, publishing agreements
- IP rights: patents, trademarks, copyrights
- Digital assets: domain name, website, business email, social media, marketplaces
What Elements Are Excluded from the Transfer of Business Assets under French Law?
- Merchandise stocks (valued and transferred separately)
- Debts and receivables (unless agreed otherwise)
- Commercial premises (owned by landlord)
- Certain contracts (e.g. supplier agreements)
- Accounting books (remain with seller, must be made available for 3 years)
Main Steps of a Transfer or Acquisition of Business Assets under French Law
1. Legal Analysis of the Project
- Review of the commercial lease
- Examination of employment contracts
- Verification of contracts (e.g. franchise)
- Review of intangible and tangible assets
- Analysis of financial statements
- Terrace rights (public space authorization)
2. Drafting the Promise of Sale
This document outlines the transaction terms and may be:
- Unilateral (with option to buy/sell)
- Bilateral (mutual commitments under conditions)
Key clauses: suspensive conditions, employee information, right of first refusal by municipality, earnest money (indemnité d'immobilisation).
3. Drafting the Final Sale Agreement
- Includes mandatory information under French Commercial Code: identity of parties, price and terms, description of elements transferred.
4. Post-Sale Formalities
- Filing with tax authorities (registration duties)
- Publication in Journal d'Annonces Légales (JAL)
- Filing with the Commercial Court and BODACC publication
- Escrow of the sale price until completion of formalities and creditor clearance
Sectors Covered by Whitefield
Pharmacies
Subject to strict regulation. Requires ARS approval, Order of Pharmacists compliance, and franchise agreement review (if applicable).
Radiology Practices
Subject to ARS rules, medical equipment standards, and non-transferable patient bases. Requires careful contractual review.
Hotels
Includes transfer of business name, leases, booking platforms, and regulatory compliance (leases may be long-term or emphyteutic).
Restaurants
Requires verification of licenses (e.g. “licence IV”), leases, equipment, and terrace permits from the city hall.
Driving Schools
Specifics include instructor licenses, teaching contracts, vehicle leasing contracts, and compliance with administrative regulations.
Retail Stores
Focus on commercial leases, supplier contracts, customer base, trademarks, and hygiene standards.
Hair Salons & Beauty Institutes
Includes clientele, equipment, staff qualifications, and hygiene/insurance compliance.
How Long Does It Take to Transfer a Business Asset?
Generally 2 to 4 months. Escrow period for the sale price typically lasts 3 to 5 months (creditor opposition). Includes legal audits, employee notifications, and municipal preemption.
Required Documents to Sell a Business Asset
- Accounting for last 3 years
- Commercial lease contract
- Inventory and employee contracts
- Commercial contracts and authorizations (e.g. terrace permits)
- Franchise agreements and DIP (where applicable)
How Is the Sale Price Determined?
- Turnover and net profitability
- Customer stability and location
- Lease value and equipment
- Comparative or profitability valuation methods
Fees and Costs Involved
- Registration duties (payable by buyer)
- Lawyer, accountant, notary fees
- Escrow management fees
- Publication fees (JAL + BODACC)
Why Choose Whitefield for Your Business Asset Sale or Acquisition?
Our firm offers complete legal support to secure your business asset transactions. We provide personalized assistance across various sectors including hospitality, healthcare, education, and retail. Our deep knowledge of French law helps you reduce risks, ensure compliance, and achieve successful outcomes.
Contact Whitefield for Legal Support in Business Asset Transfers